Promoting sustainable and inclusive rice value chain in Indonesia

Promoting sustainable and inclusive rice value chain in Indonesia

Empowering Javanese small-holder rice farmers to earn better income through sustainable rice production.

Supporting farmers to adopt sustainable rice production

In Indonesia, a meal without rice is not really a meal. Rice is a key ingredient of breakfast, lunch, dinner and snacks. No wonder the average Indonesian consumes about 114 kilograms of rice per year. The average Asian eats about 93 kilograms of rice a year; the average West-African 80 kilograms; the average Latin-American 37; and the average North-European only 4.

Rice does not only hold a central place in the Indonesian kitchen and culture. It is also a crucial part of the country’s economy. Indonesia is the third-largest rice producing country, right after China and India. Up to 90% of Indonesia’s rice is produced by small-scale farmers. Rikolto's rice programme in Indonesia has been operating for more than 25 years, in a bid to promote sustainable rice production and help improve farmers' income. In the midst of growing concerns over the environmental impact of rice production, Rikolto ensures that rice production benefits both famers economically and the environment.

Promoting Sustainable Rice Platform (SRP) Standard

Rice programme in Indonesia is part of the Rikolto's Rice Cluster working to push for sustainable rice sector transformation. In its rice programmes Rikolto wants to contribute to sustainable rice sector transformation at national, regional and global level, in order to:

  1. Generate decent profits and jobs for all actors along the value chain, especially for smallholder farmers (men, women and youth)

  2. Reduce the environmental impact of rice cultivation and to preserve the environment for future generations

  3. Provide safe, healthy, sustainable and quality rice to consumers

To pursue this ambition, Rikolto has become a member of the Sustainable Rice Platform (SRP) and actively promotes the SRP instruments to make rice cultivation more sustainable.

The Standard aims at the adoption of climate-smart sustainable practices with 46 criteria grouped under 8 themes. Practices deal with farm management, pre-planting, water use, nutrient management, pest management, post-harvest, health and safety and labour rights. The SRP Standard is a performance standard and not a pass-fail standard. By using a scoring system, it allows for stepwise compliance to encourage and reward progress in improving agricultural practices.

The SRP Standard allows the following two claims: “Sustainably cultivated rice” if a farmer scores at least 90 and meets all essential performance levels and “Working toward sustainable rice cultivation” if a farmer scores lower and does not meet the essential performance level of one or more requirements.

The SRP Performance Indicators enable monitoring of progress and impact in terms of reduction in water use, input use efficiency, food safety, reduction in greenhouse gas emissions, biodiversity, increased productivity and income.

In 2018, Rikolto in Indonesia conducted SRP baseline and SRP pilot surveys. For the pilot, we surveyed 560 farmers in Boyolali (Central Java) and Tasikmalaya (West Java).

Working with farmers' organisations

At the moment, Rikolto Indonesia is working with three associations of small-scale rice farmers: APOB and KOPAPPOLI in Central Java’s Boyolali district and Mentari Sinari Alam in West Java’s Tasikmalaya district. With the support of Rikolto in Indonesia, the cooperatives have been guiding their members to produce high-quality healthy and organic rice in a sustainable manner have achieved the necessary certificates to sell their rice on national and international markets. Important challenges remain to be tackled, however, to make sure that every rice farmer can earn a living wage from premium quality healthy or organic rice production.

Challenges

  • To have their premium quality rice certified as “healthy” or organic, the associations must have an Internal Control System (ICS) in place which guarantees that all rice is produced according to the desired standards. Currently, not all farmer groups belonging to these cooperatives are using ICS – in the case of APOB, for instance, only 11 out of 26 farmer groups do so. Making sure that every farmer produces according to the same standard is challenging and time-consuming, but crucial. The associations can only collectively sell the rice that is certified healthy or organic. The farmers that are not yet able to adhere to the ICS, have to sell their rice independently, at lower prices.

Mr. Murbowo, Head of APOB: “My dream is that all our members produce certified healthy or organic rice, so that APOB will be able to collectively sell all our members’ rice and can make sure that they all receive a fair price.”

  • Farmers have a hard time to find good-quality local seeds and organic fertilisers.
  • Climate change phenomena like El Niño negatively affect the amount of rice produced and its quality. Droughts have in the past years led to a lack of water and reduced production, and unexpected heavy rainfall affects the rice’s quality.
  • All three organisations do their own processing, but specific capacities and techniques are required to select, clean and process premium quality rice.
  • The farmer organisations still have work to do to manage their businesses sustainably: women and youth engagement is limited; their bookkeeping, marketing, and negotiating skills leave much to be desired; and they do not have the necessary skills yet to negotiate fair contracts with buyers or to access financial services.
  • Indonesian national rice policies are not adapted to the new reality in which consumers are willing to pay more for healthy or organic premium quality rice. Currently, BULOG, the Indonesian National Logistical Supply Organisation decides on the producer and market price for rice. This price is set very low, and the government does not distinguish between low quality and premium quality rice. Farmers that produce premium quality rice depend on the goodwill of buyers to receive an above market-rate income. For this to change, the Indonesian government would have to set different prices for different types of rice. The ASEAN Economic Community’s guidelines already underline the need for such a multi-quality based rice pricing system.

Our strategies

  • Rikolto facilitates trainings on Internal Control Systems to the farmer organisations’ boards and organises capacity building for members of the organisations.
  • We support the rice farmer organisations in local rice seed breeding according to market requirements and in the production of organic fertilisers. These local seeds and organic fertilisers are sold at discount prices to members, and at market-rate prices to other rice farmers.
  • Rikolto further introduces the System of Rice Intensification (SRI) model to the organisations and their farmer members, to deal with continued droughts. SRI is an organic system which implies giving rice plants more space to grow, which reduces water usage by 50% and produces drastic increases in rice production.
  • Rikolto facilitates trainings on bookkeeping of stocks, milling, processing and warehousing for premium-quality rice.
  • We enable rice farmer organisations to manage their businesses professionally and sustainably. This means, amongst other things:
  1. Supporting them to create more space for engagement of women and youth, through internal policies promoting their participation and through popular events such as summer camps for the district’s youngsters;
  2. Providing training on (online) marketing of their rice, business and organisational management, network and decision making;
  3. Organising capacity building activities on access to finance and supporting the development of business plans to meet the requirements of financial service providers;
  4. Facilitating dialogues and linkages between the rice producer organisations and buyers, both nationally and internationally, to develop business opportunities that benefit small-scale farmers.

Central Java Premium Rice Consortium meets the Central Java Governor

13/08/2019 09:36

The Dutch Government-funded, FDOV - Central Java Premium Rice Consortium met the Central Java Governor Ganjar Pranowo at the gubernatorial residence Puri Gedeh in Semarang, on Monday (12/8), where ICCO, Rikolto, and Yayasan Jawa Tengah Berdikari as consortium members presented project achievements and sustainability.

The Consortium consists of ICCO Cooperation (lead), Rikolto Indonesia, Yayasan Jawa Tengah Berdikari, Central Java Food Security Council, PT. SMB, PT. UNS, and the Bank of Central Java.

Through the FDOV - Central Java Premium Rice Project, the consortium works to encourage public-partnerships in a bid to improve the production and marketing of premium rice in 15 districts in Central Java. Main activities in the project include:

  • Training farmers with Good Agricultural Practices - Agricultural Growth Promoting Inoculant (GAP – AGPI)

  • Developing demonstration plots

  • Post-harvest training and assistance

  • Helping joint farmers groups (Gapoktan) to have strong business organisations

  • Strengthening the position of women farmers in the rice value chain

The project runs from 2016 to 2019. The achievements so far:

  1. 9, 278 farmers have implemented GAP – AGPI

  2. 58 joint farmer groups have premium rice business plans

  3. 13 cooperatives are formed

  4. Increase in farmers’ income by 30%

Helping farmers

On the meeting, the Central Java Governor appreciated the Central Java Premium Rice Consortium project for helping farmers produce premium rice and form three cooperatives in Magelang, Grobogan, and Solo Raya. To follow up the meeting, the Governor has asked his staff to work with the Consortium as to study and discuss how the achievements can be used for policy formulation.

Future direction that the Consortium wants to see and achieve is:

  • Involvement of private sector to ensure market for premium rice farmers

  • Mobile application utilisation to support marketing strategies

  • Scaling-up and replication of the current project

  • Young people-driven modern farming

  • Collaborating with BUMDes (Village-owned Enterprise) to develop an agro-tourism model

Beneficiaries

In 2018, at least, 3,213 farmers from these three cooperatives have received benefits due to our support:

  • 1,913 farmers of APOB/Organic Farmers Association of Boyolali (1,751 male farmers and 162 female farmers
  • 927 farmers of KOPAPPOLI/Marketing Cooperative of Boyolali Organic Rice Farmers Alliance (854 male farmers and 73 female farmers)
  • 373 famers of Mentari Sinari Alam Cooperative (279 male farmers and 94 female farmers)
  • The number of rice farmers in each association increased significantly. As long as farmers are not certified healthy or organic and do not use ICS, their rice is not collectively marketed by the associations. But even if farmers still have to market their own rice, being a member brings them the advantage of having access to trainings.
  • After a period of significant income increase, the average income (in Indonesian Rupiah, per hectare) decreased in Boyolali and Tasikmalaya due to the effects of climate change: most rice farmers could not plant in the last planting season 2015 (harvested in early 2016) because of the long drought, which led to a decrease in productivity.
  • APOB has successfully implemented internal control systems in 11 of its 26 farmer groups. In 2016, they obtained their first domestic organic rice certificate, now selling organic rice to the buyer HealthyChoice in Jakarta and to markets in nearby Solo and Yogyakarta.
  • Any “left-over” rice is being processed into rice powder for baby food and sold to local markets.
  • APOB and Mentari Sinari Alam have held regular youth camps in 2015 and 2016; each association now employs some of these young trainees as agro-technical assistants.
  • APOB, KOPAPPOLI and Mentari Sinari Alam’s business and bookkeeping capacities have significantly improved.
  • The result of SRP pilot in 2018 showed that farmers already " work towards sustainable rice cultivation", scoring 70-90 points (essential stage).

Expected results in the short term?

  • APOB, KOPAPPOLI and Mentari Sinari Alam successfully guide their members to use internal control systems (ICS) and implement SRI.
  • More young farmers are involved in the daily practices of the farmer organisations and become staff and governing members.
  • The three farmer organisations obtain credit from financial institutions to support their business.
  • APOB, KOPAPPOLI and Mentari Sinari Alam have an integrated business of seeds and organic fertilisers to support the needs of farmer members and non-members of their organisations.
  • The organisations supply the rice market with premium rice that meet the requirements of the buyers, resulting in long term business contracts with these buyers.
  • Farmer organisations sell their organic/healthy rice directly to consumers with their own brand.
  • The government consistently implements a multi-quality pricing policy for rice, distinguishing between low, medium, and premium qualities of rice.
  • The City Governments of Solo and Bandung stipulate policies that favour sustainable production and consumption.

What do we expect in the long term?

Our long-term goal is to support a new generation of farmers with the capacities to feed consumers in urban areas with healthy food, while earning a living income without damaging the environment.

Nana Suhartana
Nana Suhartana
Rice Sector Manager
+62811 3859 944