Inclusion of Small Producers in the Value Chain in Indonesia: From Field Evidence to Action

The market changes faster than people's mindsets. This is particularly true in the agriculture sector, where many farmers still see themselves as commodity producers and not businessmen. There is a growing need for them to collaborate with different actors to link into the financial services and modern markets.

The issue was discussed at the "Inclusion of Small Producers in the Value Chain: From Field Evidence to Action", a workshop jointly organized by Belgium-based Vredeseilanden (VECO), United Kingdom-based International Institute for the Environment and Development (IIED), and Netherlands-based Cordaid.

Held between Nov. 12 and 14 2008, the workshop was attended by 30 participants from Indonesian NGOs and focused on sustainable agriculture issues. You can download the report here...

farmers must change their mind-set

"Farmers face economic pressures like cheap imported commodities, land rights' uncertainty and capital requirements," VECO's Chris Claes said. Ideally, he pointed out, farmers should be able to create food security, contribute to poverty reduction, manage migration and urbanization, and generate export revenues. This could become a reality if the small-holder farming sector was resilient.

Such conditions can only be achieved if the farmers are able to access the necessary resources: good quality seeds, financial services and profitable markets, he said.

In order to do so, farmers must change their mind-set from one of food security to one of market access. The farmers could access the market through structural adjustment programs and privatization of public services, he added.

NGOs are one stakeholder that could assist farmers in accessing markets. "The basic concept starts from understanding farming as not just a social organization, but as a business," Cordaid's Harma Hardemaker said.

indonesian food industry has transformed rapidly

Ronnie S. Natawidjaja, from Padjadjaran University's Center for Agricultural Policy and Agribusiness (CAPAS) in Indonesia, added that, globally, the food industry had undergone a very rapid transformation.

"We can see this from four things: the spreading of supermarkets, large-scale processors, fast-food chains and a new-generation of wholesalers which specialize in and are dedicated to modern food industry segments," he said. "There is a big opportunity for small producers to fill the markets' demand," Ronnie said, adding that, currently, only 15% of the country's farmers had access to the supply chain of modern markets.

Anton Muhajir, The Jakarta Post, 14 November 2008