Empowering smallholders for organic nutmeg Indonesia

In North Moluccas over 50% of the population is involved in nutmeg production. The high demand on the international market gives an opportunity for farmers to improve their livelihoods, if they meet the market requirements. However, the quality of nutmeg in the region has been deteriorating over the years. This program aims to capacitate 5,000 nutmeg farmers from Galela and Patani, North Moluccas, in organic nutmeg production.

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Market demand for nutmeg is high, as long as quality levels are assured and the spice is aflatoxin-free. The price for low quality nutmeg is around 1/3 of the price of premium quality and organic nutmeg. To improve livelihoods of nutmeg famers, the program aims to connect nutmeg farmers with (international) value chains. At the same time, the community development program works on intercultural dialogues to improve social and economic relations in the area where the program is active.

ICCO' work in the North Moluccas started in 2008, with projects focusing on grassroots democratization and peace building. The recent program is based on the two pillars of ICCO: securing sustainable livelihood and justice and dignity for all.

The project has a multisector partnership which consists of ICCO Cooperation South East Asia and Horti Chain Centre, supported by the Indonesian Netherlands Association and Financial Access. Supporting private sector partners are: AgriPro Tridaya Nusantara - Jakarta, Multi Rempah BV Manado, and LenersanPoortman - The Netherlands.

Financial support is given by the Ministry of Foreign Affairs of The Netherlands, IDH Sustainable Trade Initiative, Common Fund for Commodities and ICCO Investments.

Supporting knowledge institutions are Politeknik Perdamaian Halmahera and Yayasan Sanro Halmahera.
Empowering smallholders for organic nutmeg Indonesia

Initial situation

Indonesia has a strong position to serve the huge nutmeg demand worldwide. However, in 2012, price for North Moluccas nutmeg was low due contamination. The quality of nutmeg had deteriorated over the years due to high levels of aflatoxin. Aflatoxin are toxic metabolites produced by fungi. Implementing proper post-harvest handling practices can effectively prevent growth of molds and mycotoxin formation. The lack of knowledge on good agricultural practices had a negative influence on the positioning of North Moluccan farmers in the nutmeg value chain.

Target group

5.000 nutmeg farmers from Galela and Patani (North Moluccas), of which 2.000 female farmers.


ICCO Cooperation has developed successful models for connecting farmers and businesses to pro-poor and gender responsive value chains in South East Asia, based on the M4P (market for the poor) and Value Chain Development approaches. This includes the use of economic tools in conflict resolution and peace building. This is important because the history of tension and ethno-political conflict (1999-2003) in the region continues to influence the cooperation between stakeholders in the nutmeg value chain.

Through the strategy of blending, ICCO Cooperation combines loans, grants and guarantees in the program for sustainable execution. The sustainability of the program is also rooted in the accountability of value chain stakeholders and in raising awareness on the local influence of business activities the context of responsible business.

Goals overview

- 5.000 nutmeg farmers from Galela and Patani, North Moluccas, will increase their income with at least 10%, by producing good quality, organic, aflatoxin free nutmeg. Of the 5.000 farmer, 2.000 female farmers are targeted.
- Partner trading companies will increase their income with 10% and create 100 new jobs.
- Registered, viable and sustainable farmer groups (agribusiness units) are established and capacitated, positioned strongly in the nutmeg market and able to provide trainings to farmers.
- An internal Control System is being implemented.
- The different program strategies (grant, loan, guarantee) strengthen the multi-stakeholder platform that brings together civil society, private sector, and local universities.
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