Projects

High Premium Rice Production and Marketing in Central Java

In Indonesia the demand for rice is increasingly growing, while the production is decreasing. Farmers in Central Java produce low quality rice and face many challenges in the production. Responding to this situation, ICCO identified potential partners, both public and private, to train and coach 10,000 farmers, using certified seeds and organic fertilizers and pesticides in order to improve production and marketing of high premium rice.

  • Location
  • Start project
    2015
  • Projectstatus
    Active
  • ID: NL-KVK-56484038-C_005532
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Background

The position of Indonesian farmers in the supply chain is weak and they have difficulty getting into new markets. The existing business organizations of rice farmers, LDPM’s, are not functioning well as they lack financial and marketing capacities.

ICCO identified potential public and private partners to improve production and marketing of high premium rice in Central Java. The Public Private Partnership (PPP) consists of one government body (Board of Food Security of Central Java), three private sectors (Bank Jateng, PT. UNS and PT. Smart Berdikari) and three NGOs (YJB, VECO and ICCO).

This PPP will motivate, train and coach 10,000 farmers, using certified seeds and organic fertilizers and pesticides. The market for this high premium rice is increasing annually.
To strengthen the position of the farmers in the chain, the partnership will professionalize the LDPM’s into a strong business organization, with know-how, capabilities and influence. The position of women in LDPM’s will be strengthened: women will become the owner of harvest and post-harvesting equipment.

This program is part of FDOV, which is a program of the Netherlands Enterprise Agency (RVO.nl). The project received a subsidy of 946,307 euro of FDOV.
High Premium Rice Production and Marketing in Central Java

Initial situation

In Indonesia the demand for rice is increasingly growing, while the production is decreasing. Farmers produce low quality rice and face many challenges in the production. Their position in the supply chain is weak and they have difficulty getting into new markets. The existing business organizations of rice farmers, LDPM’s, are not functioning well as they lack financial and marketing capacities. LPDM’s structure is quite loose and they lack the business-to-business (B2B) relationship among its stakeholders in the value chain. Within the program there is special attention for women, because their work in harvesting/post-harvesting period is all hand-labor and largely underpaid.

Target group

The target groups are small farmers, employees, entrepreneurs. Within this group, women are especially targeted.

Sustainability

This PPP builds on the success by Belgian NGO VECO, which supported the cooperatives in Boyolali, Central Java to develop a business plan, get access to the premium rice market (90% sales in Indonesia, 10% export to Belgium), and strengthen their organizational capacity. VECO has developed, tested and improved the intervention strategy, methods and activities. In this program VECO will lead the training process and delivery. VECO will also involve in strengthening the farmers who have been trained to share their skills, approach and network so that 10,000 farmers are achieved. Total additional production will be 2,453 tons of rice grain per year (+20%), and the income rise for male and female farmers will be on average 76 euro (+42%) per year. The income of female laborers in threshing will rise 30%.

By increasing rice production, which will contribute to the food security in the country, this project is directly in line with the Multi-Annual Strategic Plan 2016-2020 of ICCO, particularly in supporting the pillar of "Securing Livelihood”. Although there is cash and in-kind contribution, the main role of ICCO in this project is coordinating the direct implementing, facilitating and linking amongst stakeholders.

Goals overview

This Public Private Partnership (PPP) has four main aims:

1) To increase the rice production to meet the increasing demand for food/rice,
2) To improve the market efficiency and sustainability of the rice supply chain,
3) To enhance inclusive business with impact on small farmers, employees and entrepreneurs, and
4) To stimulate female entrepreneurship.
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