Projects

Production and Marketing of High Premium Rice in Central Java

The demand for rice in Indonesia is growing from year to year, whereas production is slowly decreasing. Farmers in Central Java are able to increase their supply, however, they produce low quality rice and face many production challenges. In response to this, ICCO Cooperation has established a public private partnership (PPP). Members train and coach 10,000 farmers in using certified seeds, organic fertilizers, and pesticides so as to improve the production and marketing of high premium rice.

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

Indonesian rice farmers have a weak position in the supply chain. Simultaneously it is difficult to enter new markets independently. The farmers can now join a so-called LDPM, a business organisation of rice farmers. This union increases their chance of strengthening their individual position.

Subsidy
An LDPM receives government funding as part of the Facility for Sustainable Entrepreneurship and Food Security (FDOV), which is a program of the Netherlands Enterprise Agency (RVO.nl). An LDPM assists their members and is responsible for the procurement and marketing of rice. However, there is room for improvement. The LDPMs need further professionalization to become strong business organizations with know-how, capabilities, and influence. A next step is to further develop a B2B relationship among its value chain stakeholders, and to take the financial and marketing capacities to a higher level.

Public Private Partnership
ICCO has identified potential public and private partners to improve the production and marketing of high premium rice in Central Java. The PPP consists of 1 government body, 3 private sectors, and 3 NGOs. Objective of the PPP is program implementation, training, motivation, and coaching of 10,000 farmers to use certified seeds and organic fertilizers and pesticides amongst others. Other topics that are addressed are entrepreneurship, business plan development, institutional management, networking, and marketing.

LDPM program can make a difference
Once an LDPM becomes a strong business organization, farmers can free ride on their know-how, capabilities and influence. The program offers special attention to women. Their work in the harvesting and post-harvesting period is all hand-labor and largely underpaid. It would strengthen their position if they become the owner of harvest equipment.
Production and Marketing of High Premium Rice in Central Java

Target group

The target group is small farmers, employees, and entrepreneurs. A specific target group is women farmers.

Sustainability

This PPP builds on the success by the Belgian NGO VECO. It supports 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 initiates the training process and delivery and is involved in establishing farmers who have been trained to share their skills, approach, and network.

ICCO
Although there is cash and in-kind contributions, the main role of ICCO is the technical expertise in food and nutrition security. ICCO has an innovative boost and unique approach, such as the Agribusiness Booster which provides business development services and structured investments. Furthermore, ICCO develops partnerships with local people who have a vision to transform their business and communities.

Securing Livelihood
An increase in the rice production will help the country with food security. They have reached a number of 10,000 farmers so far. They expect a total additional production of 2,453 tons of rice grain per year (+20%), and an increase in income for farmers (men and women) of 76 euro (+42%) per year on average. The income of women farmers in threshing will probably increase with 30%.

Goals overview

The four main aims of the Public Private Partnership (PPP) are to:

- Produce additional rice to meet the expected demands for food/rice
- Improve the market efficiency and sustainability of the rice supply chain
- Enhance inclusive business with impact on small farmers, employees, and entrepreneurs
- Stimulate women in entrepreneurship
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The partners

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