Coffee and cocoa cooperatives – Indonesia

Strengthening farmers' cooperatives for self-reliance and income growth

Context

Indonesia is the third coffee and cocoa producing country in the world. The global demand for coffee and cocoa rises, while production growth stagnates, due to a wide range of factors. In Indonesia, many parties work in the coffee and cocoa industry, but only few of those work in cooperative structures. The majority of the farmers are linked to (inter)national traders, in which relations the farmer’s advantage is not always evident. Many individual farmers sell their coffee and cocoa to traders who do not apply quality selection and who pay low prices. Consequently, the farmers have no (financial) incentive (nor possibility) to invest in better production and quality, which drags them down into a spiral of poverty. Due to the lack of working capital, currently even farmers who do have unified do not succeed in offering volumes, big enough to obtain favourable prices.

Initiative

This initiative aims to:

• Strengthen farmers’ cooperatives and their members
• Increase the volume and quality of coffee and cocoa produced
• Enable access to finance
• Open new markets

This will grow the income of farmers’ income, because they will be able to sell more coffee and cocoa through the cooperatives. Furthermore their crops will provide a better price, because of the improved quality.
In this initiative, AJF cooperates with local partners and NGOs. The advantages are a bigger impact (number of beneficiaries), a proven methodology, an integrated approach and access to knowledge and network.

Impact

This initiative strengthens and reflects the entrepreneurship already in place. Professionalising the cooperatives, enhancing financial management and finding new markets will increase the cooperatives’ financial sustainability. Raising members’ incomes will promote their self-reliance and increase their access to education, healthy nutrition and health care. This initiative will reach 4,725 farmers and their families.