Anton Muhajir, Contributor, Denpasar | Fri, 11/14/2008 11:01 AM | Bali
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, the workshop was attended by 30 participants from Indonesian NGOs and focused on sustainable agriculture issues.
VECO’s Chris Claes said that, nowadays, farmers are struggling to survive. About 70% of the worlds’ poor and 75% of its malnourished live in rural areas.
Among other pressures farmers face ecological problems including erosion and diminishing soil fertility, he said.
“Farmers also face economic pressures like cheap imported commodities, land rights’ uncertainty and capital requirements,” Chris 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.
VECO, which operates in seven countries including Indonesia, Vietnam, Laos and Nicaragua, has been contributing to the development of a sustainable agricultural chain through the empowerment of farmer organizations, capacity building, multi-stakeholder chain dialogue and a range of other innovative practices.
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.
According to Harma, NGOs should remain outside the value chain, assisting farmers in decision making and advocacy issues, and helping think of alternative mechanisms for cost sharing between farmers and other actors in the chain.
“NGOs can learn data collection and analysis methods for decision making. They should introduce data collection at the production level and gather market price information, use cost analysis for financial feasibility of marketing initiatives and train NGO staff in financial analysis,” Harma said.
Another strategy, she added, could be for NGOs and farmers to involve poor communities in simple trading or processing.
Ronnie S. Natawidjaja, from Padjadjaran University’s Center for Agricultural Policy and Agribusiness (CAPAS), 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.
Ronnie continued that urbanization and population growth have created a higher demand for all food.
Unfortunately, the Indonesian agriculture sector has not been able to meet that demand. CAPAS’s research found that fresh fruit accounts for about 65% of the total sales of supermarkets’ fresh foods and vegetables.
However, the study also revealed that about 80% of those fruits were imported commodities. “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.