Profile ‘Production and Marketing of High Premium Rice in Central Java, Indonesia’

Who? The partners in this PPP are the local Indonesian foundation Yayasan Jateng Berdikari (YJB), the local Bank Jateng, two private sector actors Unggul Niaga Selaras (UNS; provider of fertilizers) and Sebelas Maret Berdikari (SMB; miller and provider of seeds), the Food Security Board of the government of Central Java, the Belgian ngo VECO, and the Dutch ngo ICCO Cooperation South East Asia (ICCO Cooperation SEA).

What? The project will be working for the following results:

  • 21,870 tons of harvested unmilled rice is produced on 2,500 ha of paddy rice fields annually
  • 10,000 small-scale rice farmers and their families sustainably increase their income by approximately 42% due to high premium prices, improved quality, higher productivity, reduced harvesting costs and more environment-friendly production methods
  • 58 local LDPMs are functioning as effective and efficient rice farmer enterprises
  • the income of women will increase sustainably, and they are responsible for managing harvest and post-harvest equipment in the LDPMs

Where? The project takes place in 29 districts in the province of Central Java, Indonesia. There are 3.2 million rice farmers in those districts, but this project will involve 10,000 farmers. It is expected that the government will expand to reach more farmers in the future.

When? The PPP started in July 2015 and will end in December 2019.

Why? In 2014 rice paddy production in Central Java decreased by 707,000 tons, partly caused by natural disaster but also by a decrease of the rice farming area by almost 2%. Many local governments are prioritizing urban development in favour of rice production. From 2000 to 2010, this resulted in the conversion of 14,830 hectares of rice paddy land. In the 1970s during Indonesia’s Green Revolution, farmers started to grow new rice varieties which can be harvested faster. The local varieties that farmers used to plant in the earlier days became obsolete. New varieties require higher inputs, including water, chemical fertilizers and pesticides. Since soil fertility has declined, dependency on chemical fertilizers has increased.

From a more macro-economic perspective, Indonesia is a rice importer as well as a rice exporter. In 2009 and 2010, around 1.2 million tons rice were exported, while in 2011 and 2012 around 1.9 million tons were imported. The free trade in ASEAN countries forms a threat for local rice farmers. Farmers need to proof that their product is better than imported premium rice. Indonesian production technology and productivity is less sophisticated compared to other rice producers in ASEAN countries, such as Vietnam and Thailand.

As such the key problems that the PPP wants to address are the shortage of rice in Indonesia, and food and nutrition insecurity of rural farmers in Central Java. The project goals are to increase the good quality rice production to meet the increasing demand, to sustainably reduce the dependency of Indonesia on rice imports, to improve market efficiency and sustainability of the rice supply chain, to stimulate inclusive business with impact on small-scale farmers, and to enhance women entrepreneurship.

Want to know more about what this PPP is about? Here you can read the interview with Priyo Budi Asmoro (project manager) of ICCO Cooperation SEA.