Asia | Smallholder farmers

The power of the ‘koperasi’

1 juni 2021 09:00

Stronger together: it’s not just a slogan for the more than 1,000 coffee farmers in the Solok Radjo cooperative in Indonesia. They still face obstacles, because banks are hesitant to finance cooperatives. That makes it difficult to grow, professionalize and build a stronger position in the coffee market. They get the working capital and resources they need to achieve that - while working as sustainable as possible.

Smallholder coffee farmers in Indonesia
2018

start collaboration Rabo Foundation and Solok Radjo

1,012

member farmers

2,000

farmers supply coffee

6 cent

more does Solok Radjo pay for every kilo of coffee

65 ha

of forest planted

The challenge

Smallholder coffee farmers in Indonesia can secure their incomes by joining a ‘koperasi’ - Indonesian for ‘cooperative’. There, they can gain access to agricultural knowledge and resources and earn a higher price for their coffee beans. But only if the cooperative has enough working capital, knowledge and access to interesting markets. Solok Radjo couldn’t offer its farmers everything they were looking for to improve their incomes and their lives, in part because the cooperative lacked the necessary financial knowledge and international network. But the main reason was that banks didn’t want to grant them loans.

Solok Radjo: a cooperative reborn

With help from Rabo Foundation, Solok Radjo can now offer its members:

reliably higher prices for their coffee beans; technical assistance to grow coffee beans better more sustainably, so they can increase the production and quality of the beans; access to high-quality seedlings, to give them enough coffee plants for the future; the option of drying and grinding beans in its own drier-grinder, which eliminates the need for expensive intermediaries in the value chain; access to international markets where the cooperative – and with it the individual farmer – can earn even higher prices for their sustainable premium coffee beans; participation in sustainability projects to compensate for carbon dioxide emissions by planting extra trees: agroforestry; potential for a stable future, because training in bookkeeping and financial reporting has made Solok Radjo more attractive to lenders other than Rabo Foundation.

With this assistance, Solok Radjo’s member farmers have sustainably increased their production, earned higher prices for their produce, and therefore increased their incomes and quality of life. It has also given the cooperative a new lease on life, to grow sustainably with consideration for the participating farmers - and for the environment.

Solok Radjo’s impact in 2020

1,012 member farmers 2,000 farmers supply coffee Solok Radjo pays 6 euro cents more per kilo of coffee than other parties 65 hectares of forest planted for CO2 compensation

Solok Radjo and Rabo Foundation

In addition to working capital to pay their farmers enough and on time, we offered Solok Radjo a loan to build an extra drier-grinder installation. With our assistance, they also participated in the World of Coffee event in Berlin; a major networking opportunity where they came into contact with new international buyers. In addition, Solok Radjo called on the help of our emergency fund to purchase pesticides. That also gave them some extra working capital to provide a temporary safety net for the coronavirus-related delays in the global coffee market.

In 2020, we shared our knowledge of financial administration and bookkeeping with them, and we helped the cooperative participate in a pilot project by USAID and South Pole to research greenhouse gas emissions. That gave them insight into how they can bring their coffee to market in a more sustainable way. As a result of the pilot project, Solok Radjo started investing in agroforestry: planting trees to compensate for their own carbon dioxide emissions. We are bringing them into contact with potential partners to expand their agroforestry activities.

Solok Radjo in 2021

This year, the cooperative noticed an increasing demand for coffee among its buyers, many of which were new customers. Fortunately, thanks to the working capital provided in 2020 and 2021 the cooperative was able to supply that demand. Solok Radjo’s farmers also came though the coronavirus pandemic relatively unscathed, even though their export costs tripled due to the global logistical problems. They exported fewer coffee beans in 2020, but demand has picked up again in 2021. This year, the cooperative plans on tending its good relationships with its members in addition to tending trees through agroforestry and sustainably increasing its production.


Find out more about our impact in Asia in 2020. Explore our results and read more stories that showcases how we create growth opportunities for smallholder farmers.