Indonesia | Fair value chains

Impact in focus: MIO puts the coconut sugar farmer first

29 December 2023 8:00

Coconut sugar is an increasingly popular, healthier alternative to refined sugars. And that’s good news for the farmers in Indonesia who produce this sugar. Our partner MIO (Mega Inovasi Organik) supports thousands farmers to produce sugar of a higher quality. MIO also guarantees a good price for the sugar, and guides them in the cultivation of a greater variety of crops.

Een kokosboer is in de boom geklommen om sap te oogsten

150 farmers

joined the first year of MIO (2011)

1,400 farmers

joined MIO between 2011 and 2022

1,500 farmers

will join MIO through 2024

To maintain production levels, coconut sugar farmers climb high into their trees to collect sap twice a day. It is dangerous work, and few farmers are insured against taking a fall. They boil down the sap until only the sugar is left, but it often contains impurities. They don’t get the best price for this sugar. And because they produce and supply all year round, they must also do so when the coconut sugar price is low, which is not good for revenue either.

Een kokosboer beklimt een boom om sap te oogsten
Een kokosboer beklimt een boom om sap te oogsten
Een kokosboer kookt sap in om suiker te maken

Strength – as so often – lies in numbers. That’s why MIO unites farmers in cooperatives. Such as the Women’s Union in the photograph below. As a group, these farmers receive training from MIO field officers like Kartono, who advises the women’s union on how to produce sugar of high quality. In addition, MIO finances farmers who upgrade the kitchens in which they prepare their sugar – for better quality sugar and a healthier workplace.

Officer Kartono geeft advies aan de Women's Union
Kokosboomsap wordt gekookt om suiker te winnen
Kokosboom wordt gefilterd om stukjes eruit te halen

MIO gives farmers a good price for sugar and arranges its sale and transportation to buyers all over the world. A MIO collector collects the sugar, pays the farmer and labels the sacks. In addition, cooperatives receive a bonus sum for the best sugar, which goes into a mutual fund used by the farmers to invest in their communities together. For example, from the fund they are paying 40% of farmers’ workplace accident insurance.

Een kokosboer plakt een tag op een zak suiker
Collector Kasini betaalt een kokosboer voor haar werk.
Een kokosboer stapelt de gewonnen suiker bij elkaar

MIO works to improve the lives of coconut farmers in more ways than one. The organization has recently started buying and selling other crops that the farmers grow. In the demo garden in the photograph, farmers learn how to grow a greater variety of crops. Crops that are better resistant to the effects of climate change, something that also contributes to a more stable income. Moreover, MIO invests in infrastructure in the regions where their farmers live, makes donations to social organizations such as orphanages and offers student grants to farmers’ children.

Officer Kartono en een kokosboer inspecteren de jungle garden
Twee kokosboeren inspecteren bladeren van een plant
Een kokosboer inspecteert verschillende ingredienten

Rabo Foundation & MIO

The partnership with MIO started in 2022. ‘They approached us because, like many rapidly growing organizations, they needed more working capital to fulfill the increasing demand from buyers,’ explains Retno Dwi Jayanti, Consultant at Rabo Foundation in Indonesia. ‘Thanks to our trade loan, MIO can pay farmers upon delivery, before the sugar goes to buyers. And they can do so for increasing numbers of farmers. The first loan matured in August 2023 and a second was initiated towards the end of 2023.’

The reason to work with MIO was simple, says Retno. ‘They put the welfare of farmers first. Thanks, among other things, to their training, financing and the honest price they pay for sugar, farmers’ incomes are increasing and their lives are improving.’ And: ‘Watching the farmers boil down the coconut sap, take me back to my childhood when my grandmother used to also produce coconut sugar.’

Rabo Foundation believes that this cooperative partnership helps improve access to finance, a network and knowledge for smallholder farmers. That’s why we support organizations such as MIO in Indonesia. It enables them to continue to grow and offers farmers greater perspective for the future.