SEE Solutions - Social and Economic Empowerment

Access to Markets Initiative

Needs

On the Indonesian island of Flores, smallholder farmers in rural areas are limited to selling their produce in local and informal markets, which reduces their ability to grow their income. Farmers are at the mercy of middlemen and traders who mostly don’t disclose vital information about quality, quantities, logistics and buyer needs, information which could contribute to increased profits for the producers.
Goals

To increase the incomes of poor producers, by enabling them to participate fully in the marketplace. The project takes a “market driven” approach by identifying real market opportunities for increasing income, rather than focusing on what farmers have traditionally been producing.
Activities
A Market Facilitator plays a critical role in assisting farmers to understand available market opportunities. The Market Facilitator will:

> Provide market intelligence to producers on issues such as quality, quantities, packaging or transport, enabling them to negotiate better deals for their produce.
> Provide buyers with information about new producers who are being mentored to meet buyer needs.
> Provide producers with concrete goals that are attractive enough for them to take the risks of accessing microfinance and new technologies, as well as forming village farmer groups that sell produce collectively to meet buyer needs.
> Act as a mentor to producer groups, informing them of buyers’ needs and expectations, providing information about the value chains of which they are part, as well as promoting direct relationships between buyers and producers.

By project end it is hoped that the Market Facilitator will have worked his/her way out of a job by providing producers with the “know-how”, skills and capacity to gather the market information they need to increase their income on their own.
Beneficiaries

Farmers and primary producers who are earning less than $1 per day

The Situation

Indonesia - Access to Markets initiative

Update: March 2010
- The Market Facilitator has conducted research to identify 30 potential market opportunities that could generate income for farmers and primary producers. Of this 30, six products have been identified as having high opportunity for development: cacao, candle nut, copra, banana, tamarind and cashew.
- Potential buyers have been identified, including factories that process raw produce into a more refined product.
- Information has been shared with seven villages about the potential price, quality expectations and packaging requirements of the six “high-potential” products.
- The Market Facilitator has supported existing village farmer groups to combine their produce (known as collective selling). In this way, farmers can gain better prices than when they sell on their own, because the buyer does not have to travel to individual farmers to collect the produce.

Updates

Update: July 2011

Farmers from five villages are now working together to sell their produce collectively to buyers from the local market via a “one gate system”. As a result the price they can sell their produce for has increased fivefold.

Establishing this one gate system has not been without challenges. Some farmers were reluctant to participate, preferring instead to stick with selling to middlemen. Also, the farmers discovered that their traditional bookkeeping system was not appropriate for this new collective selling arrangement.

Nevertheless, there is a growing awareness amongst farmers that they can produce high quality products that are in high market demand and that they have the potential to increase their incomes dramatically.

Recent exposure trips to markets in a neighbouring district and as far afield as the city of Surabaya has enabled the farmers to learn more about potential buyers, transportation costs and packaging requirements. They gained valuable experience by meeting with buyers and exporters and talking with them about product quality, pricing and other market issues.

The Market Facilitator continues to identify potential new buyers and to build relationships with existing buyers. The project is also developing good working relationships with the local government and local NGOs to promote knowledge and information sharing.

Update: March 2010

The Market Facilitator has conducted research to identify 30 potential market opportunities that could generate income for farmers and primary producers. Of this 30, six products have been identified as having high opportunity for development: cacao, candle nut, copra, banana, tamarind and cashew.
Potential buyers have been identified, including factories that process raw produce into a more refined product.
Information has been shared with seven villages about the potential price, quality expectations and packaging requirements of the six “high-potential” products.
The Market Facilitator has supported existing village farmer groups to combine their produce (known as collective selling). In this way, farmers can gain better prices than when they sell on their own, because the buyer does not have to travel to individual farmers to collect the produce.