Lombok, Indonesia, March 17, 2011—IFC, a member of the World Bank Group, and the Australia Indonesia Partnership said their venture with GarudaFood has helped raise productivity for over 8,000 Indonesian smallholder farmers by 30 percent and individual incomes by 3.9 million Indonesian rupiah per hectare annually.
IFC, supported by the Australia Indonesia Partnership, is helping GarudaFood incorporate peanut farmers in the West Nusa Tenggara into its supply chain to increase both the farmers’ and the company’s revenues. As a result of this partnership, GarudaFood, one of Indonesia’s leading food and beverage manufacturers, has raised its productivity by as much as a third.
“IFC and GarudaFood share the same vision of improving the livelihoods of smallholder farmers by sourcing directly from them,” said Hartono Atmadja, Managing Director of GarudaFood. “Our partnership with IFC resulted in a synergy that has improved farmers’ lives and increased our productivity and revenue.”
IFC helped GarudaFood develop a profitable supply chain model and training modules, and it provided consultations and training for the company’s field staff. GarudaFood disseminates the knowledge to farmers through its subsidiary, PT Bumi Mekar Tani, and provides the farmers with quality seeds and farming equipment. The company purchases crops directly from the farmers, paying a premium when superior quality is achieved.
“IFC’s partnership with GarudaFood demonstrates that incorporating smallholder farmers into a company’s supply chain can be done profitably,” said Bruce Moats, IFC’s Corporate Relations Director. “The project also fostered good agribusiness practices through training in modern farming techniques that has helped raise productivity of thousands of farmers and increase rural incomes.”
IFC and the Australia Indonesia Partnership are handing over the project to GarudaFood, which plans to maintain its relationships with participating farmers and later invite others to join. The project has prompted a group of stakeholders in the peanut industry to establish a forum to disseminate the lessons learned.
The project is part of the Australia Indonesia Partnership’s Smallholder Agribusiness Development Initiative (SADI) to improve the livelihoods of small farmers in rural areas. Petrarca Karetji, Director of AusAID’s Decentralization, Poverty Reduction, and Rural Productivity, said, “Our experience working with IFC and GarudaFood has shown that we can develop small farmers through training by big companies. This ensures sustainable markets for farmers.”