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Friday, 16-May-2008
Australian Initiative Gives a Boost to Peanut Farmers in Eastern Indonesia
Mataram, May 13, 2008— Eighteen thousand peanut farmers are set to benefit from an innovative Australian program designed to increase rural growth and household incomes in Nusa Tenggara Barat. Under the A$38 million Smallholder Agribusiness Development Initiative (SADI) – a program under the Australia Indonesia Partnership – leading peanut-based food manufacturer PT Garuda Food Putra Putri Jaya (GarudaFood) will work with peanut farmers to increase the supply of fresh raw peanuts in Nusa Tenggara Barat (NTB).

Managing Director Hartono Atmadja said, “To strengthen linkages with the peanut farmers, GarudaFood is actively developed partnership system with mutual benefit”.

GarudaFood will provide peanut seeds, technical assistance and market guarantees to 18,000 peanut farmers in NTB under a nucleus-plasma scheme. The program is expected to increase farmers’ incomes by giving them the opportunity to reduce operating costs and improve the quality and quantity of their production. Farmers are expected to produce approximately 12,500 tons of fresh raw peanuts per harvest and sell them to a guaranteed buyer – GarudaFood.

International Finance Corporation (IFC), a member of the World Bank Group participates in this project through SADI. IFC will provide technical and management assistance to Garuda Food, particularly in developing its supply chain linkages.

This project proven the government commitment to support farming sector in Indonesia as well as to improve food security issue.

Ernest E. Bethe III, IFC Program Manager, said “NTB has potential to be a major competitive support for the Indonesian snack food industry. By working with GarudaFood, we hope to demonstrate the economic value of building durable linkages between smallholder farmers and lead firms. This project illustrates the potential of focusing supply chain strengthening via a lead firm, community investment and applied research and development in a coordinated way.”

Benefits for the peanut farmers will be achieved not only through strengthened private sector agribusiness development, implemented by the IFC, but also due to expected community-supported investments in equipment, facilitated by PNPM (National Program for Community Empowerment) and the support of ACIAR (Australian Centre Institute for International Agricultural Research) in working with local research organizations to improve peanut seed stock and extension services in NTB.

Commenting on the initiative, Blair Exell, Head of the Australian Agency for International Development (AusAID) in Indonesia said, “This partnership between the private sector and small farmers will significantly improve household incomes and contribute to local economic growth. I am pleased Australia’s partnership with the Government of Indonesia is able to contribute to so many local communities in Lombok”.

Peanut is an important crop in Indonesia, its annual national consumption was estimated at over 700,000 tons or 3.20 kg per capita in 2002. Indonesia’s processed snack foods market reached a value of US$ 450 million in 2002, and 35 percent of this market is made from peanut and other nut products. The value of Indonesia’s processed snack food market is estimated to have reached US$ 723 million in 2007 or the equivalent of US$ 253 million of peanut and nut products. Unfortunately, Indonesia’s peanut production is not able to meet the growing national demand, and has made Indonesia a net importer of peanut.

About SADI

SADI is an A$38 million program funded under the Australia Indonesia Partnership (AIP) aims to improve incomes and productivity for farmers and agribusiness, in response to market opportunities, and adding value to products both on and off the farm in four eastern provinces—East Nusa Tenggara, West Nusa Tenggara, South East Sulawesi and South Sulawesi.

The Program comprises three interdependent Subprograms:

•Enhanced smallholder production and marketing, implemented by PNPM (National Program for Community Empowerment)

•Strengthened private sector agribusiness and Small-Medium Enterprise development, implemented by International Finance Corporation (IFC), a member of the World Bank Group.

•Support for market-driven adaptive research, implemented by ACIAR(Australian Centre Institute for International Agricultural Research)

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