01/05/2018

Increasing farmers incomes by growing their production

"Rubber farming is all hard work and there is little to no incentives for harvesting latex,” said Pak Joko, who like many others came to Sumatra as a domestic trans-migrant. “Plus, the price of latex keeps falling. I would just leave the trees to nature. Why bother putting more effort into it?” He lives in Mendis Village in South Sumatera and like most farmers in the area he is struggling to keep his old rubber trees producing enough latex.

Indonesia is the second biggest rubber producer in the world, supplying around 27% of the globe’s rubber production, second only to Thailand (35%). In total, there are 3.6 million hectares of rubber cultivated area throughout Indonesia, and 85% of those are dominated by smallholders’ plantations. The national rubber production stands at 3.16 million tons, of which 2.49 million tons are exported. The United States, Japan, and China are the three top export destination of Indonesian rubber. Smallholders’ rubber plantations across Indonesia face low and/or declining yields and quality of their latex due to a variety of factors. On average, smallholder productivity is very low at 0.84 ton per hectare, compared to privately-owned plantation that averages at 1.1 ton per hectare.

The Sumatra province is one of Indonesia’s rubber production center with over 946,000 tons produced per year. It is also one of the main cash crops, and generates job and income opportunities for more than 450,000 households in the province.

To promote a sustainable and professional rubber industry, SNV joined other international development organisations to support the South Sumatera Provincial Government’s Green Growth vision under the South Sumatra Partnership for Landscape Management Support Project - or KELOLA Sendang.

Joko lifts a crate of latex cubes for a processing company (P.C.Gilang A Riva’i)

Improving smallholders’ productivity requires a multifaceted approach. Challenges that farmers' face are their use of low-yielding rubber varieties; rubber trees planted on unsuitable soils; poorly designed plantations; aging trees and the lack of rehabilitation and replanting; poor plantation management practices; and poorly timed harvesting. “Before, we were lucky to get any training.” Confessed Pak Joko, “Fertilisers were extremely hard to get. The closest latex processing plant was a two-hour drive over dirt road and the cost of shipping our harvest was very high”

The Mendis village is one of the more successful examples from the KELOLA Sendang project. For the project, SNV provided training to the farmers and helped establish a community trading post. In addition, we supported the creation of a partnership with PT Djambi Waras, a local crumb rubber factory. As a result the income of farmers in the village increased significantly. “Our aim is to economically benefit all rubber smallholders, government extension workers, and company staffers,” said Rizki Pandu Permana, SNV Agriculture Sector Leader. “We hope to increase their skills and income through our holistic and combined approach.”

Joko and farmers shipping dried rubber cubes to a factory(P.C.Denny Defriansyah)

SNV’s training programme helped smallholder farmers in the village to improve the quality of their tapping technique, storage, quality of rubber and diversification income. For example, they improved quality and production of fresh latex by tapping in intervals; the average weekly harvest raised from 120 to 160 kilograms per hectare. The new trading post enabled the farmers to supply their product directly to the local crumb factory, cutting out several middlemen.

To further encourage farmers, SNV organised visitations to rubber factories to learn standards of rubber processor companies and direct selling to companies. With these skills and knowledge, SNV hopes that farmers will improve the quality and quantity of their products in order to expand market access. On top of that, farmers received knowledge on management skills and on how to obtain loans and develop business units.

As a result this strategy, the price of dry latex cube from IDR 5,000 (30 eurocents) to IDR 8,000-10,200 per kilogram (50-60 eurocents). Despite fluctuations in the price of rubber, farmers now get a better deal because the factory buys their latex based on the price of the international market, which is higher than what the local traders offer.

With this sucsses, SNV is optimistic that others villages in the area will be inspired to replicate the lesson learned and the best practices gained in Mendis.