AGRIBUSINESS MARKET AND SUPPORT ACTIVITY AMARTA March 31, 2011

1. AGRIBUSINESS MARKET AND SUPPORT ACTIVITY (AMARTA)March 31, 2011 Implemented by Development Alternatives Inc. Under RAISE Plus IQC No. EDH-I-00-05-00004-00 In Association with: Winrock International Michigan State University National Cooperative Business Association Wilbur Smith Associates, Inc. TRG QED

2. Agenda Introduction Subcontractors Organizational Chart Key Contacts in the Government of Indonesia Performance Results Challenges Value Chain Interventions Grants Program

3. Introduction Contract: 4 years and 7 months, $20,606,307 program (AMARTA $17,011,061 and PADA $3,595,246) from September 29, 2006 through December 31, 2010 Expenditures: $18,825,755 through February 28, 2011 Goals: 1) Assist the Government of Indonesia to develop a more robust, competitive agribusiness economy enabling the creation of work opportunities, economic growth, and improvement in citizen’s welfare: 2) Increased productivity, improved quality and added value to access better markets Grant activities: Demonstrate pilot projects for new technology, improved agricultural practices, and market development

4. Subcontractors Completed Efforts Winrock International Inc. ($1,508,078) Key industry advisor and competitiveness/value chain analysis Michigan State University ($370,943) Supermarket and retail studies, agribusiness exports, and communications National Cooperative Business Assoc. ($39,063) cocoa, spices, livestock and cooperative development QED ($24,501) Monitoring and evaluation Training Resources Group (TRG) ($43,727) Institutional development, training, and team building Wilbur Smith Associates, Inc. ($51,380) Infrastructure analysis and investment promotion

6. Key Contacts in the GOI Bayu Krisnamurti, Vice Minister of Agriculture Dr. Ahmad Dimyati, DG for Horticulture, MOA Ahmad Mangga Barani, DG for Estate Crops, MOA Prof. Dr. Zaenal Bachruddin, DG for Agricultural Processing and Marketing, MOA Dr. Ato suprapto, DG of Agency for Human Resources Development, MOA Dr. Haryono, Deputy DG, Agency for Agricultural Research and Development, MOA Ir. Farid Hasan Baktir, MEc, Director, International Cooperation Bureau, MOA Syahrul Yasin Limpo, Governor of S. Sulawesi Ir. Zainal Abidin, Sekda, South East Sulawesi Ir. Fadel Muhammad, Minister of Fisheries Ir. Syamsul Arifin, Governor of North Sumatera Barnabas Suebu, SH, Governor of Papua Daulat Daniel Sinulingga, former Regent of Karo Yopie Batubara, Former Senator of North Sumatra Parlindungan Batubara, Senator of North Sumatra ICASEPS – Indonesian Center for Agriculture Social Economic and Policy Studies PSP3 – Center for Agriculture and Rural Development Studies (CARDS) Bappenas and State Secretariat

7. Performance Results 72,605 additional hectares under improved technologies or management practices as a result of USG assistance. 1a. 319,500 additional units of animals, fish, and other aquaculture products under improved technologies or management practices 3,798 producer organizations, water user associations, trade and business associations, and community-based organizations receiving USG assistance 202 agriculture related firms benefiting directly from USG supported interventions 172,267 individuals who have received USG supported short term agricultural productivity training, including 102,139 men (81%) and 23,959 women (19%) 79% increase in value of international exports as a result of USG assistance 88% increase in value of purchases from smallholders as a result of USG assistance 238 new technologies or management practices made available for transfer 33 additional surveillance and/or control systems in place for agricultural threats 43 public-private partnerships formed 61 women’s organizations/associations assisted as a result of USG supported interventions

8. Challenges for Beneficiaries Slow adaptation and replication of pilot projects Access to high quality seeds and planting materials Poor transport infrastructure for farmers to access markets Limited access to credit Remoteness of Papua and transportation to villages Poor cold chain and transport infrastructure; anti-competitive permits and export licensing fees

9. Value Chain Interventions Commodity value chain assistance for improved competitiveness: Cocoa Coffee High Value Horticulture: Fruits and Vegetable Floriculture (Renewed) Enabling Environment Livestock (Curtailed) Aquaculture (Curtailed) Seaweed (Removed) Rubber (Removed) Bio-fuels (Removed)

11. Cocoa: Activities and Accomplishments

12. Cocoa

13. Cocoa

14. (North Sumatera, Aceh, Sulawesi, Flores, and Papua) Formation of SCAI Specialty Coffee Association of Indonesia); currently 103 members. The largest segment continues to be exporters, followed by individuals, farmer’s cooperatives and retailers. The thirteen coffee cooperatives that have joined the association represent 22,000 members SCAI members exported $115 million of Arabica Coffee in 2010 alone. The cumulative export value of all SCAI members from 2008 – 2010 was over $328 million. SCAI members from cafes and retailers created jobs for more than 80 Baristas, while the exporter members created or supported at least 22,000 jobs in farmers’ cooperatives. Established Q-Grader program in Indonesia with 44 licensed professionals Hosted trip by U.S. coffee buyers, resulting in $609,000 of new purchases 1,000 new jobs created in coffee sorting and other labor Contract for export between Baliem Arabica Cooperative and Paragon Coffee USA Implementing coffee farmer training for 5,646 growers in N. Sumatera from 629 Farmers Group Now demonstrating hypotant instead of brocatrap (in simalungun infestation rate from 30-70%) Coffee: Activities and Accomplishments

15. Coffee

16. Coffee

17. (North Sumatera and West Java) Training and TA for 17,882 citrus farmers, 10,424 ha of land benefiting 53,646 family members Production increased 76%, from about 6,900 kg per ha to 12,133 kg per ha; sales prices increased from Rp. 2,533 per kg to Rp. 3,266 per kg or 29% due to increased fruit quality and quantity Approximately 37,000 new part-time jobs created as a result of increased yields (1 ton= 3 to 5 laborers) Training and TA for 11,901 banana farmers, 9,156 ha benefiting 35,703 family members Increased banana production from 693 to 1560 bunches per ha (125%); Average monthly income from banana fields increased 118% from Rp. 1,119,116 to Rp. 2,445,238. In collaboration with PT. Sewu Segar Nusantara and the Deli Serdang Cooperative, 3,960,000 hands (assuming production capacity was 1,320,000 hands per year) were sold in Jakarta and Medan. With an average price ranging from Rp. 4,000 - 6,000, total revenue is approximately Rp. 4,221,608,000 ($469,068). By producing 1,320,000 hands per year, banana activities created approximately 4,400 jobs (including daily labors, harvest labor, and shipping labor). Increased 3,000 farmer’s income in West Java by 15% by an estimated total of $600,000 per year following implementation of AMARTA production practices. Increased income to growers served by the Value Chain Center (VCC) by 6.5% or an estimated total of $500,000 per year through improved business practices. Most of the increase to grower income through VCC is through improved packing and marketing and improving farmer solidarity High Value Horticulture, I. Fruits: Activities and Accomplishments

18. High Value Horticulture

19. High Value Horticulture

20. (North Sumatera and West Java) Introduced new seed varieties to improve production for Broccoli, Green Beans, Carrots, Tomatoes, and Green leafy, Potatoes, and Cucumber Expanding capacity of Bimandiri packing house in Garut from 2,500 kg/day to 6,500 kg/day within 3 years, reducing product loss by 25% Broccoli demplot in W. Java increased yields from 1.2 tons to 1.8 tons/1,000 sq m resulting in Rp. 5.4mm in total sales revenue, production cost of Rp. 2.4mm Trained 150 carrot farmers covering 38 ha, benefiting 450 family members; increased harvest from 30,000 kg/ha to 40,000 kg/ha (30%) Created 120 new jobs in rural areas of Garut, Lembang, and Cibodas as a direct result of project initiatives. Introduced new technology: potato seed production, irrigation system for beef tomatoes & carrots, plastic row cover for beef tomatoes, fertigation technic for beef tomatoes at Garut Introduced new technology: Irrigation system for broccoli, high density population planting for broccoli, fertigation technic for broccoli, land tillage mechanization for green bean, mechanical weeding for green bean, new plant spacing for green bean Farm Management training focusing on Farm record keeping for 618 people at Garut and Bandung with 50 tutorials High Value Horticulture, II. Vegetables: Activities and Accomplishments

21. High Value Horticulture

22. High Value Horticulture

23. (North Sumatera) Provided training and TA for 128 chrysanthemum farmers covering 38 ha, benefiting 384 family members Farmers adopting GAP increased harvest from 70 to 100 cut flowers/m2 (42%) and selling price from Rp. 2,000 to Rp. 3,000 (50%) per bucket Constructed prototype greenhouse to stimulate farmer’s interest in cut flowers Creating a reliable cut flower cluster to produce sufficient quantity and quality to link with buyers in Sumatera, while promoting the current wholesale market Re-initiating activity in Berastagi, N. Sumatera with grower training and provision of up to 20 additional greenhouses and new planting material for expanded program. Floriculture: Activities and Accomplishments(Activity Renewed)

24. Floriculture

25. Floriculture

26. Enabling Environment: Regional Agribusiness Competitiveness Alliances (RACA)  “Empower organizations to lobby for private agribusiness interests; facilitate public-private dialogue to develop policy and regulatory initiatives for conducive agribusiness climate” Selected Activities and Accomplishments: Karo Horticulture Community: Hearing with local parliament and submission of a white paper and four proposals, advocacy through radio broadcasting, market and credit access advocacy in collaboration with Senator Parlindungan Purba, established alliance’s cooperative Tabanan Cocoa Community Alliance: Received from GOI Rp. 84mm for funding cocoa driers in 2008 and Rp. 12mm for pheromone traps in 2009, convinced the Governor of Bali to remove the Cocoa Market Regionalization policy

28. Enabling Environment: Regional Agribusiness Competitiveness Alliances (RACA) : Continued Deli Serdang Barangan Banana Community: Submitted four proposals to provincial government, continuing collaboration with Senator Parlindungan Purba on market and credit access advocacy, received planting material from local government Jembrana Cocoa Community Alliance: Public Private Dialogue on cocoa development issues and policies, local government pledged to support cocoa processing facilities West Java Agribusiness Action Group: Regularly conducts Public Private Dialogue on policy issues (agro-finance, farm inputs, livestock policies), help established The Value Chain Center in collaboration with LPPM-UNPAD Established Simalungun Regency Agribusiness Alliance with 200 stakeholders and joint office and officials on January 21, 2010, hearing with local parliament, Established Pro-Agribusiness Alliance for Pakpak Bharat Regency with 230 stakeholders and joint office and officials on February 11, 2010, hearing with local parliament, established alliance’s cooperative Established SIKAP MANDAR, ASTAKAWA, and ALMAKOTA Alliances in North Sumatera in 2010

29. (Kupang, West Timor) Grant to Puskud NTT- part of NCBA organization- to supply 300 female Bali cattle for a cow-calf operation to increase supply of fat livestock for slaughter, benefiting 38 FGs and 300 farmers 54 additional cows provided in-kind by the grantee as well as establishing a fund from total sales to benefit new farmers 64% survival rate for calves which is significantly higher than other programs in Indonesia The Vice President of Indonesia commended the program and informed Governor that NTT must be a leader in livestock cattle production Other donor organizations and NGOs replicating the program based on economic evaluation and success of interventions Livestock: Activities and Accomplishments(Activities curtailed)

30. Livestock

31. Livestock

32. (Aceh, NTT/NTB, and Papua) Grant to revive the black tiger shrimp business in Aceh with a laboratory to certify and sell disease free post-larvae Grant to PT Karamba in Flores to produce grouper fingerlings to satisfy Indonesian demand- PT Karamba now has increased the production capacity to 15,000 - 20,000 fingerlings per month Grant to Warloka Village, Flores for net cage grouper project; 10,000 fingerlings. expect 4,000 KG sales in yearly total. Producing three tons of ice per day in Kokonau using new ice block machine, sold more than $2,500 of ice since August 2008 Between August 2008 and June 2010 the Cooperative Maria Bintang Laut purchased $61,653 or 91,389 kg of fish from local fishermen As of June 2010 the cooperative has spent around $ 85,740 to buy fish, and the money goes directly to the benefit of the fishermen. Training continues for 5 local men to run and maintain the condition of ice factory and 5-ton boat granted to the Cooperative. Out of 5 people trained : 2 people are competent already to run the ice factory and boats and maintenance work. 3 others are now assisting the two with assistance of AMARTA-PADA staff to improve their skills and take over the operation and maintenance of ice factory, boats, equipment, etc. Aquaculture: Activities and Accomplishments(Activities curtailed)

33. Aquaculture

34. (Gorontalo) Supported 38 nurseries, supplying 389 farmers with planting material; established farmer-owned nurseries to insure availability of planting material Production reached 92 tons of dry seaweed per month, worth $220,800 or $43 per 500 meters of line Developed innovative cleaning and drying techniques to increase production Facilitated exports of $144,538 of seaweed Seaweed: Activities and Accomplishments(Activity Removed)

35. Seaweed

36. (Bangka Island, West and South Kalimantan, North Sumatera) Partnered with Bridgestone who provided over 50,000 planting materials in 2008 providing improved access to bolster productivity for 22 farmer groups and 141 farmers Madina Estate Crops Office provided $13,000 in support in 2008 Training smallholder rubber growers in tapping and collection practices and establishing 4 latex processing units to improve the quality and added value of raw materials Improving clone purification for bud-wood gardens at PT Karini Utama and Berkah Nursery Rubber: Activities and Accomplishments(Activity Removed)

37. Rubber

38. (Flores, NTT) Implemented village-based crude jatropha oil (CJO) production and processing for alternative energy for 2 FGs and 718 beneficiaries 100,000 jatropha trees planted in 2009 Grant provided for CJO pressing and filtering equipment and training for village operators Demonstrated modified agriculture machinery engines and home lighting and cooking appliances operating on CJO Stoves donated by Siemens are currently being tested for cooking Bio-fuels: Activities and Accomplishments

39. Bio-fuels

40. Grants To improve productivity, quality, and public awareness by supporting the development of innovative solutions to agribusiness value chain competitiveness constraints

41. Public Outreach Monthly Newsletter Success Stories Significant press coverage AMARTA website http://www.amarta.net Brochures, Fact Sheets, and DVDs