The power of the ‘koperasi’

Smallholder coffee farmers in Indonesia can secure their incomes by joining a ‘koperasi’ - Indonesian for ‘cooperative’. There, they can gain access to agricultural knowledge and resources and earn a higher price for their coffee beans. But only if the cooperative has enough working capital, knowledge and access to interesting markets. Solok Radjo couldn’t offer its farmers everything they were looking for to improve their incomes and their lives, in part because the cooperative lacked the necessary financial knowledge and international network. But the main reason was that banks didn’t want to grant them loans.

With help from Rabo Foundation, Solok Radjo can now offer its members:

With this assistance, Solok Radjo’s member farmers have sustainably increased their production, earned higher prices for their produce, and therefore increased their incomes and quality of life. It has also given the cooperative a new lease on life, to grow sustainably with consideration for the participating farmers - and for the environment.

In addition to working capital to pay their farmers enough and on time, we offered Solok Radjo a loan to build an extra drier-grinder installation. With our assistance, they also participated in the World of Coffee event in Berlin; a major networking opportunity where they came into contact with new international buyers. In addition, Solok Radjo called on the help of our emergency fund to purchase pesticides. That also gave them some extra working capital to provide a temporary safety net for the coronavirus-related delays in the global coffee market.

In 2020, we shared our knowledge of financial administration and bookkeeping with them, and we helped the cooperative participate in a pilot project by USAID and South Pole to research greenhouse gas emissions. That gave them insight into how they can bring their coffee to market in a more sustainable way. As a result of the pilot project, Solok Radjo started investing in agroforestry: planting trees to compensate for their own carbon dioxide emissions. We are bringing them into contact with potential partners to expand their agroforestry activities.

This year, the cooperative noticed an increasing demand for coffee among its buyers, many of which were new customers. Fortunately, thanks to the working capital provided in 2020 and 2021 the cooperative was able to supply that demand. Solok Radjo’s farmers also came though the coronavirus pandemic relatively unscathed, even though their export costs tripled due to the global logistical problems. They exported fewer coffee beans in 2020, but demand has picked up again in 2021. This year, the cooperative plans on tending its good relationships with its members in addition to tending trees through agroforestry and sustainably increasing its production.