The Covid-19 pandemic has badly affected the economy of Indonesia, hitting the tourism reliant island of Bali heavier than most provinces. However, this calamity presents an opportunity for the rise of the agriculture sector, second-largest contributor to the Balinese economy after tourism (Badan Pusat Statistik Provinsi Bali (bps.go.id)). One of the most significant commodities contributing to Bali’s agriculture sector is coffee.
It is essential to note that Indonesia is one of the biggest coffee producers in the world after Brazil, Vietnam, and Colombia (Which country produced the most coffee in 2020? | World Economic Forum (weforum.org)). According to Indonesian Statistics, in 2020, Indonesia produced 762 thousand tons of coffee with almost all of the produce coming from individual smallholder farmers, many of whom are from Bali and recognized for their unique coffee flavor.
Unfortunately, to date the farmers have been selling their products for very low prices because of the limited access to markets and resources to improve the quality of the harvest. In addition to that, farmers and cooperatives lack connectivity to the international markets due to an absence of digital tools and networks. There is a need for a commodity tracking system from harvest to delivery, and for buyers to understand the origin of the product and practice of it’s cultivation.
It is significant to distinguish the quality and price so the farmers can access a fairer trade. Therefore, a digital solution is urgently needed to tackle these challenges. AgUnity plans to deploy their smartphone solutions to 900 smallholder farmers in Tabanan, Bali. of which 70% are female farmers. It is not only limited to coffee farmers but will also include other commodities like cocoa, a famous product of the region. The AgUnity digital solution of low-cost smartphones comes equipped with the AgUnity app which can track and record a transaction supported by blockchain technology.
AgUnity works with local partner Kopernik, (Kopernik | Kopernik - Finding What Works) one of the prominent Non-Governmental Organizations in Indonesia focusing on reducing poverty in last-mile communities. AgUnity partner with strong local community mobilizers and value chain activists and practitioners to better focus technological delivery. This project is supported by the United Nations Capital Development Fund through Women Enterprise Recovery Fund with the period of 12 months starting in July 2021. Mochamad Dwi Ergiantoro, Senior Analyst in Kopernik, stated that coffee and cocoa farmers in Bali have limited access to selling their commodities. In addition, he highlights the farmers need for transparency around the price of the product.
“The AgUnity app would be very useful for the farmers to have a better bargaining position to the middlemen and to the buyer when the farmers sell their product. Moreover, they can track their income and expense,” said Ergi.
Ergi advises that the coffee farmers know and are willing to produce high-quality coffee, but there is no guarantee that they will get a higher price. Trust and transparency are significant between farmers and buyers.
“There is so much effort from the beginning to produce high-quality coffee, they need assurance of the price since they often do not get the price that they want.” he stated.
Ergi added that he is hoping that the collaboration between AgUnity, Kopernik, the farmers and the village government could enhance local wisdom on agricultural practices. Above all, the digital solution from AgUnity could create a positive impact not only on farmers’ livelihood in Bali but also the villagers in general.
Our baseline survey of smallholder coffee farmers in Bali shows that despite good internet access and strong digital literacy, most of them are not using a smartphone for business operations. It is important to highlight that more than half of the respondents acknowledged having records of transactions could increase trust with middlemen or buyers. Furthermore, three-fourths of respondents recognize the importance of traceability related to coffee and seed qualities, although they admitted being unsure about the purpose. Mika, a young coffee farmer, shared his experience when using the AgUnity app for the first time.
“I found it’s quite easy to use the AgUnity app, perhaps because the young generation gets higher exposure to technology compared to our parents,” said Mika.
Mika also expressed his concern about the coffee farmers in his region having limited access to bigger markets. Consequently, they could not maintain their product quality and there will be a potential loss of income.
“If we have access to a buyer outside our village, probably they could give us the procedure on how to make good quality coffee. If we know the demand of the market, we can improve our product,” said Mika.
Moreover, AgUnity met two female coffee farmers, Wayan and Nyoman, during the field visit to Tabanan, Bali. They have been coffee farmers for decades together with their husbands. They expressed how unfair their work was compared to the money they received. As coffee farmers, they do so many things, from fertilizing, management, harvesting to drying, but they suffer because of the low price of coffee beans.
“Today the coffee beans price is around Rp 2-2.5 million (138-173 USD) per 100 kg. That’s not enough for paying my kids’ school fees, daily expenses, and religious ceremony costs” said Nyoman.
Wayan has also faced the same situation, both of them now selling additional commodities to cover their daily expense, for example, bananas, mangosteen, and durian.
“I hope the AgUnity app could help us to get a fair price.” said Wayan.
The challenges faced by farmers mentioned above are the inspiration for AgUnity to deploy their digital solution. It is believed that by using AgUnity technology, farmers can improve their access to the market, boos their livelihoods and establish ongoing trust between farmers and buyers.