Cinnamon in Kerinci, Sumatra in Indonesia

Cinnamon in Kerinci, Sumatra in Indonesia

Small-scale cinnamon farmers grow organic vegetables to diversify their sources of income.

80 to 85% of cinnamon worldwide comes from the Kerinci region on the Indonesian island of Sumatra. Kerinci cinnamon is known for its unrivalled quality, due to many factors including its high oil percentage. However, the cinnamon subsector in Kerinci is facing a number of sustainability problems. The supply of the product is endangered because 99% of farmers sell the raw, untreated material but do not have enough money for the drying process. The latter is performed by wholesalers.

Although there is enough cinnamon at the moment, in the long term cinnamon is expected to become rarer and could even disappear. As cinnamon is only harvested every 15 to 20 years, it forms just a small part of the farmers’ income. The cinnamon farmers are not organised, so they do not make much profit out of cinnamon cultivation, nor out of the sales, let alone the planting of new cinnamon trees. Often, cinnamon functions as a back-up for unexpected expenses. Many farmers work as contractors for other farmers or the government.

Challenges

  • Dependence solely on the income from cinnamon and on outdoor work
  • Farmers are not properly organised to sell cinnamon or organic vegetables collectively
  • Farmers have limited access to financial resources
  • Business capacity is very low

Our strategies

  • We create a programme for growing organic vegetables (tomatoes, chillies and aubergines) with a good market value. These vegetables can be grown between the cinnamon trees.
  • VECO works together with Mitra Aksi to support the farmers to organise themselves in a farmers’ organisation, develop a business model and strengthen business skills to arrange the collective sale of cinnamon.
  • We support the farmers by setting up an internal control system to meet the market requirements of organic certification.
  • We ask the local government for more support and engage in setting up networks with financial organisations to give farmers easier access to capital.

Organic cinnamon in the process of certification

01/07/2016 12:06

TAKTIK—a farmers organization partner of VECO Indonesia in the region of Kerinci, Jambi—has recently undergone an audit process performed by Control Union on June 14-18 to verify that their cinnamon farms comply with the EU and USDA organic regulations. TAKTIK is now waiting for lab results of some samples. If results are all good, TAKTIK will obtain the certification for organic cinnamon in the next month. Fingers crossed!

Beneficiaries

1020 members (815 men/205 women)

Results achieved

  • 4 extra sources of income in addition to cinnamon: organic vegetables (65%), labour (20%), rice paddy (8%), coffee (7%)
  • VECO successfully facilitated the linking of Taktik and new buyer Agripro Tridaya Nusantara
  • A purchase order between Taktik and Agripro for 22 tons of 8cm stick cinnamon
  • Agripro provided significant amounts of working capital (120,000,000 IDR)
  • Successful price negotiations have led to a better price for the farmers
  • Taktik acquired funding for certification and post-harvest processing equipment from the Ministry of Agriculture
  • 2/3 of farmers are producing organic fertilizer and pesticides; for chilli this has reduced the production cost by 50%
  • 502 members are qualified to join the Internal Control System group for Rainforest Certification
  • Extra work for women as Taktik operators, sorters and packers and 6 young people joined the Taktik board
  • Cinnamon Learning Centre with training modules and field school methods

What do we expect to achieve by 2017?

  • The combination of vegetables and cinnamon trees will provide farmers with food throughout the year. The integrated model of cinnamon and organic vegetables will be lucrative, thus giving farmers extra income.
  • A profitable business relationship will be established for both parties (the farmers and private companies) and a transparent price-information system will be developed.
  • Increased capacity of farmers and their organisations to meet quality standards and provide enough cinnamon to fulfil the market demand.
  • Women tend to be more involved in the cultivation and sale of vegetables, whereas men tend to focus on the cinnamon. We hope that women will play a bigger role in the farmers’ organisation and in the trading organisation.
  • Make sure that farmers gain IDR 60-70 million per farm over 20 years.
  • Extra income from selling organic fertilizer to other farmers not belonging to Taktik.
  • Kerinci’s district government and service providers will have policies that stimulate sustainable and inclusive practices.
  • Up to 353 tons of vegetables produced in 2016.

Long-term results

  • Agripro should inspire other companies to make their sourcing policies more inclusive for small-scale farmers.
  • The cinnamon trade worldwide will be secured thanks to a more sustainable form of production which will be capable of tackling the challenges of climate change and ensuring a fair price for family farmers.

Payment for Ecosystem Services System Curator 

Firman Supratman - firman.supratman [at] vecoindonesia.or.id