Marketing Basics as Applied to Agroforestry Tree Products...• Closely to Bogor and Jakarta Nanggung farmers have an opportunity to target its market • Farmers are interested in

Joel C. TukanJames M. RoshetkoSuseno BudidarsonoG. Manurung

Venue: Sanur Paradise Plaza HotelSanur, Bali - Indonesia. May 9 - 12, 2006

World Agroforestry Centre (ICRAF) & Winrock International – Bogor, Indonesia

FAO/VREDESEILANDEN Sub-Regional Seminar onEnhancing Capacities of NGOs and Farmer Group to Link Farmers to Market

Market Chain ImprovementMarket Chain Improvement:Marketing Basics as Applied to Marketing Basics as Applied to

AgroforestryAgroforestry Tree Products: Tree Products: Banana markets in West JavaBanana markets in West Java, , IndonesiaIndonesia

West Java

Malaysia

Philiphines

Thailand

WEST JAVAProvince

Bogor District

Bogor City

Linking Farmers to Markets

• Background• Our Contribution• Project Approach

• Lessons Learned

Contents :


Background


Background

• Farmers live on or below the poverty line• Land access less then 1 hectare• Tree gardens products intended for household

consumption with some sales in local market• Tree gardens management is not intensive• Use of agriculture inputs is infrequent

Existing Farmers Conditions

Challenge and OpportunitiesChallenge and Opportunities• Banana hold particularly high potential (the most common and

profitable tree gardens crops in Nanggung• Market demand far exceeds supply• Closely to Bogor and Jakarta Nanggung farmers have an

opportunity to target its market• Farmers are interested in intensifying their tree farming activities

eventhough they are hesitate (not sure where to focus their efforts)• Plenty of opportunity to sell many products in many locations

Agroforestry Innovations and Agroforestry Innovations and Livelihood Enhancement ProgramLivelihood Enhancement ProgramDevelop a replicable and efficient extension approach to improve farmers' tree gardens, both quality andquantity of products, and strengthens farmer’s ability to respond to market opportunities.

• Training workshops for farmer leaders• Extension Follow-up with farmer groups• Market Improvement and Ec. studies

Livelihood enhancement for poverty reduction) &Conservation (empower farmer to improve farm productivity, market linkages)


Core Activities

What are the program Addressed?


ContributionO u r


FarmerInception Workshop

IntroductoryVisits

ProgramSocialization and

Dissemination

Follow Up Activities(Technical AssistancesAnd Material Support)

IdentifyProcess,

Opportunities& constraint

Core Farmer

Workshops

Target Audience

ProgramPartners

ParticipatoryResearch

Core Activities

SupportingActivities

Mini TrainingsFarmers Meeting

Field days Cross Visits

Demo Trials Consultation with Tech. Specialist

Baseline Survey

MArket surveys

Tree Garden inventory

Program Process/Approach

Monitoring & Evaluation(Review All Process)

Legend:

Our Contribution

FARMERS WORKSHOP

4. Farmer Market Linkages

6. Participatory Monitoring and Evaluation

5. Cross Visit to farmer-operated enterprises

1. Species, Problems and Market Prioritization

3. Tree Garden Management

2. Tree Propagation and Nursery Management


ExamplesProject


Project Examples

5. Identifies opportunities to improve the quality and quality of farmers’agroforestry products and expand farmers’ marketing role.

1. Identifies the agroforestry species and products (their specifications,quantities, seasonality, etc) that hold potential for Nanggung farmers

2. Identifies market channels that are used and have potential for farmer products

3. Identifies the marketing problems faced by farmers and market agents

4. Enhances farmers’ understanding of market mechanisms

Marketing Study

A


Project Examples

Can farmers’ roles expanded to achieve higher incomes?

There are a number of methods farmers can undertake to expand their role in marketing channels to secure higher incomes by following recommendations of banana cultivation:

4. Collective marketing - Working together in the farmer groups include with market agent in the mutually relationship

2. Simple management

1. Variety and germplasm selection – use only good quality germplasm of the five banana varieties that have a strong and stead market demand

3. Post-harvest handling – fruit should be harvested based on maturity and specifications. – Harvest immediately before the pre-arranged arrival of collectors/traders

and hung on tripods after harvesting – not stored on the ground for several days. Farmers should also sort and

grade bananas by variety and quality.

Use only good quality germplasm of the five banana varieties.(Ambon/Gross michele, Raja Bulu, Raja Sere, Tanduk and Mas) Demand for these varieties is higher then supply.

The banana varieties planted must be appropriate for the local growing conditions, and for the local market demand.

In the end, the correct variety will maximize the annual revenue per square meter planted.

1. Variety and 1. Variety and germplasmgermplasm selectionselection

D. Remove male flowers;

E. Remove all green leafs that may touch andpotential damage thehanging fruit;

A. Using appropriate spacing

B. Using fertilizerC. Remove grass and

herbaceous weeds

2. Simple Management2. Simple Management

F. Propped the stems withwooden or bamboo poles.

G. Thin bananas to retain only 2-3 stems;

Farmers should also sort and grade bananas by

variety and quality.

Fruit should be harvested based on maturity and specifications provided by market agents

3. Post3. Post--harvest handling harvest handling ––.. Fruit should be harvested immediately ; hung on tripods after harvesting not stored on the ground;

Using plastic crates/cartoon box


Project Examples

TEXTdeliver in bunches by hands

Individual farmers to Collective Marketing

4. Collective Marketing4. Collective Marketing

By forming a group By forming a group and arrange with and arrange with traders weekly or traders weekly or biweekly visits to the biweekly visits to the village to purchase village to purchase bananas in large bananas in large quantities.quantities.

The days of the visits The days of the visits must be premust be pre--arranged arranged and regular.and regular.

Both farmers and the Both farmers and the trader must maintain trader must maintain a tight schedule.a tight schedule.

OPPORTUNITYOPPORTUNITY(Linkage with Banana

Distributor)


MarketVisits

MarketVisits

Meetings &Farms VisitMeetings &Farms Visit

Workshop &MIni TrainingWorkshop &MIni Training

MarketSurveyMarketSurvey

ConsultationTech.SpecialistConsultation

Tech.Specialist

Farmers Demo Trials

Farmers Demo Trials

Project Examples

TEXT

Farmers

TEXT

The activities that The activities that had been done to had been done to Support Farmer Support Farmer Link to MarketLink to Market

Farm and Household Study

Farm and Household Study


MarketVisits

MarketVisits





Tech.Specialist

Farmers Demo TrialsFarmers

Demo Trials

Project Examples

TEXT

Farmers

TEXT

To identify exist market channels,marketing problems, market specifications, market

opportunities and traders willing to work with farm

communities.


MarketVisits

MarketVisits





Tech.Specialist


Demo Trials

Project Examples

Farmers

to enhance farmers' fruit trees/timber trees/annual crops production and post harvest/handling skills.


MarketVisits

MarketVisits





Tech.Specialist


Demo Trials

Project Examples

Farmers

Farmers could gain awareness and experience with marketing and market agents. (Local Market, Regional Market, Supermarket).


MarketVisits

MarketVisits





Tech.Specialist


Demo Trials

Project Examples

Farmers

to identify farmers’ current practices and problems &opportunities


MarketVisits

MarketVisits




ConsultationTechnicalSpecialist

ConsultationTechnicalSpecialist


Demo Trials

Project Examples

TEXT

Farmers

TEXT

To sharing knowledge, skill and experience through technical information, practical that adaptable and applicable for the farmers


MarketVisits

MarketVisits





Tech.Specialist

Farmers Demo Trials

Farmers Demo Trials

Project Examples

FarmersDesigned to demonstrate the advantages of quality germplasm and deliberate management.


Project Examples

Farmers Demonstration Trials (FDTs) (1)

Table 1. Actual activities implemented by farmers

No Activity Percentage of farmers (%)

1. Using appropriate spacing 1002. Utilize recommended varieties (quality germplasm) 1003. Using Fertilizer 894. Circle Weeding 785. Number of stem retained 786. Good harvesting 787. Pest and Disease management 338. Leaf Pruning 229. Drainage 11

Farmer are least focus on 7,8 and 9 because:• farmer are preferred to implement the activities that

do not require a lot cash input (to minimize cost)


Project Examples

FDTs Evaluations (2)

• Fruit weight increase account for 20-25%

•Traders note the quality of banana increase. By adopting the use of plastic crates, its decrease bananas damage from 10% to 3%

• 85% of banana product meet market specificationand can be sold (combination of deliberate tree managementand improve post harvest management –previously only 50-60%was sold)

Price/bunch (Rp)Grade Description

Local market of Nanggung

Regional market and retailer

Bulk sales Pre-program norm for Grade A and B Rp 6,500 Not specified

Grade C*Less the 13 fingers/bunch; uniformity not necessary and a lot of surface stain allowed

Rp 5,600 Not specified

Grade B

13-18 fingers/bunch; limited size difference between rows, minor deformities and minor surface stains allowed

Rp 19,600 Rp 40,000

Grade A18-20 full fingers/bunch; front-row and back-row fingers of equal-size; no surface stains

Rp 22,800 Rp 48.000

Market specifications and average prices for different grades of banana in Nanggung.

Linking Farmers to MarketsDeveloped a ‘new’ innovative market channel

Table 1.

[*] Commercial demand for grade C is very low. These bananas are generally sold in local markets.

Program Examples

previousnew

innovative


LearnedLessons


Lessons Learned

• Without incurring additional direct cost, farmers roughly double the gross income received from their banana crops

• Farmer have assumed the role of collection, sorting and grading; and begun to understand and meet traders’ time requirements

• Traders and their staff is justified by the time saved in dealingwith a ‘group’ of farmers (instead of individuals)

• Improvement in agronomic management are just now have an impact (higher qualities and quantities of banana).

• Use of plastic crates has decreased damage and increased thequality and quantity for banana transported per load

Successful Examples

• Traders have explained market specification and gradingcriteria and offered a price differential


Lessons Learned

5. Develope permanent market linkages.

4. Manage tree gardens to yield tree products that meet market specifications;

2. Focusing on a limited number of species that are appropriatefor local biophysical conditions and have a high marketvalue/demand;

3. Utilizing high quality germplasm (provenance, varieties, etc)to increase productivity and profitability;

Lessons

1. Training workshop series is the foundation of technical assistance provided to program participants, workshop series should be wellorganized


Lessons Learned

Scaling Up

-Develop a better market linkages forsmallholder Rubber Agroforestry inJambi and Sanggau (Funded by CFC)

- Orang Utan Project in Batang Toru,Sumatera (Funded by USAID)

- Local NGOs (Diantanma, WestKalimantan; Yayasan TenanuaWaingapu and YMTM Kefamenanu,East Nusa Tenggara

• Villages within sub district

• Duplicate & Replicate toanother ICRAF projects

Technical practice and monitoring progress in several farmer groups

Technical Facilitator 1

Inter Technical facilitator coordination

Farmer groups 1, Village A

Technical Facilitator 2

Farmer group 2, Village D

Farmer group 1, Village C

Farmer group 2, Village B

Modified from Nugraha, 2005

Farmers/NGOs in others project


TerimaTerima KasihKasih Thank YouThank You

[email protected]

Marketing Basics as Applied to Agroforestry Tree Products...• Closely to Bogor and Jakarta Nanggung farmers have an opportunity to target its market • Farmers are interested in

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