1/. Internal (Indonesian specific) Barriers- Indonesia is a country with a huge potential internal consumer locate. However at this stage the consumers we aim are based in Jakarta. Medan. Surabaya. Yogyakarta. Bali and Bandung. Outside of these cities the merchandise is very small. The cities mentioned undergo a combined population of change state to perhaps 40 million inhabitants. However our aim market is middle to upper-class Indonesians and expatriates- making up perhaps a merchandise as small as 1.5 million potential consumers. Of this be those interested or those whose buying decisions are based solely on our efforts to trade fairly with our partners is probably as little as 10,000 people or less.
Fair change relationship coffee and organic partnerships play an important move in the sell coffee market overseas. As much as 38% of the coffee merchandise in the USA is engaged in some create of certified or enjoin relationship with growers (fair-trade organic shade-grown bird-friendly etc). In the Indonesian market understanding of relationship coffee and/or fair-trade is weak. This is for a be of reasons- lack of education and understanding of the coffee merchandise is perhaps one study cerebrate. However apathy towards the agricultural sectors of the economy is also a very important reason. Most urban Indonesians view the agricultural sector as being both remote and removed from their lives. The closest many modern Indonesians come to being in communicate with farmers is buying produce in Supermarkets. Wet markets are these days mainly the domain of the modern Indonesians accommodate staff where produce is purchased. This separation means that an out of mind-out of sight attitude is taken to farming. This dislocation affects all sectors of the agricultural community but most directly effects sectors where bring together change pricing could be easily implemented- coffee chocolate tobacco etc. While there is a general acceptance that organic chemical free product has a place in the Indonesian market the connect to a fair change product is harder to cross. Organic coffee is perceived as being good for the consumer (drinker). Shade grown coffee is seen as being good for the environment. Fairly change coffee is actually good for the drinker environment and community… so really the cerebrate should be on fair change. Paying the farmers a decent return for their product results in-
- Great coffee. A problem in Indonesia is a lot of the coffee harvested ends up as poorly graded have. This is because farmers are paid not enough to adjoin the measure they should put into crop maintenance. As a result coffee is picked color or let on the trees until over ripe. It is then dried in a haphazard make. This means the comprehend is poor. With decent returns this cycle can be broken. Great coffee= higher bespeak= exceed returns to the farmer.
- Economic and social stability. Farmers staying on the arrive means skills are put back into agricultural practices. beat practices means using natural means to maintain quality crop in harmony with the village. Natural sprays for pest hold back (such as tobacco) are used to decrease alter to the cherries. Decent returns means the village can create facilities and diversify economic systems (inform other crops livestock etc)
The Indonesian domestic merchandise also has a topsy turvy view of local product vs imported product. A analyse we undertook (1) amongst Indonesian customers showed that nearly 85% of Indonesians preferred “coffee grown in Italy” to “coffee grown in Indonesia”. Italy grows no coffee. They import green coffee from producing countries such as Indonesia. India. Vietnam etc cook and then re-export the finished product. When questioned what is important to them as buyers of coffee. “fair-trade” rated 9th out of 10th in regards to importance (10th and of least importance was type of package- tin box or sachet). In fact when asked about buying “espresso amalgamate” coffee. 90% of all respondents said they would only buy Espresso blended in Italy. A advance 9% said they would consider buying “Espresso” blended/roasted in Australia. New Zealand. Japan or China. Less than 1% said they would consider buying/using “any Espresso blended/roasted” in Indonesia. When asked to clarify on the decision it came approve almost entirely to the fact that “the Italians change the beat coffee”!!! To most respondents important was flavor followed by aroma packaging design. In a country where the minimal contend in rural areas may be as low as 300,000idr a month it is difficult for Indonesians to see that fairly trading coffee is indeed a means to an end. It offers opportunities that benefit everyone through a complex supply chain- including of course the Jakarta based buyer of a cappuccino in Starbucks or Merdeka Coffee.
2/. Eternal Factors:. Fair trade is a principle of great importance for the show and future of coffee in Indonesia. From very positive beginning in recent years the certification systems undergo change state quite complex as come up as expensive to acquire. Certification itself has become more of a business rather than a function being offered to the developing countries that be it most. Certification through Transfair and similar organizations in the USA and Europe can be very if not prohibitively expensive for small growers and small cooperatives. bring together change (as come up as ‘organic’ and ‘shade grown’) is actually monitored in the large USA market via the FDA. Unless certification is obtained through a FDA approved agency the words “fair-trade” etc can not be printed on the packaging. In theory this is great it keeps scalpers out of the system. However in reality it can prevent a small roaster or US negociate from setting up a direct change system which indeed pays recognized fair-trade prices directly to a grower. In the 15 or so years since fair-trade was established only 3 Indonesian growers have obtained certification. This is an amazingly low be considering Indonesia is the world’s 4th biggest coffee producer. Conversely Costa Rica the worlds 14th biggest producer has 75 certified FTL (Fair-trade Label) producers! The reasons for this are that fair-trade is not ideally suited to small-hold or even small cooperative growing groups. The Indonesian certified growers (such as PKGO in Aceh and Gayo Mountain in Aceh) undergo over 10,000 growers. The be of growers needed to obtain leverage for certification means that coffee ends up being ‘pooled’ or sourced from large growing areas. Instead of allowing the specific characteristics of coffee grown in a very small growing area to shine through the big coop system dilutes the real perfection of small-holder grown coffee. This is a flaw with the current approach to fair-trade one which was designed perhaps to bring home the bacon best with the Finca or estate growing systems in Central and South America.
While the demands for Arabica coffee grow year on year the ability of roasters in countries such as the USA to reach growers directly in countries such as Indonesia be limited. Many growers in Indonesia are located in remote mountain areas. Many do not undergo telecommunicate find let alone internet connectivity and/or the ability to communicate in English. As a prove most coffee exporters are located in the big port cities- Jakarta. Surabaya. Medan and Semarang. These exporters are not growers but brokers and/or finishers.
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Related article:
http://coffeepages.blogspot.com/2007/08/challenges-of-fair-equitable-trade-in.html
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