A new public-private project called the Indonesia Coffee Enterprise Resilience Initiative will provide credit and training to support smallholder farms in the archipelago. The effort is a collaboration between U.S. beverage manufacturer and distributor Keurig Dr Pepper, impact investor Root Capital, and the United States Agency for International Development (USAID).
Small farms, typically just 1 or 2 hectares, produce 99% of Indonesia's coffee crop; the nation has some 1.3 million coffee farms, according to information compiled by World Coffee Research.
Yet many smallholders lack access to credit. The three-year Indonesia Coffee Enterprise Resilience Initiative will expand the availability of financing while implementing digital solutions to help famers improve their business management.
"A lack of business management skills and access to credit impedes coffee enterprises from harnessing farmers’ full potential for growth,” said Jeff Cohen, mission director of USAID Indonesia.
The project will support 14 coffee enterprises working with 14,000 smallholder coffee farmers in Aceh, East Java, and Sumatra. It will also advance gender equity and climate action.
USAID operates international development programs and disaster recovery support. The agency’s Indonesia team will use its local experience to support the initiative.
Root Capital is a non-profit founded in 1999 that helps farming communities in Africa, South America, and Southeast Asia access resources for sustainable economic development.
“Root Capital has been a long-time believer in public-private partnerships to tackle the intersecting challenges facing our world,” said Willy Foote, Root Capital founder and CEO.
The initiative’s three partners have previously worked together on other efforts. For example, Root Capital, Keurig Dr Pepper, and USAID teamed up with the private foundation Ezrah Charitable Trust in 2020 on a sustainable supply chain project. That broader initiative, the Partnership for Sustainable Supply Chains, focused on providing financial and advisory support to 150,000 farmers in Africa, Latin America, and Indonesia.
Other organizations have tackled sustainability and farm-level support in Indonesia. For example, the Global Coffee Platform, an association promoting sustainability in the industry, has a presence in Indonesia. The Sustainable Coffee Platform of Indonesia (SCOPI), established in 2015, provides farmers with technical training and education. SCOPI has 44 members, including names like JDE Peet’s, Nestlé, the World Wildlife Fund, and Fairtrade International.
The Indonesian coffee industry expects strong demand and a large crop in the 2022/2023 marketing year. Production is forecast at 11.35 million 60-kilogram bags, up 7% from the preceding year. Green bean exports are expected to be 6.5 million bags, according to the United States Department of Agriculture Foreign Agricultural Service.