Respond for the Market which Controlled by Demand
To make Gayo coffee producers can effectively compete in global market, support programs for the farmers should give bigger attention to basic characteristics of demand and market way aspects.
A complete pilot project has been done by Aceh Coffee Forum in recent times by APED support. The project gives the view of design to strengthen coffee supply chain by market driven approach. This is done by contracts with two consortiums led by Swisscontact and Winrock International. Both were international non government organizations which have enough experience about agriculture development in Indonesia.
That pilot project basic concept is to create direct relation between farmer and exporter by involving farm economic enterprise in coffee market. This arrangement will offer potential advantages for every institution involved.
Best market informants are exporter and foreign buyer who always standby with daily market fluctuations and price movement indication to keep compete with others. They are also in a good position to give any advice to the farmers about the product they need and how to get it.
A direct relation between exporter and farmer by an economic enterprise will short market chain and guarantee the importer and industrialist to get better coffee bean quality as the specification they wished. The enterprise will gain benefit from the more expensive product which next can be enjoyed by its members.
To apply this model, some requirements must be fulfilled. The farmers have to be organized in a farmer cluster institution and directly relate with marketing program of the enterprise. Economic enterprise should be able to organized harvest product collection from its member, make an appropriate processing and manage finance transactions with every buyer and farmer.
In some cases, an organization will be needed to strengthen enterprise capacity to be properly functioned as the first connecting point in supply chain. The organization can also as a government institution, NGO or a contractor that already have an appropriate capacity. Exporter role is also needed to identify foreign buyers, which are industry and importer, and to do expediting and shipping.
Depend on importer’s demand, we need also prepare enterprise institution or farmer cluster certificate as the standard of law certificate authorization institutions. Management is also needed to quick the payment so the farmers don’t need to wait too long.
Most of farmer’ economic enterprise and some exporter have imperfect capacities. Due to it, banks or other finance institutions are needed to give short term credit as work capital during the period when farmers sell their product until they receive the payment from the importer.
The last discussed topic seems not easy, and now, APED is trying to find how to solve the problem.
Even though the result is need to wait, some early indication shows that the pilot project already reached its purpose in giving effective samples of coffee supply chain. This sample is also important in showing that proper basic knowledge about basic relation between supply and demand, humanity value, and investment fund resource in farmer development program will be more effective to reach the target in quality improvement, output enhancement, and farmer family income enrichment.
APED wished it could multiply this model when other source has exist. Temporarily, APED team can accept its existence to establish partnership with other institutions which are interested in this model application, especially government institutions, farmer economic enterprises and other stakeholders. (Hugh Evans-source : Guide Book of Gayo Arabican Coffee)