Public-private partnerships in agriculture: do they work? On the ground experience in Indonesia
I recently had the privilege of observing these partnerships in action when I joined the Partnership for Indonesia’s Sustainable Agriculture (PISAgro) board meeting. The Partnership has been operating for almost five years and has close to 70 partners including local businesses, multinational agribusiness, NGOs, and farmer organizations. PISAgro has become the go-to facilitator for government to meet and collaborate with agribusiness and farmers.
Scaling through experiences on the ground
During the meeting, the 12 Working Groups presented their progress on dairy, beef, cocoa, coffee, soy, corn, rice, horticulture, potatoes, rubber, palm oil and the cross-cutting issue of agricultural finance. Each value chain project is at a different stage of development; some are just starting while others are accelerating. Some are ambitious with far-reaching goals and others have more focused objectives. Most excitingly, however, are those that have been successful in their pilot stage and are ready to go to scale. The presentations highlighted how important lessons are already being learned through experiences on the ground.
Identifying the crucial elements
Partners came together to discuss the most important ingredients for a successful value chain project:
A committed buyer, or offtaker, to identify market opportunities and recognize competitive prices
A strong value chain that helps farmers confidently produce a product volume that is consistent in quality and competitively priced
Access to finance
I was encouraged to see such a diverse group of partners coming together to identify the necessary elements across their Working Groups and value chain projects. Sharing challenges and successes has allowed them to strengthen their cooperation and develop effective programs.
The private sector can only do so much on its own. Companies are limited in the volume of products they require, resources they can commit and the number of farmers they can reach. The consensus is that they must now focus on scaling up. Partners at the meeting identified two viable pathways to scale: inspiring other businesses to build their own projects based on successful pilots, and working with government to embed good farming practices into the national curriculum and existing programs.
The most important question remains: does it work? To measure success, it is vital that field results are measured and recorded. Accurate measurement establishes the credibility of partners and can positively influence engagement and policy.
As an example, Indonesia’s cocoa value chain project has measured its reach to over 60,000 farmers and estimates an aggregated increase to income of US$27,000,000. This means the average increase in profit is US$450 per farmer. To put that in context, the average cocoa farmer in Indonesia earns about US$1,500 per year. An additional $450 per year is equivalent to a 30% increase in their income. This is real achievement and shows what can be achieved through facilitating partnerships aimed at lifting productivity and income while lowering the environmental footprint of farmers.