Phase Two of the International Development Partnership Program on Sustainable Rubber with Continental AG
On 26 January 2022, GIZ’s Sustainability and Value Added in Agricultural Supply Chan in Indonesia (SASCI+) and Continental AG, a major tire producer from Germany, kicked off the second phase of the Integrated Development Partnership with the Private Sector (iDPP) on sustainable rubber in Kapuas Hulu. This program builds on a previously conducted iDPP with Continental AG implemented by GIZ´s Sustainable Agriculture Supply Chain in Indonesia (SASCI) project implemented since 2018. In this second phase lasting from 2021 to 2024, GIZ and Continental AG will work on additional nine sub-districts, bringing the total to 12.
Indonesia is the second-largest natural rubber producer in the world with an annual production of around 3.1 million tons/year from 3.7 million hectares of land (GAPKINDO 2019). Indonesia’s rubber sector is dominated by smallholders with relatively low productivity. The challenges faced by the rubber sector in Kapuas Hulu include the low natural rubber price, low productivity, and the relatively higher attractiveness of other livelihood options (e.g. kratom, palm oil, gold mining, etc.). Theprogram seeks to address thes the outlined challenges by:
- increasing the income of smallholders and the quality of rubber production through training in GAP (Good Agricultural Practices), continuous mentoring, and direct sales to partner companies that supply rubber to Continental AG;
- strengthening the sustainable rubber value chain by providing incentives for good quality rubber with a higher Dry Rubber Content (DRC) through pre-drying;
- strengthening the supply chain through strengthening farm organization, efficient rubber collection system, and ensuring traceability of deforestation-free raw material from farmers’ plantations to Continental company factories; and
- assisting smallholders in obtaining alternative sources of income through crop diversification, as well as through the provision of quality natural rubber planting material for rejuvenation.