Please Welcome: The Sustainability and Value Added in Agricultural Supply Chains in Indonesia Project (SASCI+)

15 June 2021
Coffee harvesting in Lore Lindu, Indonesia. Cr. @Ismet Khaeruddin/GIZ

As customer becomes increasingly aware of the pressing sustainability issues in global supply chains, multinational enterprises and big brands are expected to ensure that their products are sourced and produced sustainably. At the same time, countries—including Germany and Indonesia—are regulating their markets to ensure more sustainability in agricultural supply chains. Indonesian smallholder farmers face challenges to fulfill the related ecological and social standards to access global markets.

Indonesian agricultural workers make up to 30% of the Indonesian workforce.[1] However, with around 46% of Indonesian families living in poverty depending on agriculture;2  smallholder farmers often fail to generate a living income. One reason is that they obtain a marginal share of value added, leaving them vulnerable to fluctuating commodity prices. With low incomes, farmers are not able to invest in sustainable production methods which hamper productivity of commodities in the mid- and long-term.

Agricultural commodities like coffee, cocoa, natural rubber, palm oil or soybean play an important role for rural development in many developing and emerging countries where they form the basis for the life of millions of households. However, their production and processing are accompanied by numerous ecological, economic and social challenges. Often supplied as unprocessed raw material into global supply chains, limited value is added in producing countries. Many farming households are struggling to meet their basic needs and invest in sustainable production practices. Furthermore, coffee, cocoa, palm oil and soybean are often perceived as drivers of deforestation and forest degradation. With consuming markets and multinational companies strengthening their efforts to eliminate deforestation and human rights abuses from the supply chain, sustainability of raw material is becoming a precondition for market access.

What is SASCI+?
The global program “Sustainability and Value Added in Agricultural Supply Chains” is part of the special initiative “ONE WORLD – No Hunger” (SEWOH). On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the program promotes the sustainability of selected agricultural supply chains in partner countries. In Indonesia, the global program works through the project “Sustainability and Value Added in Agricultural Supply Chains in Indonesia” (SASCI+).

SASCI+ focuses on natural rubber, palm oil, cocoa, and coffee in two biosphere reserves in West Kalimantan (Betung Kerihun Danau Sentarum Kapuas Hulu Biosphere Reserve) and Central Sulawesi (Lore Lindu Biosphere Reserve). In conducting its activities, SASCI+ works together with the Indonesian Ministry of Agriculture as its Political Partner and the Indonesian Ministry of Environment and Forestry as its Implementation Partner. It builds on and complements existing bilateral projects in the target regions.

What are We Aiming For?
By increasing the sustainable production of agricultural commodities and strengthening downstream processing and market linkages, the project aims to increase the farmers’ incomes, safeguard natural resources, and establish sustainable supply chains by 2025. SASCI+ follows a jurisdictional approach trying to align the interest of multiple stakeholders including governments, business, local communities, and NGOs. Coordination among these stakeholders in our working areas contributes towards conservation and sustainability of the supply chain. Through this approach, the project aims to establish long-term market access and security of supply.

For more information, please contact:
Jonas Dallinger, Principal Advisor for SASCI+ in Indonesia