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SCPP was established as a multi-donor, public-private partnership comprising of the Swiss State Secretariat for Economic Affairs (SECO), public donors and private sector in cocoa industry. SCPP worked with Indonesia’s Ministry of Home Affairs on a national level and local governments at provincial and district level. The USD 55 million program has completed overlapping phases from 2012 to 2020 timeline. SCPP was at its peak having over 300 staff and as such was the largest cocoa related program in Indonesia so far.
The Program aimed to increase the farmer household income from cocoa by 75% and reduce greenhouse gas emissions from the cocoa sector by 30%. The Program facilitated capacity building measures for 165,000 smallholder cocoa farmers in 57 selected districts across 11 cocoa producing provinces. The Program employed an integrated and well-established approach that incorporates: Knowledge and technology transfer on good farming practices; Nutrition and gender integration; Certification and traceability; Integrated agribusiness financing facility; Stakeholder management and networking platforms.
SCPP activities and outcomes contributed to 11 of the UN’s Sustainable Development Goals (SDG), covering the Economic, Social, and Environmental dimensions. The main goal of the program is the reduction of poverty and greenhouse gas emissions in the Indonesian cocoa sector.
A decade after SCPP began, it has accumulated a rich body of knowledge that can feed into the design of follow-up activities and recommendations. Lessons learned during the Program are distilled below.
Sustainability efforts in the cocoa sector in Indonesia can be a benchmark for other commodity sectors. We have learned that sustainability efforts differ across sectors and companies in Indonesia. The learning from SCPP and the cocoa sector in Indonesia can serve as a benchmark for other sectors to emulate.
Private sector corporations are open to new and innovative ways of improving their supply chains. As a result of unsustainable practices, commodity companies are facing similarly pressing issues related to declining supply. Therefore, presenting them with innovative tools and approaches to remove supply chain constraints is needed.
The innovation to provide a one-stop service to smallholder producers should come from large companies; local traders or suppliers cannot bear all the cost or risk, and they are lacking capacity to do this. Sector innovation (including full-service packages to farmers) will need to come from large companies committed to cocoa with in-house farmer outreach programs.
Testing new approaches still requires external or donor support to avoid risk of failure or reluctance for testing. Although companies are interested in trialing new approaches, they have also expressed their resource limitations and a reluctance to invest in testing new interventions.
Integrating commercially viable cases and more inclusive business models into company operations is necessary. It is important to present the business case of the proposed solutions. After piloting or testing stages, companies may need to integrate this into current operations, which often entails changing the way they work. This usually requires further advice on how to scale innovation and integration into the company business process.
Crop diversification to strengthen farmer resilience. Smallholder producers are vulnerable to changes in global commodity prices and harvest failure due to climatic risks. Such volatility is preventing them from investing more resources into their farm, and, in a worst-case scenario, leads them to convert their cocoa plantation into other cash crops. Therefore, a polyculture model could be introduced as a risk diversification strategy for farmers.
Plantation commodities and the landscapes in which they are embedded are critical for economic, social, and environmental development in Indonesia. Unfortunately, Indonesia’s commodity value chains are still constrained by low competitiveness and adverse market conditions. In the last five years, productivity has stagnated or declined for Indonesia’s primary plantation crops.
Smallholder farmers’ pathway to improve farm yield and profitability is also not easy. They lack access to high-quality inputs and information on best practices for production, harvesting and post-harvest handling. All these indicate the absence, weakness or inefficiency of the supporting functions surrounding these commodity supply chains. Commodity companies, on the other hand, are facing difficulties in upgrading the performance of their smallholder-based supply chains. It remains a daunting task to increase innovation adoption amongst smallholder farmers.
Building on key lessons, models, tools and approaches developed in SCPP, Swisscontact continues working together with leading companies in cocoa and other plantation sectors, such as coffee, rubber, coconut and palm oil, to tackle sustainability challenges. Swisscontact provides technical advisory services to help commodity companies develop more competitive, inclusive, green and resilient supply chains. We assist commodity firms to develop and pilot new farmer engagement, supporting models that are fully integrated into their commercial supply chains and profitable for all parties.