SCPP Bi Annual Report 2015

Sustainable CocoaProduction Program IndonesiaBi-Annual Report 2015 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 1

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Table of Content 4 4Program Background 6Timeline 8Cluster MapHolistic Approach 10Program Results until June 2015 10Measuring Program Impact 11Program Outcome Monitoring 12Outcome on Farm Rehabilitation 13Nutrition Program Outcome 14Key Program OutputsFarming Good Practices and Technology Transfer Systems 17Master Trainings for Staff and Extension Officers 17Cocoa Farmer Trainings 18Cocoa Farming & Greenhouse Gas Emissions 19Nutrition and Gender Sensitivity IntegrationGood Nutrition Practices Trainings 21Engaging Women in SCPP 21Farmer Organization, Market Access and Certification 23Farmer Groups and OrganizationsSmallholders Farm Certification 25ICT for Certification and Traceability 25Integrated Agribusiness Financing Facility (AFF) 26Financial Literacy Trainings 27Collaboration with Financial InstitutionsCooperative Strengthening 29Stakeholder Management and Networking Platforms 29Role and Contribution of Governments 29Conclusions 31 33 33 34Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 3

Program BackgroundTimeline PEKA STMF - IDH SCPP - SECO CPQP 1 - IDH GNP - EKN CPQP 2 - IDH2010 2011 2012 2013SCPP targets as one of the main objectives to reduce to quality farm inputs, and a high incident of pest andthe poverty level of 98,000 families of cocoa farmers disease infestation.by 2018, with further expansion planned until 2020.The Program design is over several funding phases, The Sustainable Cocoa Production Program (SCPP) is awith 31 funding expansion planned until 2020, large public-private partnership between Swisscontactreaching 130,000 and implementing contracts es- and the Swiss State Secretariat for Economic Affairstablished so far for the period from 2012 to 2018. (SECO), the Sustainable Trade Initiative (IDH), the Embassy of the Kingdom of the Netherlands (EKN),The Indonesian cocoa sector provides opportunities the International Fund for Agricultural Developmentfor farmers to improve their livelihood. This is in (IFAD), and the Millennium Challenge Account-In-line with Joko Widodo administration’s goal to make donesia (MCA-I). At national level SCPP works withIndonesia the largest cocoa production country in the the Indonesian Ministry of Home Affairs, while forworld. Nevertheless, the sector faces a number of partnerships with private sector companies the Pro-challenges, which affect the cocoa production. Small gram is currently collaborating with ADM Cocoa, Barryfarm sizes, low productivity, lack of access to formal Callebaut, BT Cocoa, Cargill Cocoa and Chocolate, Ecom,finance, and competition from other crops are some Mars Inc., Mondeléz International, and Nestlé. Each ofof the challenges encountered. The challenges can be the SCPP operational regions has a slight variation intraced back to many factors such as lack of cultivation market-related interventions, which depends on theexpertise, unproductive and aging trees, limited access private sector partners’ support and infrastructure.4 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015

Phase 2 AFF-SECO2014 2015 READ-IFAD 2017 2018 GP-SCPP MCA-I 2016 SCPP started on January 1, 2012 as a continuation of of the GP-SCPP Consortium – signed an agreement the Economic Development Financing Facility Project with MCA-Indonesia Green Prosperity to add additional (PEKA) in Aceh. During the planning phase with SECO, districts. The total number of districts increased from several private sector companies expressed their inter- 19 to 29 and adds with East Nusa Tenggara one more est to work with Swisscontact in Sulawesi, which led province to SCPP’s umbrella. Through the Consortium, to the inclusion of IDH as additional funding partner SCPP is also partnering with the Belgium NGO Vre- to SECO. When the Program started, three companies desEilanden (VECO) and the World Cocoa Foundation have joined SCPP under the IDH component in Sulawe- (WCF) in the implementation of the Green Prosperity si. In December 2012, EKN joined the Program with component. the Good Nutrition Practices (GNP) modules, adding huge value to the Program’s activities to improve The Program, among others, offers cocoa farmer field farmers’ livelihood. In March 2014, SECO expanded its school trainings, builds the capacity of farmer organi- commitment in SCPP with the Agribusiness Financing zations and cooperatives, promotes the establishment Facility (AFF) component. of superior clone nurseries, creates transparency in a sustainable supply chain, provides access to local fi- In January 2015, the Program welcomed IFAD to work nancial service providers, improves the nutrition intake with SCPP implementation in five districts in Central of the cocoa farming families, and reduces greenhouse Sulawesi as part of the READ program bridging onto gas emission in the cocoa sector. the next phase. In March 2015, Swisscontact – as part Kementerian Dalam Negeri Republik Indonesia Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 5

23 26 1 27 4 5 Aceh Central Sulawesi Ma Po M 10 11 Sou 9 12 14 13West Sumatera East Nus Cluster Map West Sulawesi 7 Provinces29 Districts 8 Private Sector Partners6 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015

27 24 26 2825 29Investing in rural people Central Sulawesi South-East Sulawesi 22 23 Toli-Toli 29 Buol 28 27 26 25 Banggai 10 19 21 East Luwu South-East Sulawesi Luwu 20 24 North Kolaka amasa 11 18 20 olewali 23East Kolaka 19Mandar 12 22 21 17 18 Sikka 16 East Flores 15uthwest 13 14 Sumba Ende15 16 17sa Tenggara South Sulawesi South Sulawesi Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 7

Holistic Approach8 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015

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Program Resultsuntil June 2015Measuring Program ImpactSCPP uses the latest update of Progress out tion, this number has already dropped to 56%.of the Poverty Index (PPI) developed by the The situation is traditionally the most critical inGrameen Foundation and recommended by the West Sulawesi where every fifth household isCommittee on Sustainability Assessment (COSA). classified as poor.By collecting data using simple questionnaires,SCPP estimates the cocoa farmer household’s In most parts of the world, cocoa farming islikelihood of having an income per household often linked with poverty. SCPP believes thatmember per day below the national poverty line its holistic approach will contribute to move the(7,893 IDR/day) and two international poverty cocoa farming households from the poor to thelines of 1.25 USD/day or 2.50 USD/day. vulnerable category and finally out of the pover- ty circle in four years after the intervention.Using a different categorization, the farmers liv-ing below the national or 1.25 USD/day poverty Over the course of the implementation, SCPPline are considered as poor whereas the ones regularly collects data from at least 10% partic-living between the national and 2.5 USD/day ipating farmers for post-line survey to measureline are classified as extremely vulnerable. changes including income increase. As per dataBefore joining the Program (farmers have been available until June 30th, 2015 around 33%joining the Program continuously since PEKA of the assisted farmers, amounting to 19,875start in Aceh 2010), more than 63% of the farm- households, have increased their income by aters’ households were in an extremely vulnerable least 75%.condition. One year after the program interven- Aceh West South Central Southeast West SCPP Sulawesi Sulawesi Sulawesi Sulawesi Sumatera Total 20% 18%Poverty Rate - 1.25$/day 16% 14% 12% 10% 8% 6% 4% 2% 0% Baseline 1.25$/day Post-line 1.25$/day10 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015

Program Outcome MonitoringMost cocoa farmers started to plant cocoa in the in learning centers, they regain motivation and1990s during the Indonesian cocoa boom. Since start maintaining their old farms thus increasethen not many of the trees have been replanted, again their yields and with it their income.therefore the age of the trees is one of the big-gest issues in cocoa production. Old trees attract SCPP is continuously monitoring its approach andmore pests and diseases and if not regenerated its effect on the farming practices and farm-or replanted, the farmers’ income from cocoa ers’ livelihood by frequent visits and constantdrops significantly. With only applying GAP, data collection. Until June 2015, the Programnamed farm rehabilitation, yields at the younger has collected rolling baseline data from all thecocoa farms can be already improved signifi- trained farmers and post-line data from morecantly, whereas at the older farms replanting than 10,000 farmers (18% sample). The data areand/or side or top-grafting is recommended analyzed on a regular basis to provide insight on(regeneration). With increased yields farmers farmers’ changing practices and strategies andearn better income thus provide better education often shared with partners or public.for their children and more job opportunities aregenerated. One of the results shows increased farmers’ productivity to 699 kg/ha/year. These data areWhen monitoring the outcomes, SCPP realizes from farm surveys that were conducted at leasthow important the technical assistance and one year after the first support, compared tofollow up after the trainings are to make the overall baseline data of 450 kg/ha/year, collect-Program effective. Farmers often still hesitate ed from farm evaluations before farmers joinedto replant their farms with new and improved training activities. As per now, SCPP promotionplanting material. But if encouraged by field staff of sustainable cocoa production has resulted inand other farmers’ successes and examples seen among others, a productivity increase of 55.3%. Aceh West South Central Southeast West SCPP Sulawesi Sulawesi Sulawesi Sulawesi Sumatera TotalKg/Hectare/Year 900 800 700 600 500 400 300 200 100 0 Baseline Post-Line Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 11

Outcome on Farm RehabilitationThis bi-annual report also updates as per June 7,319 hectares regenerated: Total hectare of2015 on cumulative outcome indicators from the farms where old or/and less productive treesfarmer capacity building in cocoa Good Agricul- were side or top grafted with improved plantingture Practices. Measuring farmer adoption of material to rejuvenate the farm thus to ensureimproved technologies remains a key challenge improved and sustainable yields. As reportedwithin the cocoa sector. Alignment with industry previously, monitoring for this indicator is con-partners and associations is an ongoing task to ducted on ongoing basis. Surveyed farmers haveensure we have credible and feasible method- already side-grafted an average of 80 cacaoologies in place on evaluating individual farm trees (or averaging 10% of the farms) based onimprovements. So far, we are reporting GAP out- SCPP post-line data.comes with measuring three indicators related tofarm rehabilitation, regeneration, and replanting, 9,036 hectares rehabilitated: Total hectare ofwith results as follows: farms where good agricultural practices have been successfully applied to improve productivity1,337 hectares replanted: Total hectare of and soil fertility. For this indicator the Programfarms where so far 1.25 million cacao seed- counts all farms which produce at least 750 kg/lings, produced in the 370 Program supported ha/year with the assumption that the farmersnurseries, are planted as replacements for old have rehabilitated their farms through the appli-and diseased unproductive trees. The nurseries cation of better agriculture practices and addedhave reached a capacity to produce annually 1.1 organic material. Further yield increases aremillion cacao seedlings, but production, distribu- possible on good managed farms with improvedtion, and planting of these seedlings still lacks planting material and agro-inputs. Farm rehabil-behind the potential. itation needs to be performed by all supported farmers to achieve the overall Program target of 1,000 kg/ha/year. Aceh West South Central Southeast West Sulawesi Sulawesi Sulawesi Sulawesi Sumatera16,000 Target Result Target Result Target Result Target Result Target Result Target Result14,00012,00010,000 8,000 6,000 4,000 2,000 0 Rehabilitated Replanted Regenerated12 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015

Nutrition Program OutcomeThe Program has been utilizing the Individual As per chart below, since the beginning of theDietary Diversity Score (IDDS) to reflect the GNP component in 2013, the IDDS increased onwomen’s nutrient adequacy in cocoa farming average by 16% (meaning by one more IDDShouseholds. By collecting the IDDS, The Program food group consumed).is able to assess changes in women’s diet beforeand after the GNP training to gauge improve- Despite of IDDS currently being used in manyment expected in dietary intake. areas of the world to measure dietary intake, it is not yet possible to compare the results withTo do so, the Program sums the number of other projects and countries due to differentnine food groups consumed by the individual groupings of the foods thus score range, smallrespondent over the 24-hour recall period. The samples, and its common seasonality (variationsProgram remained cautious when collecting the in rainy and dry seasons often bring differentbaseline and post-line IDDS data due to in some results).areas there is an increasingly common practiceto consume meals and snacks outside the homesuch as in traditional occasions around thevillage. This has significantly created higher IDDSfrom the respondents. West South * Sulawesi Sulawesi Central Southeast West SCPP Aceh Sulawesi Sulawesi Sumatera Total7.06.05.0IDDS Score4.0 N/A3.02.01.00.0 Baseline IDDS Post-Line IDDS * In Central Sulawesi, GNP training is started in the 1st semester of 2015 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 13

Key Program OutputsBesides the main outcome numbers, the Program has reached the following cumulative key outputnumbers until the end of June 2015:53,386 smallholder cocoa farmers were in 1,747 CPG in total. Towards the end of 2015,trained on average 8 days through Farmer Field the program will be working to achieve the over-Schools (FFS) in Good Agricultural Practices all target to facilitate the establishment of 2,000(GAP), post-harvest handling, professional farm CPG across the implementation areas.management, nursery management, and certifi-cation, including 18.6% women participation. Output achievement to date is 87%. Output achievement to date is 89%. 370 nurseries for planting materials have an installed production capacity of 1.1 million high29,126 households (one member of the quality seedlings and approximatively 370,000family) of smallholder cocoa farmers were cacao seedlings were produced and distributed/trained in Good Nutrition Practices (GNP) with planted in the first half of 2015 across Sumatra79.6% women participation. The trainings were and Sulawesi.conducted for 3 days: 2 days directly after theGAP FFS and 1 day self-organized by the groups Output achievement in Nursery establish-during the harvesting period of the produce a ment/support to date is 74%.few weeks after the first training sessions. 3 producer organizations/cooperatives were Output achievement to date is 73%. newly supported in the 1st semester 2015, resulting to 15 in total since Program start. 13After GAP and GNP trainings, 14,055 selected Business Models for cooperatives are developed,members of smallholder cocoa farmer house- including certification holding, cocoa bean trade,holds received capacity building through finan- fertilizer retail business and others.cial literacy trainings in Good Financial Practices(GFP) with 51.8% women participation. Output achievement to date is 50%. Output achievement to date is 47%. 10,872 cocoa producers are currently certi- fied for the 2015 cocoa season by voluntary677 extension officers (agriculture, nutrition, standards of UTZ Certified in Aceh and Southeastand finance) from private sector and govern- Sulawesi and Rainforest Alliance label in Southment agencies participated in SCPP’s training to Sulawesi. One cooperative in Kolaka Timur,become master trainers. Southeast Sulawesi distributed as certification holder IDR 2.4 billion (ca. USD 200,000) to farm- Output achievement to date is 85%. ers and capitalized itself with IDR 570 million .256 Cocoa Producer Groups (CPG) were newly Output achievement to date is 54%.established in the 1st semester 2015, resulting14 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015

53,386 18.6% 29,126 79.6% 14,055 51.8% Smallholder Women Households Women Selected mem- Womencocoa farmers participation (one member participation bers of smallhold- participationwere trained on of the family) er cocoa farmeraverage 8 days in Good of smallholder in Good in Goodthrough Farmer Agricultural cocoa farmers Nutrition households Financial Field Schools Practices were trained in Practices received capacity Practices Good Nutrition (GNP) building through (FFS) (GAP) financial literacy (GFP) Practices trainings in Good (GNP) Financial Practices (GFP)677 256 370 1.1 million 15 10,872 Extension Cocoa Nurseries for Installed Producer Cocoaofficers (agricul- Producer planting capacity for organiza- producers ture, nutrition, Groups material high quality tions and are currently (CPG) were cooperatives certified for and finance) established cacao providing the 2015 from private newly seedlings services to sector and established their mem- cocoa government season in the 1st bers agencies semester participated inSCPP’s training 2015 to becomemaster trainers Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 15

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Farming Good Practices& Technology Transfer SystemsMaster Trainings for Staff and Extension OfficersSCPP periodically provides Master Trainings for private sector and SCPP field staff (Field Facilitators,Field Coordinators and Interns) and extension officers. The purpose of the Master Training is to equipthem with knowledge and facilitation skills so that they can play their role during Farmer FieldSchools. Extension officers are government officers who execute SCPP trainings while Field Facilitatorsand Coordinators facilitate and supervise the Farmer Field School. SCPP attempts to ensure that alasting knowledge and skill transfer to farmers beyond the program implementation period occurs. Inaddition to that, engaging government extension staff is part of SCPP’s lobbying efforts to encouragethe government to adopt the modules hence the sustainability of the program.During Master Training participants learn the good agriculture techniques, the management of nurs-ery, how to evaluate a cocoa farm, the techniques of assisting cocoa farmer groups and others. In the1st semester of 2015 SCPP has executed 32 Master Trainings: 9 in GAP, 8 in GFP, 9 in GNP, 2 in Groupand Cooperative Development, 2 in ICS, Traceability and Certification, and 2 in Post-Harvest and Mar-ket Access Training of Trainers. Aside from technical skills, the field staff and extension officers learnto work together and share experiences. Monitoring from the field showed that participants of theToTs (Training of Trainers) found the Master Trainings very helpful. Especially field staff who initiallylacked confidence to facilitate FFS gain confidence to facilitate farmer training in technical matters.In the first semester of 2015, SCPP has trained 164 master trainers with 145 of them were govern-ment officers and 19 private sector staffs. The master trainers collaborate with Program Field Facilita-tors to assist farmers during farmer field school. Extension Staff Trained Annually Cumulative 2015 2012 - 2015 Target Result Target Result800700 155 52600500400300 645 625 Private Public200 15 19 145100 0 119Findings from the field indicate that one major challenge to the extension officers is how to teachfarmers who do not know how to read or write. In the Master Trainings, the extension officers andfield staff from the private sector can learn how to teach and facilitate such farmers. Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 17

Cocoa Farmer Number of Key Farmers in ToT modulesTrainings GAP Good GFP Good GNP Good Group and ICS, Post-Harvest Agriculture Financial Nutrition Cooperative Traceability and MarketDelivering farmer trainings remains a focus of the Practices Practices Practices DevelopmentProgram. As 2015 is the final year of SCPP phase 1, and Accessthe Program works to ensure target achievements Certificationin the implementation areas. In addition to Mas-ter Trainings, SCPP also provides trainings for key 400farmers (KF) so that they can better prepare beforeFFS begins. During the reporting period, the Program 350has executed Training of Trainers (ToT) of GAP, GFP, 17GNP, Post-Harvest and Market Access and Group, ICS,and Cooperative Development. Chart 4 on the right 300shows the number of key farmers involved in eachToT during the 1st semester of 2015. As of the 30th 250 Femaleof June 2015, 694 newly selected key farmers 200 257 Malehave been trained with 35% of them being femalekey farmers. After the key farmers are trained, they 150 324will be executing FFS together with extension offi-cers and field staffs. 100 76 7 15 50 69 94 13 66 89 0 49The FFS are conducted following the KF training. In GAP Participantsthe reporting period, 7,376 farmers in total (includ-ing KFs) were trained in GAP. This brings the total Annually Cumulativenumber of cocoa farmers who received training 2015 2012 - 2015from SCPP since the beginning of the Program untilthe first semester of 2015 to 53,386 farmers (with Target Result Target Result18.6% female participants). Since the beginning ofthe program in 2012, 427,712 training days in GAP 60,000 12,000 9,934have occurred across all implementation areas. In 50,000average, a farmer receives 8 training days in GAP 40,000 48,000 43,452 Femalemodules. The farmers received 7-10 days training in 30,000 Malevarious modules such as pruning, soil fertility and 20,000fertilizing, integrated pest and disease manage- 10,000 2,590 1,176ment, harvesting and sanitation, post-harvest prac- 10,360 6,191tices and quality (sorting, fermenting, and drying) 0and pesticides management.18 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015

Cocoa Farming & Greenhouse Gas Emissions Greenhouse Gas (GHG) emissions from agricul- while the organic fertilizer use (compost, ma- ture activities are significant drivers of the global nure, granules) was recorded at around 143 kg/ climate change. In line with this issue, SCPP and ha in average. Our data (based on baseline from its partners aim to minimize the rate of GHG 54,000 farmers) show that the baseline average emissions in cocoa sector through Good Agricul- emission of CO2 equivalent is 1.02 tCO2eq/ ture Practices (GAP) and new Good Environment MT cocoa produced. If compared to every MT Practices (GEP). Nitrogen oxide – as one of the of crude palm oil produced, this figure is similar largest GHG emitter in cocoa sector – is expected (1.03 tCO2eq/MT ). Nevertheless, when calcu- to increase due to cocoa’s intensification mainly lated per hectare, taking average smallholder from fertilizer. yields into account, the effect of cocoa farming clearly shows 8.8 times lower GHG emissions As a leader in the PISAgro Cocoa Working Group, of 0.44 tCO2eq/ha compared to oil palm with SCPP commits to develop a methodology for 3.88 tCO2eq/hectare. measuring and monitoring GHG emissions within the cocoa intensification. SCPP intends to When comparing the baseline and post line data, integrate targets for monitoring and mitigation total GHG emission reduction, if applied to the of GHG emissions in its program activities and 54,000 farmers, currently amounts to 3,565 tCO- monitoring plan to increase its positive environ- 2eq per year. Such amount of CO2eq equals to mental impact. taking 120,000 cars off the road, which would drive an average of 20,000 km a year each or SCPP implements a holistic approach for sustain- avoiding 2,187 round-trip flights from Zurich to able, environment-friendly agricultural practices. Jakarta. The ultimate goal is to reduce GHG emissions1 Equivalent CO2 (CO2e) is and increase carbon sequestration. The Program The average content of organic carbon is 0.24the concentration of CO2 that has been estimating and quantifying GHG emis- tc/MT cacao trees (carbon sequestration). SCPPwould cause the same level of sion from cocoa intensification through baseline is currently in process of researching a formularadiative forcing as a given type and post-line surveys. Based on the data until for calculation the carbon sequestration alsoand concentration of green- the end of June 2015, in total 3,273,714 shade from the shade trees. The Program has beenhouse gas. Examples of such trees such as other estate crops, hard woods, actively involved in climate change mitigationgreenhouse gases are methane, fruit, and N-fixing trees are planted in SCPP co- of reducing GHG emission through modules inperfluorocarbons, and nitrous coa farms resulting in average of 65 shade trees FFS. A number of agricultural approaches such asoxide (Source: Wikipedia August per farm securing higher biodiversity, carbon pruning, planting shade trees, reducing excessive4, 2015). sequestration, more variable income and better chemical fertilizer use, proper soil, water man- food security. agement, or combining the usage of chemical2 C´ecile Bessou, Laurence and organic fertilizer are efficient and effectiveChase, Ian Henson, Amir F.N. The utilization of chemical fertilizer also signifi- techniques to reduce the GHG emissions andAbdul-Manan, Lloren¸c Mil`a- cantly increases GHG emissions from nitrogen increase carbon stock in cocoa farms. Moreover,I-Canals, et al. Palm GHG, the oxide (Equivalent carbon dioxide). Until the end new modules on Good Environmental PracticesRSPO greenhouse gas calculator of the reporting period, in SCPP participating to raise even more awareness on the importancefor oil palm products. 8th Inter- farmers used in average around 229 kg/ha of of the environment among cocoa farmers arenational Conference on LCA in chemical fertilizers (Urea, ZA, TSP, NPK, KCl), being developed at the moment.the Agri-Food Sector, Oct 2012,Saint-Malo, France. pp.498-504, Farms Surveys tCO2e/Farm tCO2e Reduction in tCO2e2012 54,000 Baseline 680 36,746 3,565 Post-Line 614 33,181 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 19

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Nutrition & GenderSensitivity IntegrationGood Nutrition Practices TrainingsThe poor nutritional status of farmers and their households members is still an issue, which influ-ences rural communities in Indonesia including cocoa-growing regions. The lack of knowledge onbalanced diet and proper feeding of children affects current and future household’s health, thusproductivity and often leads to higher poverty level.Malnutrition of children is not always a matter of availability of food but sometimes also a choiceof the mothers to feed the children instead of nutritious food with any low nutritious one such asinstant noodles or chips. A combination of lack of knowledge on balanced nutrition importance andpoor discipline often leads to children’s malnourishment even outside the poorest households. SCPP isaddressing this issue by stressing the importance of well-fed children and reminding the householdson the effects of malnutrition.The ongoing monitoring provides deeper view into the food intake choices and feeding habits ofSCPP households and continuously serves to improve the trainings in order to be more effective. Asreported previously, farmers reduce their expenses on food by intercropping and home-gardening,increase their income by selling the surplus’ vegetables and improving their nutrition intake. How-ever, the sustainability of keeping the nutritious vegetables’ gardens remains a challenge as farmersprovided by hybrid seeds that cannot be propagated further, often stop maintaining their gardensafter the first harvesting. SCPP has learned and in order to overcome this and other issues, newlearning materials such as flipcharts have been designed and used in FFS and new training modulessuch as local nutritious vegetables’ seeds conservation and propagation and fish pond’s managementto improve protein intake in highland areas are being developed.During the reporting period, the Program continued the effort to reach 40,000 households in pro-viding capacity building for smallholder cocoa farmer households on nutrition and better dietaryintake. This semester, the Program expanded the training activities to Luwu, East Luwu, and NorthLuwu districts in South Sulawesi (in partnership with Mars Inc.), and Parigi Moutong district in CentralSulawesi (in partnership with Ecom). All SCPP implementation areas already had the GNP Trainingimplemented. GNP Participants Annually Cumulative 2015 2012 - 2015 Target Result Target Result40,00035,00030,00025,000 32,00020,00015,000 2,400 23,195 Female10,000 9,600 Male 5,000 1,526 8,000 5,931 0 5,806In the first half of 2015, the Program has trained 7,332 household members in the GNP trainingwith 79% women attendance. This brings the total number of GNP training participants since thenutrition component started in December 2012 to 29,126 households or 73% of the targeted number.The accumulated training days until June 2015 have reached 16,836, which brings the total numberto 62,025 training days since the beginning of the Program. Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 21

For Swisscontact, gender inclusion is key for program success. 29% of management and staff posi- tions are held by women, ensuring gender integration on program level. Overall women participation in key SCPP trainings reached 43% by the end of June 2015. Gender in Program Participants Gender in Program Sta GAP GNP GFP CLT Managers Officers Assistants/ Field Staff60,000 7,283 6,772 20050,000 18040,000 9,934 160 62 140 12030,000 100 Female Male20,000 43,461 8010,000 23,195 Female 60 123 0 5,931 Male 40 4 17 8 12 23 20 3 022 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015

Engaging Women in SCPPSCPP acknowledges that women are also center-stage in cocoa farming and therefore it has beendesigned to integrate women across all activities. Nonetheless, in most areas in Indonesia where thepatriarchal culture is one of the social belief, women’s contribution is often being challenged. TheProgram thus tries to see four aspects that contribute to the increased scale of women engagementin SCPP i.e. access, participation, control and benefit:Access Participation Control BenefitBeing aware that In line with the above At group level, the The Program is alsoagriculture in Indone- mechanism, SCPP is Program urges wom- aware of the multiplesia is often perceived consistently putting the en’s significant role benefits of engagingas male-dominated effort to involve wom- in the farmer groups males into typicallysector, the Program en in the training ac- such as the group female’s activities suchsees the importance to tivities; targeting 20% head, treasury, and as food preparation.provide equal oppor- women participants secretary. In 2015 In predominantlytunity for women to in GAP trainings, 80% SCPP successfully in- male led householdshave increased access in GNP trainings, and cluded 33% women in the involvement ofto the sector. Hence 50% in GFP trainings. Key Farmers trainings. men in GNP trainingsin group formation In the first half of 2015, Moreover, until June (until June 2015 20%)activity, SCPP encour- women participation 2015, around 6.25% often results in betterages women mem- reached 16% across of women have been understanding of thebership in the group 7,367 GAP participants, holding leadership importance of betteras well as women which include training positions in their re- and balanced nutritionleadership. Further- for master trainers, spective farmer orga- for the whole familymore, to provide an extension officer, and nization including 28% and allows the femaleequal opportunity for farmers. While from of women becoming family memberswomen and men, the the 7,332 GNP training Head of CPG (Cocoa to spend more onProgram prerequisite and 10,859 GFP Producer Group). This healthy foods byat least 30% women training participants, creates prominent changing the feedingrespondents in the women participation avenue for women’s habits as necessary.post-line; reached 79% and 53% voice to be heard and respectively. Based on women’s participation the targeted number, in the control function the Program is on track during decision-mak- and has been able to ing process in their promote women’s in- communities; volvement throughout the program activities at individual level, within participating smallholder cocoa farmer households; Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 23

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Farmer Organization,Market Access & CertificationFarmer Groups and OrganizationsSCPP works with Cocoa Producer Groups (CPG) and strengthens farmer organizations. In Indonesia,farmers are generally not organized, leading to, among others, inefficient access to and adoption oftechnical assistance provided. Many groups were established to get funding from the government,as this is usually a requirement to access government’s support. For SCPP farmer organizations thefirst and foremost step is efficient farmer’s capacity building and emancipation of farmers in engag-ing with the industry. The Program training packages were designed to build group cohesiveness toenable better collaboration between farmers in the group.Between January and June 2015, the Program has facilitated the establishment of 256 new CPGsin Sulawesi and Sumatra. Since the Program started in 2012, the Program has registered a total of1,747 CPGs, or around 87% of the overall Program target. Supported Cocoa Producer Groups Annually Cumulative 2015 2012 - 2015 Target Result Target Result2,000 2,0001,8001,600 1,7471,4001,200 423 2561,000 800 600 400 200 0The Program has been supporting farmer organizations at district level to provide additional bene-fits to their members. Efforts towards this direction have been initiated since last year but until June2015, progress was still at a very early stage.Until the end of the reporting period, the Program concluded that more focused support is needed toimprove the farmer organization capacity to the level that SCPP expected. The Program is currentlyworking to also establish a manual for farmer organization development. Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 25

Smallholders FarmCertificationSCPP trusts that certified and traceable cocoa Benefits of certification for smallholderis one of the paths to further strengthen cocoa cocoa farmers include direct benefits suchproduction and make it sustainable. The Program as premiums paid and diffused benefitsbelieves that farmers’ willingness to participate such as conservation of ecosystems, in-in the certification process is a determining creased farm yield, employment opportu-factor to the success of the certification process. nities and improved labor conditionsDespite the fact that farmers are sitting at thevery end of the verification and certificationchain, their contribution is fundamental to theoverall certification process.Benefits of certification for smallholder cocoafarmers include direct benefits such as premi-ums paid and diffused benefits such as con-servation of ecosystems, increased farm yield,employment opportunities and improved laborconditions. The Program also perceives thatcertification fosters better group collaboration byensuring regular checks from IMS or other mem-bers. The certification process requires costs thatshall be absorbed by cocoa traders and buyersthrough the premium payment.In the 1st semester 2015, the Program supportedcertification in Aceh with UTZ Certified; 359 firstyear farmers and 2,237 second year farmers.Similar to the last round certification process, inAceh, two cooperatives serve as certificate hold-er. In Sulawesi, the Program collaborated withADM Cocoa to start the re-certification processfor 1,797 farmers and 1,651 first year farmersin Southeast Sulawesi with UTZ Certified. Untilthe end of the reporting period, the internal au-dit process was still ongoing for the finalizationof Q3 2015. In South Sulawesi, where the certif-icate is also hold by farmer organizations and/or farmer enterprises, the number of RainforestAlliance certified farmers increased until June2015 to 4,878. The Program has also initiatedthe certification process in West Sulawesi withNestlé Cocoa Plan and is currently preparing thefarmers for the internal audits.26 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015

ICT for Certification &TraceabilityThe Program has been working During the reporting period, The application also addedwith CocoaTrace application in the Program was continuous- traceability and certificationthe database management. ly updating the CocoaTrace features on the web-based ap-Through collaboration with application to meet the sector’s plication. The feature enablesPT. Koltiva, SCPP built a state need of a reliable farmer the industry to trace the sourceof the art data management database system. Based on or history of a cocoa productapplication, web-based as well continuous consultation with and monitor the processesas with Android application for the private sector partners, throughout the supply chain.handheld tablets. the Program has been working Through the new feature, hands in hands with PT. Koltiva CocoaTrace becomes a tool to to add more features on the record the traceability infor- CocoaTrace. mation all the way to financial receipts, and premium and The work with one private sector bonus calculation. The certifi- company required the Program cation feature helps the overall to provide polygon data map- process to certify farms through ping of cocoa farm of the partic- the code of conduct installment ipating farmers. To adjust with on the software to ensure full the requirement, CocoaTrace was compliance with responsible, updated and added the polygon sustainable and traceable cocoa mapping capability using the bean productions. In April, ADM Android version. The trial period Cocoa distributed premium and went until the end of 2014, and loyalty bonus to 1,961 farmers, the full operational feature was 4 cocoa buying stations and added later in early 2015. So far KGG as the cocoa farmers’ the team has already collected organization and certification and finalized around 2,900 farm holder using the traceability polygons in the database from feature on CocoaTrace. Soppeng district. The require- ment to collect the polygon map The web dashboard also un- may be expanded to other areas dergoes continuous refinement as this type of map provides a so that the users can easier more accurate size of the farms navigate to get necessary infor- to calculate farm productivity mation, to measure progress, and might help the farmers with and to establish plans. certifying their land. In April, ADM Cocoa distributed premium and loyalty bonus to 1,961 farmers, 4 cocoa buying stations and KGG as the cocoa farmers’ organization and certifica- tion holder using the traceability feature on CocoaTrace. Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 27

28 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015

Integrated AgribusinessFinancing Facility (AFF)Financial Literacy TrainingsThe AFF was implemented in full scale in the first semester 2015. Following an initial solid prepa-ration in 2014, the component continued its implementation with the focus on financial literacytraining for farmers, collaborating with financial institutions, strengthening farmer organizations withsome exciting achievements and sharing gained knowledge. Entering AFF’s second year, a mid-termevaluation was conducted in June 2015 and further knowledge was shared with the stakeholders.Cumulative 14,055 cocoa farmer household members were trained in Financial Literacy (Good Fi-nancial Practices - GFP) within the reporting period, concentrating on cash flow planning and recordkeeping, loans and savings. The household member who manages the household finances is partic-ipating in the training. 10,139 household members, in total 51.8% women, were trained during thefirst semester. The modules are delivered during one day. Trainings are held by SCPP’s field facilitatorsin collaboration with three BDS providers. GFP Participants Annually Cumulative 2015 2012 - 2015 Target Result Target Result30,000 15,00025,00020,000 11,700 7,283 Women15,000 11,700 6,772 Men10,000 5,769 15,000 5,000 5,090 0Collaboration with Financial InstitutionsLast year AFF tried out inviting bank staff to the GFP trainings. The idea behind was that banks couldexplain much better about their products than SCPP field facilitators. Surprisingly that worked outvery well and AFF decided to replicate that approach in all GFP trainings. During the test of the ap-proach, between 16% and 50% of the training participants opened saving accounts. Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 29

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CooperativeStrengtheningThere were some exciting results in strengthening cooperative, especially in Aceh and SoutheastSulawesi highlighted with the two stories below:Koka Jaya, the supported cooperative in Pidie Koperasi Gabungan Gapoktan (KGG) in KolakaJaya received a financing of 130,000,000 IDR (ca. received IDR 2.2 billion, which were distribut-10,000 USD) as working capital for their cocoa ed to 1,961 farmers, 4 cocoa buying stationsbean trade, under a profit sharing scheme, from and KGG as the cocoa farmer’s organizationthe Aceh revolving fund established under the and certification holder. The amount of IDR 2.5SPAN project. This fund is managed by Politeknik million (or USD 200) per metric ton of cocoa isAceh, PINBIS, and Yayasan Sahabat Cipta collec- paid to the cooperative to finance operations,tively, and decided to offer the financing to the internal control systems, external audits, costs ofcooperative, based on the cooperatives business certification, and premiums to the certified cocoaplanning. That is a first start, with which the farmers. Of the total amount of IDR 2.2 billion,cooperative can show that they are able to man- 1.9 billion are UTZ certification premiums andage the funds, using it productively, and create a 300 million are loyalty bonuses.profit. Although being a short-term financing, anextension is in discussion as well as additionalfunding. Their equity still limits their operations,since financial institutions require a certain equi-ty share when they provide financing.Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 31

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Stakeholder Management andNetworking PlatformsRole and Contribution of GovernmentsThe Program works closely with central and local governments in implementing the activities. Atthe national level, the Program is in consultation with the Ministry of Home Affairs (MoHA) and theMinistry of Agriculture (MoA). The cooperation with MoHA is through the Advisory Board governance,while the link to MoA is realized through a private and public stakeholder platform on agricultural de-velopment (PISAgro). These national institutions provide inputs and advices to improve the programimplementation. At subnational level, the Program intensively works with provincial and district gov-ernment to run program activities. The Program is especially focused on collaboration with Forestryand Estate Crop Agency to train government extension staff in order to retain the knowledge andskill at the local level beyond SCPP implementation period. The cooperation also involves selection ofprogram location and farmer identification.Further form of cooperation with the government stakeholders is the capability for SCPP in shapingthe government’s programs in promoting cocoa farmers. Farmers’ promotion program via seeds sup-ply has involved SCPP intensively.During the first half of 2015, SCPP received the following specific support from local Government forProgram related activities:• Government contributions in the form of extension staff, office space, and land for learning center;• Several districts agreed to allocate matching funds to support SCPP initiated activities through the government regional financial management mechanism of Work Plan Development (RKPD) and Regional Annual Budget (APBD) in 2015;• The Agency of Trade and Cooperative (Dinas Perindustrian, Perdagangan dan Koperasi) support- ed the Program for capacity-building activities and warehouse for farmers;• The Health Agency (Dinas Kesehatan) provides technical assistance in nutrition to promote good nutrition practices as well as skill to handle first aid cases. This skill is to fulfill requirements of the certification program;• The Forestry and Estate Agency (Dinas Kehutanan dan Perkebunan) provides tools and equip- ment for demo-plots, extension officers, and some follow-up coaching to cocoa farmers on farm- ing techniques. In some districts, the agencies also started to replicate SCPP training method for their staff and introduced SCPP best practices to farmers in their sub-districts;• The Regional Development and Planning Agency (Badan Perencanaan Pembangunan Daerah) supports the Program with local statistical data, land-use shape files for ArcGIS software and office space for Program staff. Furthermore, in all implementation areas, Bappeda as the leading agency of local government has facilitated a good coordination between SCPP and relevant stakeholder in terms of reporting, monitoring and evaluating of SCPP;• MoHA and inter-ministerial team which consists of State Secretary, Ministry of Foreign Affairs, and the Strategic Intelligence Agency, stated the root cause of Poso conflict and provided hints that Swisscontact might be able to continue the Program implementation in Poso. However, no decision has been taken yet as discussion is still ongoing. Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 33

ConclusionsEntering 2015, the last year of the first SCPP and management assistance. Moreover, SCPPphase, the Program has again proved to be clos- used innovative approach to secure the financialer to the fulfillment of its targets. situation and business model of cooperatives so that the cooperatives can be a professional orga-SCPP continues to improve the Program through nization and support center to their members.innovations, collaborations and monitoring andevaluation. Throughout the first semester, the SCPP undertakes Monitoring and Evaluation pe-Program continues aiming to deliver improved riodically and evaluates its approaches throughplanting material and training to cocoa farmers. studies, consultations with government and part-It continuously strengthens the training programs ners, post-line surveys and improved programby improvement in training modules and ap- monitoring. SCPP also employed shared mea-proach. The successful approach of the Program surement of progress around common indicatorsis verified by a fact, that in the 1st semester with its donors for continuous learning.of 2015, SCPP commenced a new phase withreceiving further funding first from IFAD and then The monitoring activities indicate the Program isMCA-I. By collaborating with more partners, ex- on track with fulfillment of its targets; neverthe-panding to new areas and widening its training less, a large-scale program such as SCPP cannotmodules, SCPP is on track for its scaling up plan exist without experiencing various challengesuntil 2020. To be able to cope with this challeng- and needs for continuous improvements. To being growth, vast recruitment and restructuring able for constant learn out of difficulties and oc-have taken place. casional failures and disappointments, the new Research & Development unit was established toSCPP has continued working hard towards safeguard proper knowledge management with-improving the certification transparency and in and outside SCPP including learning lessons’ensuring traceable beans from farmers to sharing.partners supply chains. Therefore, new uniqueand efficient CocoaTrace feature “Traceability” in- SCPP collaborates with government, financialcluding premium price calculation has been fully institutions and donors to pool expertise and re-implemented and piloted in Southeast Sulawesi. sources and develop most effective interventionsThe Program is committed in making CocoaTrace for greatest impacts. In addition to collabora-a reliable tool for transparency and traceability in tion with government for farmer field schools,the cocoa sector. throughout this semester, SCPP consistently strengthens the cocoa sector in Indonesia bySCPP believes in sustainability through coop- establishing regional cocoa forums that involveeratives’ development, therefore new farmer multiple stakeholders by giving inputs to region-organizations were set up and existing ones al governments and other organizations workinghave been further strengthened by provision of in the cocoa sector.more capacity building, continuous monitoring,34 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015

Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015 35

THE VIDA Building 5th Floor 01-04 Kebon Jeruk, Jakarta Barat 11530 Tel.: +62-21-2951-0200 Swisscontact - SCPP Sumatera Komplek Taman Setia Budi Indah I Jl. Chrysant Blok E No. 76 Medan 20132 Tel.: +62-61-822-9700 Swisscontact - SCPP Sulawesi Gedung Graha Pena lantai 11, Kav. 1108 -1109 Jl. Urip Sumoharjo, No. 20 Makassar 90234 Tel./Fax: +62-411-421370 www.swisscontact.org/indonesia36 Sustainable Cocoa Production Program Indonesia - Bi-Annual Report 2015