Indonesia is the fourth largest coffee bean producer in the world. The Ministry of Agriculture (Kementan) according to data from the International Coffee Organization (ICO) states, in 2019/2020, the total world coffee demand will reach 9.8 million tons per year, while the total domestic coffee production is only 686 thousand tons. Brazil, Vietnam, Colombia are the 3 largest coffee producing countries in the world.
In order to increase the quantity and quality of domestic coffee beans, the Government through the Ministry of State-Owned Enterprises (BUMN) launched the Nusantara Coffee Project Management Office (PMO) Program. Dwi Sutoro as Marketing Director of PTPN III (Persero) Nusantara Plantation Holding, carried out the mandate as Chairman of PMO Kopi Nusantara.
Currently PMO Kopi Nusantara has 9 pilot projects in 6 regions across Indonesia. “To date, we have facilitated more than 6,500 hectares of land managed by 2,500 farmers. We hope that the harvest from the land will be used to meet the needs of the domestic and international markets,” said Dwi Sutoro.
The opportunity for Indonesia to become a major player (key leader) in the international coffee industry is wide open, because Indonesian coffee beans, with good on-farm and off-farm processes, have a premium level of taste and quality. This potential needs attention, especially with regard to Intellectual Property protection instruments, in this case Geographical Indications (IG).
In addition to the Ministry of SOEs, the Ministry of Foreign Affairs (Kemenlu) actively participates in developing and formulating innovations to increase the competitiveness of coffee from Indonesia. The Ministry of Foreign Affairs, through the Directorate General of Multilateral Cooperation, held the “Commodities Update’ Input Network: Synergy of Indonesian Coffee Diplomacy within the framework of Increasing a Sustainable and Competitive Coffee Commodity”. This activity was held in a hybrid manner (a combination of offline and online meetings) on Tuesday (21/6) at the Pullman Legian Beach Hotel, Bali.
This event is an initiative of the Ministry of Foreign Affairs to formulate a holistic policy and involve all stakeholders. One of the main objectives of this event is to find innovative solutions that can support efforts to increase Indonesian coffee exports in the global market by increasing competitiveness. Dwi Sutoro as Chairperson of PMO Kopi Nusantara participated as the main speaker, in a presentation entitled, “The Role of Public and Private Sector Partnerships in Supporting Sustainable and Competitive Coffee Commodities”.
Currently there are several challenges in the coffee supply chain system in the world. Some of them are tariff barriers, tight competition and requirements to enter the global market, as well as several sustainable certification requirements. However, Dwi Sutoro is optimistic that through the synergy and cooperation of all parties under the PMO Kopi Nusantara umbrella, Indonesia will be able to increase the quality and quantity of coffee beans.
In his presentation, Dwi Sutoro stated, “PMO Kopi Nusantara develops various assistance programs and encourages the creation of a sustainable business ecosystem with the target of increasing the income and welfare of coffee farmers in the country.” Furthermore, Dwi Sutoro stated, assistance to farmers is an absolute step to increase coffee production capacity, because 96.1% of coffee land is owned by smallholder farmers.
PMO Kopi Nusantara applies a holistic strategy, in the process of assisting farmers. Starting from the aspects of processing sustainable crop cultivation, information and assistance on agricultural cultivation, digital farming and agricultural mechanization, access to capital and protection of agricultural risks, social development of farming communities and inclusive businesses, as well as agricultural market partnerships (Farm to Market Partnership).
Expert Staff for the Minister of SOEs for Global Value Chains, Reynaldi Istanto, said that cooperation in this business ecosystem needs to be replicated immediately. “In this assistance process, PMO Kopi Nusantara involves SOEs producing fertilizers, plantations, banking, insurance, trade, and local governments. Apart from the hands of the government, we also encourage the role of the private sector to participate in this initiative. We need to replicate this in many places in Indonesia. PMO Kopi Nusantara is trying to improve the domestic coffee supply chain so that it can become a market leader in the international market,” said Reynaldi.