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JAKARTA - The National Research and Innovation Agency or Badan Riset dan Inovasi Nasional (BRIN), revealed that the development of coffee agribusiness in the downstream sector has great potential to encourage coffee marketing in Indonesia.
With a harvest area of 1.25 million hectares per year, Indonesia is the second largest coffee producing country after Brazil. Despite this, Indonesia's coffee productivity is still relatively low, namely around 0.55 tons per hectare, which places it in 14th place in the world.
This low productivity has an impact on reducing the area harvested and the volume of coffee exports.
In fact, global coffee demand continues to increase along with increasing coffee consumption. This situation requires government policy intervention to support farmers, farmer groups and other business actors in the coffee market chain, so that the products produced have high competitiveness.
In its statement, BRIN highlighted the many specific types of coffee from various regions in Indonesia, that have been registered and obtained geographical indication (IG) certificates, such as Gayo Arabica, North Simalungun Arabica, Mandailing Sumatran Arabica, and others.
This certified coffee has large export opportunities on the global market and can be a source of foreign exchange for the country.
According to BRIN, the development of coffee agribusiness at the downstream level, such as coffee cafes which are popular with the millennial generation, provides great opportunities for coffee marketing in Indonesia.
It is hoped that increasing marketing volume can improve community welfare, especially coffee producers and agribusiness actors.
However, the high world demand for coffee must be balanced with a sustainable increase in coffee production. Over the last 10 years (2010-2020), the level of coffee productivity in Indonesia has remained low compared to land availability.
The decrease in harvested area from 1.27 million hectares to 1.25 million hectares, or an average decrease of 0.14 percent per year, also affected the volume of coffee exports which also decreased from 432,781 tonnes to 375,671 tonnes, or an average decrease of 1,000 tonnes. 41 percent per year.
BRIN research shows that the low incentives received by farmers is one of the causes of the lack of encouragement to increase production.
Head of the Research Organization for Governance, Governance, Economy and Community Welfare (OR TKPEKM), Agus Eko Nugroho, said that market players' support for farmers is still not well established.
Farmers often do not have a strong bargaining position and must accept prices determined by traders.
Apart from that, factors such as scattered production locations, limited market information, suboptimal product quality, and cash needs at the farmer level are also challenges.
For this reason, the government needs to look for technological breakthroughs and strategic policies in developing coffee agribusiness in Indonesia. One solution is to build business partnerships that connect market actors in coffee development to ensure an increase in farmer income.
The government can also adopt production technology from countries with high productivity to ensure the availability of better production technology.
Apart from that, a strategy for exploiting opportunities is needed to increase production and penetrate the export market.
It is believed that these steps can increase the income and welfare of the coffee agribusiness community in Indonesia in a sustainable manner.(indonesia.go.id/Eri Sutrisno)
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