Programme profile

Promoting Rural Incomes through Support for Markets in Agriculture (PRISMA) Phase 2

Programme Index Listing

Location
Indonesia
Main implementer
Palladium International Ltd
Other implementers
Swisscontact
Donor
DFAT
Duration
2019 - 2023
Total budget
USD $55 million
Annual budget
USD $11 (approx.)
Contact
info@aip-prisma.or.id
External links
PRISMA website
PRISMA publications

Project description / objective

PRISMA is a major component of the Australia-Indonesia Partnership for Rural Economic Development (AIP-Rural).  PRISMA works in partnership with key-stakeholders to improve agricultural market efficiency and aims to sustainably benefit 1,000,000 smallholder farming households by 2023.

It operates in six provinces of Indonesia - Central Java, East Java, West Nusa Tenggara (NTB), East Nusa Tenggara (NTT), West Papua, and Papua.

Market systems focus

PRISMA focuses on sectors that provide  incomes for a large number of smallholder farmers and have strong growth potential. Its portfolio ranges across crops, livestock and agriculture supporting functions. PRISMA also works on relevant cross-cutting issues including gender and social inclusion, nutrition, applied research and environment.

As of December 2019, PRISMA portfolio consists of 18 sectors. Below are some examples of the principal market system focuses:

Beef

Indonesia is the largest beef producer in Southeast Asia, with an annual production of 496,302 tons (Agricultural Statistics, 2018). Local demand for beef exceeds domestic production capacity. Indonesia remains dependent on imported beef. There are many opportunities to develop the local beef market in Indonesia.

ICT & financial services

Information, communication and technology (ICT) and formal financial services play vital roles in the process of improving knowledge of, and access to, better quality products and services leading to increased productivity and income. However, both sectors face major challenges in the agriculture industry. 

  • Finance: most agricultural credit goes to companies or big value chain actors in agriculture, not to smallholder farming households. 
  • ICT: challenges include limited infrastructure, farmers’ lack of technology knowledge, and poor understanding of agriculture among ICT players who are willing to tap into the sector.

Maize

Maize is one of Indonesia’s major crops. However lack of access to high quality of agricultural inputs and services, and low adoption of good agricultural practices (GAP), means average national productivity is far below its potential.

Mung Bean

Mung bean is an important crop in Indonesia. It is highly nutritious and can endure dry soil. However, national production has declined almost 3 per cent annually and Indonesia is now the sixth largest mung bean importer in the world. There are many opportunities to develop the mung bean market, especially for the food processing industry which dominates domestic consumption.

Soil Treatment

Although the fertiliser market is heavily subsidised by the Indonesian Government, this only covers 26 per cent of cultivated land. Farmers generally have limited knowledge of technical applications (correct timing, dosages, and sequences; appropriate methods; and types of fertilisers along with their benefits, etc.) and of cost-benefit calculations (a business mindset). This can lead to increased production costs or a decline in productivity.

Programme interventions

Beef

  • Promote cattle-specific concentrate feed and better feeding practices to cattle farmers
  • Facilitate feed producers to invest in (1) product development and promotion to increase its sales through various marketing channels, and (2) training and motivating its agents to increase their capacity and motivation to promote concentrate feed to farmers
  • Promote commercially available, appropriate and affordable feed and animal pharmaceuticals for cattle fattening to boost weight gain.

ICT & Financial Services

  • Bridge the formal and informal in financing. This includes using tools such as value chain financing (VCF) and trader credit, credit scoring, disbursement through kiosks, and money transfers and remittances
  • Work with the supporting functions of consultancies to support this market segment
  • Wupport partners to develop ICT for loan administration
  • Commercialisation of business models for finance and information through technology
  • Support value chain actors in accessing resources, including information and finance, via technology

Maize

  • Promote appropriate post-harvest services
  • Promote the use of hybrid seed
  • Improve production and promotion of open-pollinated seed varieties
  • Optimise inputs (fertiliser, crop protection) and the relevant GAP
  • Link off-taking services
  • Increase access to irrigation and its services
  • Promote appropriate financial products for maize farmers
  • Promote access to affordable on-farm and off-farm machinery and services

Mung Bean

  • Collaborate with private sector seed nurseries to produce more certified mung bean seed and to increase farmer awareness of the correct application of GAP
  • Facilitate partnerships between the private sector and new contract farmers to increase availability of mung bean seed in the market
  • Facilitate partnerships between seed research institutions and the private sector to provide capacity building to selected contract farmers to produce better mung bean seed quality, as well as to ensure the timely availability of foundation seed
  • Promote a high-yielding variety of mung bean seed and GAP application through partnerships with seed companies
  • Develop new and high-yielding varieties of mung bean seed which match end market demand, by linking seed companies with research institutions

Soil Treatment

  • Promote high quality commercial fertiliser use
  • Introduce good fertiliser practice

Notable results (systemic change, poverty impact)

(NB these results are up to August 2019)

  • 355,723 smallholder farming households have experienced increased incomes by 265 per cent
  • Total additional incomes of IDR 2.072 trillion (USD 138 million)
  • 183 partners from private and public sectors
  • Total increased turnover of IDR 686 billion (USD 46 million) for more than 9,700 small and medium enterprises 
  • Additional or more inclusive investment of IDR 1 trillion (USD 67 million) from stakeholders

Note: IDR USD average exchange rate 2015

 

[uploaded January 2020]

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