Story of Change

Market Linkage Improves Welfare of Biopharmaceutical Farmers

Author: Meita Annissa, Paulus Enggal Sulaksono
Published: 13/07/2021

Mulyono (60), a red ginger farmer from Pule Village, Pule Sub-District, Trenggalek District, has high hopes for being a trained farmer of BUMDESMA Sari Bumi, a joint village-owned enterprise. “Now I know how to properly grow a good red ginger. In the past, one bag of seeds only yielded about 5 kg of gingers, now it has tripled to 15 kg. Naturally, my income has also increased,” he explained.

Increased productivity is one of the benefits felt by BUMDESMA Sari Bumi trained farmers after the Trenggalek District Government, together with KOMPAK, implemented the Market Linkage approach.

According to Mulyono, aside from higher yields, farmers are also reaping the benefits from the higher selling price of red ginger. “The price used to be unstable and set by middlemen. Oftentimes, it was below the market price. Now we can sell red ginger to BUMDESMA at a more profitable price,” he added.

Mulyono is one among thousands of Pule Sub-District residents whose life depend on biopharmaceutical crops such as ginger and turmeric. According to Statistics Indonesia (BPS) through its 2018 publication “Trenggalek District in Figures”, Pule Sub-District is the number one biopharmaceutical producer in Trenggalek. Unfortunately, farmers’ lives did not adequately benefit from the status.

The farmers in Pule Village cultivate land to plant red ginger

A great number of biopharmaceutical farmers in this sub-district live in poverty. Even Mulyono himself has since 2013 been listed on the Integrated Social Welfare Database (DTKS), a database of the 40% population with the lowest level of social welfare.

According to research conducted by KOMPAK and the Regional Government in August 2018, there are several factors that can lead biopharmaceutical farmers into poverty. Among these are the use of traditional biopharmaceutical cropping pattern, which generates low productivity and low-quality yields, and the weak bargaining power of the farmers when dealing with the prices set by middlemen.

The Market Linkage approach brings a new hope to the farmers

The Market Linkage approach, piloted since the end of 2018, brings a new hope to the farmers. Among others, this approach has empowered BUMDESMA Sari Bumi to process the biopharmaceuticals into simplicia (dried sliced rhizomes) as feedstock for herbal or traditional medicines. The processed products have higher selling prices and demand.

The approach has proven to be successful when in early 2021 BUMDESMA Sari Bumi entered into partnership with a well-known herbal producer, PT. Bintang Toedjoe, to develop red ginger cultivation. Through this cooperation, Bintang Toedjoe is committed to assisting not only BUMDESMA in processing and buying the biopharmaceutical products, but also the farmers in increasing productivity and improving the red ginger quality.

BUMDESMA Sari Bumi processes biopharmaceuticals into dried sliced rhizomes

Also included in this cooperation is the clearing of 20-hectare land to be planted with red ginger. The Market Linkage approach prioritises the participation of smallholder farmers with financial support from IGrow, a peer-to-peer lending platform that connects community investors with farmers.

“We have practiced seed germination, land clearing, and proper fertilisation, as well as improved the irrigation system. Hopefully when the harvest time comes in December, we’ll have higher yields of better-quality red ginger, which can be sold at a higher price,” Mulyono said.

“We have practiced seed germination, land clearing, and proper fertilisation, as well as improved the irrigation system. Hopefully when the harvest time comes in December, we’ll have higher yields of better-quality red ginger, which can be sold at a higher price,” Mulyono said.

The Head of Trenggalek District Mochamad Nur Arifin is hopeful that the Market Linkage approach will encourage the emergence of new productive businesses that contribute to poverty alleviation.

"With this cooperation, the community―especially the ginger farmers―can develop many business portfolios, from ginger cultivation and ginger trading to processing ginger into simplicia,” he concluded.

Market Linkage is a collaborative approach to improve the quality of commodities for the benefit of the community. In 2018, the National Development Planning Agency (Bappenas)―together with the Regional Government and supported by KOMPAK program―started piloting this approach in five provinces and seven districts for various types of commodities (e.g. water hyacinth handicrafts; coffee, tea, and coconut coir processing; biopharmaceutical processing; tourist village development; and others).

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