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SUCCESS STORIES FROM PNPM-AP Sulawesi Tenggara, Sulawesi Selatan, Nusa Tenggara Timur & Nusa Tenggara Barat

Kristen Stokes, December 2009.

Success Stories From PNPM-AP 3

ContentGlossary IntroductionMethodology

Case StudiesSulawesi Selatan, Kabupaten BantaengFloating Seaweed in South SulawesiKelurahan Bonto Sunggu, Kecamatan Bissapu, Kabupaten Bantaeng

The Flight of the ‘Super’ ChickensDesa Bonto Saluang, Kecamatan Bissapu, Kabupaten Bantaeng

Organic Fertilizer finds a Market in South SulawesiDesa Tombolo, Kecamatan Gantang Keke, Kabupaten Bantaeng

Nusa Tenggara Barat, Kabupaten DompuWomen Cash in on Soy Beans by Making Tofu and Tempe Desa Adu, Kecamatan Hu’u, Kabupaten Dompu

Desa Sawe Strikes Water with the Construction of Twenty two BoresDesa Sawe, Kecamatan Hu’u, Kabupaten Dompu

Nusa Tenggara Barat, Kabupaten Lombok BaratHome Industries Take on New Meaning for the UnemployedDesa Beleke, Kecamatan Gerung, Kabupaten Lombok Barat

Desa Geres, Kecamatan Gerung, Kabupaten Lombok Barat

Peanuts are given New Life as Garuda Food enters the MarketDesa Sembung, Kec. Nermada, Kabupaten Lombok Barat

Sulawesi Tenggara, Kabupaten Konawe SelatanA Farmers Kiosk Makes Life Easier in Kecamatan KondaDesa Pombulaa Jaya, Kecamatan Konda, Kabupaten Konawe Selatan

Sulawesi Tenggara, Kabupaten MunaA Farmers Road provides new Opportunities for the CommunityDesa Wambona, Kecamatan Warkosel, Kabupaten Muna

Nusa Tenggara Timur, Kabupaten Timur Tenggara SelatanCattle Fattening in the Hills of TimorDesa Tutem, Kecamatan Mollo Utara, Kabupaten TTS

Virgin Coconut Oil – A Remedy for All?Desa Warupele II, Kecamatan Aimere, Kabupaten Ngada

New Coffee Cultivation Techniques make for Higher PricesDesa Raka Laba, Kecamatan Golewa, Kabupaten Ngada

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Success Stories From PNPM-AP4


GlossaryACIAR : Australian Centre for International Agricultural Research

AusAID : Australian Agency for International Development

BPMD : Badan Pemberdayaan Masyarakat Desa

Village Community Empowerment Agency

Desa : Village

IFC : International Finance Corporation

Kabupaten : District

KDP : Kecamatan Development Program

Kecamatan : Subdistrict

NMC : National Management Consultant

PNPM-AP : Program Nasional Pemberdayaan Masyarakat – Agribisnis Perdesaan,

National Community Empowerment Program – Village Agribusiness

PNPM-MP : Program Nasional Pemberdayaan Masyarakat – Mandiri Perdesaan,

National Community Empowerment Program – Rural

PMO : (SADI) Program Management Office

PUAP : Pengembangan Usaha Agribisnis Perdesaan,

Village Agribusiness Development Program

SADI : Smallholder Agribusiness Development Initiative

TTS : Timur Tenggara Selatan

VCO : Virgin Coconut Oil


From 2008 to 2009, Program Nasional Pemberdayaan Masyarakat – Agribisnis Perdesaan (The National

Program for Community Empowerment – Village Agribusiness, or PNPM-AP) was piloted in eight

districts in four provinces of Eastern Indonesia: Sulawesi Tenggara, Sulawesi Selatan, Nusa Tenggara

Barat and Nusa Tenggara Timur. The program was funded through a grant from AusAID as Sub

program 1 of SADI, the Small Agribusiness Development Initiative.

PNPM-AP aims to increase productivity and incomes, and reduce the vulnerability of rural households

through improved access to technology, inputs, and markets. It uses the KDP (Kecamatan Develop-

ment Program) approach now integrated into PNPM, establishing decentralized planning and finan-

cing mechanisms to support the development of livelihood activities. The activities are supported

through the provision of block grants at the subdistrict level. Only one full cycle of block grants was

approved, implemented and acquitted during the pilot in 2008-2009.

This report includes a set of twelve case studies. Each case study presents a descriptive analysis of

a PNPM-AP activity, and how the program increases productivity, raises income, or stimulates a new

business. The cases aim to show the situation prior to the implementation of PNPM-AP, and after

the program had begun. The report highlights some reasons why these activities were considered

successful (best practices), and includes more general insights about the program.

Introduction


MethodologyAt the end of 2008, a supervisory mission conducted by the World Bank, AusAID, PMO, PMD, NMC

and PNPM-AP staff identified a number of successful PNPM-AP activities, which warranted further

investigation into the causes of that success.

Due to time constraints, not all of the activities on the NMC list of successful PNPM-AP projects could

be visited. Instead, the PNPM-AP staff (FK, FasKab and specialists) selected activities to visit based

on what they considered most successful, accessible in the time available and varied in the type of

activity conducted. Where time permitted, they were also given the opportunity to visit good activi-

ties that were left off the list – typically commonly because they had not been visited on previous

supervision missions.

Projects in seven of the eight districts were visited; Kabupaten Tana Toraja, where projects were

moving at a slower pace, was not visited, and has been excluded from this report.

Prior to the site visits a simple list of criteria or indicators based on the program log-frame and

discussions with PNPM-AP staff was developed to help determine why these projects were

considered successful (see Annex 1). In addition, basic interview questions were prepared for the

groups as an initial guide for information collection (Annex 2).

Focus Group Discussions (FGD) were held with each of the project groups visited, and direct obser-

vation of project activities was conducted where possible. In depth interviews and discussions were

also carried out with PNPM-AP staff (Korprov, FasKab, FK, PL, SADI Coordinator, BDSP representatives,

and local government representatives).

The case studies in this report are based on interviews and direct observations. The report attempts

to capture the way the activities were described by the beneficiaries and PNPM-AP staff themselves.

Some analysis has been conducted in an effort to elucidate some of the best practices which can be

drawn from the cases. Similarly, some limitations or recommendations are also included.

The views expressed in the report are those of the consultant, or where indicated, the views of the

program beneficiaries. They do not necessarily reflect the views of the World Bank, Government of

Australia or the Government of Indonesia.

Case Studies

Success Stories From PNPM-AP


SULAWESI SELATANKabupaten Bantaeng

Throughout the world, seaweed is harvested as a food source and exported for the production of agar

and carrageen. In suitable coastal locations, seaweed cultivation can improve economic conditions

and reduce pressure on local fisheries.

For over five years, seaweed has been a primary source of income in the village of Kelurahan

Bonto Sunggu. Before the introduction of PNPM-AP, the villagers relied on traditional cultivation

techniques, which yielded financially viable harvests. However, the villagers wondered whether

newer cultivation techniques would increase their yield. They also had limited infrastructure for

drying their seaweed.

A lecturer from Hasanuddin University (UNHAS) in Makassar with more than a decade of experience

in seaweed cultivation was selected as the BDSP to provide training and help the group establish

an experimental plot where a range of different cultivation methods could be demonstrated. PNPM-

AP funds were released while the weather was not conducive to seaweed cultivation; but the group

established a demonstration plot anyway, and achieved some positive results.

The group tried a number of different methods in the demonstration plot: changing the distance

between the seedlings attached to the main strings; varying the number of buoys attached to the

strings as floatation devices; and growing the seaweed vertically as opposed to their traditional

Floating seaweed in South SulawesiKelurahan Bonto Sunggu, Kecamatan Bissapu, Kabupaten Bantaeng

Group Name: Sejahtera

Group Membership: 15 members (2F/13M)

Funds: Rp. 40,310,600 (across two 15 member groups)

Estimated increase in income: over Rp 1 million per member annually.

Best practices:

Pro-active group leadership •

Utilization of a pre-existing group •

Improving techniques and skills to obtain a better yield in an established industry.•

Reduced reliance on loan-sharks•

Limitations or Recommendations:

Requires further guidance to establish links with potential buyers•


horizontal method. Experiments indicated that increasing the space between seedlings attached to

the nylon strings from the traditional wrist width apart to approximately 20cm improved the yield of

the adult plants; so did using fewer buoys in higher salinity water. The villagers are experimenting

with a vertical method of cultivation, but initial results suggest that their normal horizontal place-

ment of strings may be more productive.

In addition to training and mentoring, PNPM-AP funds were used to purchase a small boat, an

addition to the small fleet the group uses to place strings in the ocean and harvest the seaweed.

Program funds were also used to purchase materials for the demonstration plot and to construct a

drying platform.

Each member of the Sejahtera Group has between 100 and 1000 strings. The price of seaweed

fluctuates—in 2009, 1kg of dry seaweed sold from a low of Rp 6,000 to a high of Rp 12,500—but the

group estimates that, after operational costs, they are able to earn approximately Rp 1.5 million per

100 strings of seaweed every harvest. The group cultivates seaweed year round and can take in five

harvests per year, but crop failures are not uncommon. Salinity rises during the dry season, and can

limit the seaweed yield for a few months of the year.

It is difficult to estimate the exact monetary contribution that PNPM-AP will have on the income

of the seaweed group, which has only recently begun to implement their new techniques. However,

the group estimates that the PNPM-AP inputs will help each group member take home an additional

Women (left) and man (top) attach the seedlings to the nylon strings.


Rp 1 million per year. Part of that total would be from savings, as the group will no longer borrow

initial capital from loan-sharks, or rent space to dry their seaweed; and part from new earnings, as

the seaweed yield increases--provided that the price of seaweed remains stable.

One group member who started cultivating seaweed in 2004 with 100 strings, and has now

expanded his plot to 300 strings, said:

‘I have been able to get married on the proceeds of my seaweed. I was able to save the Rp 5 million for

the dowry. Also, I recently built a house’.

As another positive outcome, the PNPM-AP demonstration plot has helped the group maintain their

seaweed cycle throughout the dry season, and provided good quality seedlings for their new crops.

This will reduce their input costs by eliminating the need to purchase seedlings.

The group members have great enthusiasm for the program, and feel they now have the theoretical

and practical knowledge to improve their seaweed yield as well as the support network to develop

their business further. The head of the group explained:

‘It’s hard to evaluate the changes in our income since the training because we really haven’t had good

weather for seaweed. But, indeed the results of our demonstration plot have been positive. We have been

able to hone our techniques and also we have seedlings for our next crop. They have been divided among

the group…I think the quality of our crops will be better, God willing’.

Seaweed in Sulawesi Tenggara

In Desa Tanung Pinang in Kabupaten Muna (Sulawesi Tenggara) PNPM-AP funds were used to conduct

training in seaweed cultivation and to build a drying platform. The community was so pleased with the

platform–Desa Tanung Pinang is built on stilts above the water, and drying space was very limited--that

the village head has suggested that they construct a second similar structure in the village.


Group Operating Procedures

Although the Sejahtera Seaweed Group was set up prior to the implementation of PNPM-AP, their

activities were limited before PNPM-AP provided additional training in simple business strategies and

group management procedures.

The group consists of a group head, secretary, treasurer and members. They meet formally once a month

(in addition to regular informal interactions) to discuss any new developments. Members find collective

selling power a highly motivating reason to join and stay with the group. The group sells their dry seaweed

to three primary buyers in the village, who then take it to Makassar for resale. The group can command

between Rp 100 and Rp 1,000 more per kilogram of dry seaweed than if each farmer were to sell on an

individual basis.

The group accumulates funds from a number of different sources, including regular fees from group

members and the sale of seaweed from non-group members. Members can borrow group funds to offset

the costs of production at start of the season, and repay the loan with no interest after the sale of their

seaweed. Non-members can borrow interest free to cover their initial seaweed production costs provided

they sell their produce to the group at a reduced price (generally about Rp 3,000 less per kilo than the

standard price) until they have repaid their loan, usually after three harvests. This process follows the

Islamic prohibition on charging interest, and still allows the group to amass more seaweed and increase

their bargaining power.

The group has strong leadership and transparency. Discussions within the group inspired the group leader

to approach a company in Makassar dealing in the export of seaweed to Surabaya, PT Giwan Citra Laut,

to discuss the possibility of direct sales. The company would transport the seaweed from the farmers

directly to the port in Makassar for export. The outcome is looking positive, and further discussions will be

conducted in January once the dry season has finished and seaweed production gets back underway.


The villagers of Desa Bonto Saluang have

dubbed the hybrid offspring of ‘Arab’ and

‘local’ chickens as ‘Super’ chickens. This

‘Super’ breed has good laying potential,

averaging about 70 eggs per 100 chickens per

day, with larger eggs than the local variety.

The current demand for the eggs is strong,

and the locals believe ‘Super’ chickens can

become a source of additional income.

The members of Sijunjung Tinggi have various

occupational backgrounds. Many of the men

grow rice or corn on a seasonal basis, and

often find additional work as laborers. Others

were unemployed before the introduction of

PNPM-AP. a number of the female members

of the group trades their wares in the local

markets on an informal basis, in addition to

their work as housewives.

Before the PNPM-AP activity began, approxi-

mately 60% of the group’s members already

The flight of the ‘super’ chickensDesa Bonto Saluang, Kecamatan Bissapu, Kabupaten Bantaeng

Group Name: Sijunjung Tinggi

Group Membership: 22 members (6F/16M).

Funds: Rp. 99,069,850

Estimated increase in income: currently Rp 240,000 net per month per member

Best practices:

Sound identification of business niche•

Engaging a BDSP with close ties to the community and relevant experience•

Up-skilling community members enabling additional income in a relatively new business in the village.•

Sound group leadership•


Requires further guidance to ensure continued good group management and cost analysis to •

calculate profits and aid in the formulation of additional group regulations

Group Member and his Chickens.


had some experience raising local chickens. They could see that there was the potential to earn

additional income from the chicken industry, and even more so if they were able to break into the

‘super’ chicken industry.

‘We have plenty of corn growing here so we wouldn’t have any problem making the chicken feed.

Also, we have seen other people succeed with chickens after they received guidance from the kyai

(an Islamic scholar) …and there isn’t any problem with the market as people always want eggs,’

explained one group member.

PNPM-AP funds were used to provide each member of the group with five hens, one rooster and 44

chicks. Group members constructed their own laying cages, and received four days of group manage-

ment training and practical lessons on the upkeep of chickens from the BDSP. They also received

incubators for hatching eggs and the additional ingredients required to make chicken feed.

The local kyai (Islamic scholar) was selected as the BDSP, to teach the group about the breeding,

upkeep and risks involved in raising chickens and to provide guidance to the group over a period

of three months. The group was pleased about his involvement in the activity; he is a respected

member of the community with many years experience breeding and raising chickens, who has

mentored villagers in nearby districts in chickens farming, and is a regular speaker on the topic at

the Local Office for Livestock. Even after his contract with the group was finished he continued to

come to the village to share a coffee, discuss the progress of the chickens, and answer questions.

Chicken Feed produced from surplus corn in the village.


Although their chickens have been producing eggs for only the last two months, the group is

confident that they will experience financial gain from their business. Their primary cost is the

production of high quality chicken feed, which they make from corn (sourced primarily from their

own crops), powdered rice husks, mineral supplements and concentrate. Unanticipated medical

expenditures for the chickens could increase costs. As of now, the group has had less than 2% of its

chickens die.

The group members are able to sell a container of 30 eggs for Rp 27,000. A simple analysis indicates

that actual net profit is about Rp. 12,000 per container. Each group member collects approximately

35 eggs per day from their chickens. A small number of the eggs are consumed by their families, and

the remaining eggs are sold at the local market or in the neighbouring sub-districts.

Although the eggs are sold collectively, profits go directly to the owners of the chickens. Each

member has made a one-off deposit of Rp.50,000 to the group funds, and provides two eggs per day

as a further contribution. The group’s next step is to determine clearly how the money in their group

account will be used.

‘We don’t know what we’ll do with the money yet. Perhaps we’ll buy concentrate. Maybe we will make it

like a cooperative so we can buy concentrate with the group’s money and then we can buy it in bulk in

Makassar so it’s cheaper,’ suggested one of the female group members.

The group also realizes that the group funds

provide them with a financial safety net,

mitigating the risk of failure; for instance,

if their chickens were to come down with

an illness. While most group members con-

sider the egg business a secondary source

of income, some of them have expressed

hopes that it could become their primary

source of income in the future.


‘We have always grown rice, cocoa, corn and rambutan here. Sometimes we plant about 10 different types

of food crops on our plots when we aren’t planting rice, but these plots are very small and our earning

potential is limited’ (Group Member).

In the past, some members of the Tani Pelanjong Farmers Group had made small quantities of

organic fertilizer for use on their own land. They never contemplated scaling up their endeavor, and

turning it into a marketable business to supplement the meager income they earn from the sale of

their farm produce.

When PNPM-AP was introduced in the village, the participants were aware of farmers groups through-

out the district who were making organic fertilizer for an ever growing market. The Local Office of

Agriculture is now promoting the use of organic fertilizers in place of chemical based fertilizers, an

increasing number of ‘greening’ projects are being implemented in the district, and the demand for

organic fertilizer is growing rapidly.

Through a competitive community voting process, the group received funding in support of a new

organic fertilizer business, and in April 2009 their activity began. Funds were used to purchase

equipment so that the farmers would not have to process the raw products manually, and could

produce a larger quantity of fertilizer. Funds were also used to purchase the first batch of activator,

an organic agent used in the compost fermentation process. A reputable BDSP was selected to train

the group in the production of organic fertilizer, including the use of the equipment and marketing.

Organic fertilizer finds a market in South SulawesiDesa Tombolo, Kecamatan Gantang Keke, Kabupaten Bantaeng

Group Name: Tani Palanjong

Group Membership: 28 members (mixed male/female)

Funds: Rp. 99,038,800

Estimated increase in income: Rp 1.8 million net per month for the group (producing 300 bags of

fertilizer per month – production to be increased over time).

Best practices:

Up-skilled the beneficiary group enabling a secondary source of income•

Tapped into a pre-existing and expanding market •

Selection of BDSP with current and reputable marketing network to enable smooth marketing of product•

Environmental benefits with the reduction of chemical fertilizers•

Excellent relationship between PNPM-AP staff, BDSP and group members.•

Limitations or Recommendations

Group requires further guidance in developing their rules and regulations•


The group collects manure, vegetation and organic farming waste from their own village for process-

ing into fertilizer. During the training they produced thirty 25kg bags of organic fertilizer, which they

used on their own crops as a trial. Little by little, the farmers are trying to reduce their own use of

chemical fertilizers; in this case they mixed one part urea based fertilizer with two parts of organic

fertilizer, and achieved sound results.

‘We can’t change our ways immediately, but we can

slowly…if we suddenly starve our soil of urea we may

not get a good yield, but if we do it slowly we know we

will,’ explained one of the farmers.

Since the training, the group has produced two

more batches of fertilizer, a total of 470 bags. Of

these, 340 bags were sold for Rp.15,000 per bag.

Currently, the group has Rp 5.1 million in their

group account.

Now that the training has finished, and PNPM-AP funds are no longer available to cover initial costs,

the group is holding discussions with their BDSP about the future provision of raw materials and

fertilizer sales. The BDSP has guaranteed them a partnership which benefits both parties, which

promises the group a profit of Rp.6,000 per bag of fertilizer. The farmers are just waiting for the

onset of the rainy season to re-start their production.

(Top) Group Members and their Organic Fertilizer.

(Right) BDSP representative supervises the production process.


Profile of the BDSP

The BDSP who conducted the

technical training in organic

fertilizer production is an

independent businessman,

whostarted an organic

fertilizer marketing business

in 2005. Originally from Java,

he identified a niche in the

organic fertilizer industry in

South Sulawesi and began

working with groups to start

production. He now has

partnerships with 10 groups

in the Bantaeng district.

‘…there are good future prospects. The demand for organic fertilizer is increasing. The only obstacle these last

couple of months is the dry season…some orders have been postponed because a number of projects haven’t

started.’

He enters into partnerships with groups producing organic fertilizer, and provides them with a guaranteed

market. He provides each group with the activator used in the fermentation process and the packaging for

the finished product. The group provides the labor, and raw materials including organic farming wastes,

manure and vegetation. Profits are then divided 2:3 between the farmers and businessman respectively.

Sales are generally concentrated in the Bantaeng district, but recently have spread throughout South

Sulawesi. In 2008 he sold 1200 tons of fertilizer, compared to 200 tons in 2006. According to his

calculations based on orders he should sell 1600 tons by the end of 2009. He also sold fertilizer for 5

hectares of rice cultivation land to the SRI rice group funded by PNPM-AP.

‘…actually there is still a shortage here if we are at maximum production’, he explained.

In order to meet the growing market, he has just gone into partnership with the Local Office of

Plantations to purchase heavy equipment for the production of granulized organic fertilizers. He has

assured the farmers that this will not stunt the growth of their own organic fertilizer business,

because he will resell the fertilizer as he buys it from the farmers, and place additional orders for fertilizer

to refine into pellets.


NUSA TENGGARA BARATKabupaten Dompu

Maju Bersama Group did not exist before the introduction of PNPM-AP in the village. The men and

women who formed the group were unemployed or had occasional seasonal work – for example,

women would plant out the rice seedlings in season. Generally, the women would do housework and

rely on their husbands to provide for them financially.

The group saw a niche for the production of tofu and tempe, soy bean products that are best eaten

fresh, and cannot be stored for long periods of time. At that time, tofu and tempe were available only

in Dompu, the district capital, approximately 30km from their village. The local people were unable

to consume as much tofu or tempe as they would have liked because it was not readily available.

Often they would buy it if they were in town, or would ask one of their friends or relatives coming to

the village to buy it for them.

Desa Adu is well known for soy bean production, and there are often surplus or cheap soy beans

available in the village. The women knew that there was potential for them to make their own soy

products if they learned how.

Women cash in on soy beans by making tofu and tempeDesa Adu, Kecamatan Hu’u, Kabupaten Dompu

Group Name: MajuBersama

Group Membership: 25 members (20F/5M).

Funds: Rp. 83,540,400

Estimated increase in income: Currently Rp 2 million per month for the group (tofu and tempe).

Best practices:

Good identification of business potential•

Excellent group management and administration (strong group leadership and desire from group •

members to succeed, excellent book-keeping and transparency).

Utilization of raw products available in the village (soy beans)•

Improved group members’ capacity by teaching them a new skill•

Development of additional income source for the group which was not available previously.•

Overcame a problem with BDSP that did not have the relevant practical experience (pro-active •

PNPM-AP staff and group members).


Requires thorough assessment of BDSPs (BDSP had theoretical experience but no practical experience)•

Limited access to finance for investment in a shelter for the business activities.•


Before their proposal was selected the group members had no experience processing soy beans into

tofu or tempe, but they possessed a strong business sense and a desire to master the techniques.

In April 2009, the group was provided with all the equipment required to kick-start their business:

two small industrial machines (for skinning and grinding the soy beans); an industrial sized wok;

storage cabinet to keep their products fresh for longer; and all the utensils required for the

production process. They also received training in group organization and management, the practical

aspects of tofu and tempe production, and marketing and entrepreneurship.

The first round practical training was not a success. The BDSP from the University of Mataram

(UNRAM) knew how to repair the machines, but had no practical experience of making tofu. The

group wasted 80kg of soybeans with no result, and demanded that they get further training before

moving on to marketing and entrepreneurship, arguing that this training would be pointless without

a product to market. PNPM-AP staff found a local speaker who had practical experience in making

tofu and tempe. The new trainer taught the group to make high quality soy bean products with great

success.

It costs the group Rp. 32,000 to produce one tray of tofu (100 pieces) which they sell for Rp 60,000,

for a profit of Rp. 28,000 per tray. They produce and sell nine trays per week for a total profit of Rp.

252,000. They are always able to sell all of their stock. The women take freshly-prepared tofu door

to door in their village and in the neighboring villages. They are hoping to soon do a simple market

analysis to see if they can increase production and expand their market.

Tofu Production.


The group has strong administration and management

procedures.They meet on the 25th of every month and

divide the profits of their business. One third of their

profits are set aside for maintenance of machines, one

third is set aside as group capital and one third is

divided between the group members. In addition, each

group member contributes an additional Rp. 1,000 to

the group at the monthly meetings as a mandatory

compulsory savings.

Soy beans won’t be grown in the village for another

three months; the villagers are currently preparing to

plant their annual rainy-season rice crop. The group

has purchased over 100kg of soy beans so that they

are able to continue production until the next soy

bean harvest in the village. The group tends to be very

forward thinking and is determined to expand their

business. The head of the group explained:

‘While we have had our ups and downs, particularly when the first BDSP came and tried to show us how

to make tofu and it failed, we have never given up. We are all so determined and looking at how our

business has gone so far we are sure that it will just continue to grow. It makes us all so happy when we

get out here [in the garden] and start to make the tofu…only thing now is we need to find some way to

cover this area so production can continue in the rainy season.’

Cost Analysis – one batch of tofu (100 pieces)

Raw Materials

4.5 kg of soybeans

Two bottles of vinegar

One packet Asam

One stack firewood

kerosene

Packaging

Disaggregated Cost

Rp. 4,500 per kg

Rp. 2,000 per bottle

One packet Rp. 2,000

Rp. 5,000 per stack

Rp. 1,000

Group contribution

Total

Total Expenditure

Rp. 20,250

Rp. 4,000

Rp. 2,000

Rp. 5,000

Rp. 1,000

-

Rp. 32,000

Finished Product before Packaging.


Sawe Village has a population of just under 2,000 people, most of whom subsist on farming rice, soy

beans, corn, and cattle. Prior to the construction of the boreholes, the farmers in the area were only

able to plant two crops a year (rice and a secondary crop) because they were reliant on the rain. In

the dry season, some farmers would leave their paddocks and go fishing. However, the income they

earned from fishing was inconsequential compared to their crops.

PNPM-AP funds were used to install 22 bore wells in the village, with the capacity irrigate over 70

hectares of dry land. Seventeen of the bores included all of the pipes, pump and fittings as well as

a shelter for the pumps. The other five are just the bore holes and shelters, but can be attached to

one of the other pumps to irrigate additional land. Over 200 people in the village make use of these

bores.

Immediate benefits from the bores are clear. The farmers are now able to grow three crops a year.

The first and second crop are watered with rain, backed-up as necessary by the bores, and the third

with only bore water. They grow rice once a year, and then either soy beans or corn for the following

two crops. The villagers have estimated that the ability to grow a third crop will raise the annual

income from each hectare of land by approximately 8 million Rupiah per year.

There is still some discussion concerning the maintenance of the bores. The three member

Infrastructure Maintenance Management Team is planning to start collecting a fee at harvest time

from the farmers who use the bores. These funds will then be available for maintenance of the bores

in the future. There is also talk of village regulation of the use of the bores.

Desa Sawe strikes water with the construction of twenty two boresDesa Sawe, Kecamatan Hu’u, Kabupaten Dompu

Whole of Village Proposal

Funds: Rp. 289,715,800

Estimated increase in income: Rp 56 million per year over 70 hectares of newly irrigated land.

Best practices:

Identification of a suitable ‘quick & sustainable’ proposal where water is a limiting factor for agri-•

cultural production.

Provision of new opportunities for numerous farmers to increase their income (allowing for a third •

crop annually).


Requires further guidance to ensure there is a village regulation or fees collected for maintenance •

of the bores.


The beneficiaries are already enjoying the benefits of the bores,and they feel a deep gratitude for

the service they have been provided:

‘Our group leader isn’t here at the moment as he’s currently on the Haj…he got a very good harvest’ (Group

member).

‘I’d rather be a farmer than anything else…what’s more with the enthusiasm we have now with these

bores…I think I’ll eventually be able to buy some cows’ (Group Member).

Group Members demonstrate how to use one of the bores and pumps.


Kabupaten Lombok Barat

Unemployment in Desa Beleke is quite high, especially among women. Traditionally, women have

been happy to stay at home and wait for their husbands to earn an income; but things are starting

to change.

Over time, the expansion of the village has reduced available farmland, and field allotments have

grown smaller and fewer. As a consequence, there are fewer jobs available in the fields for the

younger generation. For this reason, many farmers have taken to planting fruit trees around their

houses or in any of the unused space in the village gardens. Tomato, banana and papaya plants are

commonplace in the gardens around the houses.

The price of tomatoes fluctuates dramatically. When there is a glut of tomatoes there is very little

market for them, as most of the villagers grow their own produce and don’t need to buy additional

fruit or vegetables. At times, good tomatoes go to waste. For this reason, when PNPM-AP was

introduced, many of the women in the village focused on using these excess tomatoes for a business

venture. They had heard of a group of women manufacturing and selling tomato sweets in a neigh-

boring district, and decided to propose training in a similar trade.

Their group was already established, but it was not active. With no prior experience in the production

Home industries take on new meaning for the unemployedDesa Beleke, Kecamatan Gerung, Kabupaten Lombok Barat

Business: Tomato Sweets

Group Name: Karya Bersama

Group Membership: 30 people (25F/5M)

Funds: Rp. 75,122,000

Estimated increase in income: Currently Rp 560,000 net per month for the group.

Best practices:

Improved villagers’ skills to provide them with employment using local surplus fruits •

Provided a purpose for many group members who were previously unemployed (group empower-•

ment) and group acts as a social glue.

Overcame problems with a BDSP that did not have relevant practical experience•


Thorough evaluations of BDSPs required. Or, learn lessons so that certain BDSPs are not engaged •

subsequently.

Requires further business management skill development•

Limited capital for investment to increase scale•


of sweets, the group relied on their enthusiasm, a desire for purpose in their lives, and the hope that

it would make a profitable business.

PNPM-AP funds were used to provide the group with training, a vacuum fryer, and other small utensils

required for the production of tomato sweets. First they learned about the benefits of working as a

group, group dynamics, and management techniques. The second round of training was focused on

making tomato sweets and using the equipment they had been provided. Unfortunately, the BDSP

engaged to train the group was not appropriately skilled in the practice of making tomato sweets,

and their first batch was unsatisfactory.

‘They had the theoretical knowledge, but I don’t think they knew what they were doing. They had not

factored in how much water there is in tomatoes so the final product was far too sticky and not all that

tasty’ (Group Member).

When it came time for training in marketing and entrepreneurship, PNPM-AP requested that the

BDSP invite a guest speaker to help the women produce a successful batch of tomato sweets. A

businesswoman already making tomato sweets in a neighbouring district was brought in, and the

result was a great success.

‘She showed us how to get the water out of the tomatoes…actually she showed us many tricks…and now

we are able to produce tasty sweets that the villagers all enjoy’ (Group Member).

Home Industries Group.


The group makes a small profit from the sale of their tomato sweets. For every ten kilograms of raw

products, they make two kilograms of tomato sweets. The group calculated that it costs them Rp.

75,000 to make 2kg of sweets (one batch). Their costs include the raw materials, electricity and gas,

packaging and labor. They are able to sell one batch of sweets for Rp 100,000, a net profit of Rp.

25,000 per batch. Currently they are making between three and four batches per week in accordance

with their market.

The group sells their tomato sweets in local kiosks, and to a small-trader from Ampenan who comes

to the village to collect the sweets and then sells them in the market there. They are currently in

the process of obtaining a household industry permit so that they can expand their market into local

shops.

Although their profit margin is small, the group has calculated the cost of labor into their total

expenditure. Therefore, they are able to pay a group member Rp. 20,000 per day spent making

sweets. Employment is on a rotational basis, but other group members still come and help, especially

because they enjoy the social aspect of production.

The group is still trying to establish their guidelines. They have a weekly meeting every Sunday, at

which each member contributes Rp. 1,000 as a type of compulsory savings. The profits have yet to

be divided, but the group hopes to do this at the end of the year, once they can establish how much

capital they require to keep the business afloat.

All of the group members feel satisfied with their efforts; and while they do consider it very impor-

tant that they are not running at a loss, they believe that the group has brought more benefits than

only money:

‘We all used to be unemployed, but now we have a purpose’ (Group Member).

Tomato Sweets


Like the group producing tomato sweets, the Pelangi Group saw the potential for business activities

from fruits growing in their village. They are able to buy fresh fruit for a reduced price particularly

when there is a glut. Rather than see the fruit go to waste, they found a way to process it into a

non-perishable, marketable, tasty snack.

PNPM-AP funds were used to train the group in management, marketing and administration of a

group business, and to purchase a vacuum dehydrator with a 1.5kg capacity. After technical training

the group members have become adept at using and maintaining the dehydrator.

(Right) Dried Fruit Snacks.

(Left) Vacuum dehydrator used to make the snacks.

Desa Geres, Kecamatan Gerung, Kabupaten Lombok Barat

Business: Dried Fruit Snacks (Papaya, Banana & Jackfruit).

Group Name: Pelangi

Group Membership: 30 people (29F/1M)

Funds: Rp. 70,000,000

Estimated increase in income: Currently Rp 240,000 net per month for the group.

Best practices:

Added to villagers’ skills to provide them with employment using local surplus goods •

Provided a purpose for many group members who were previously unemployed (group empower-•

ment) and group acts as a social glue


Requires further business management skill development•

Limited capital for investment to increase scale•


The profit margins remain small, but the group’s enthusiasm is obvious. For each batch of dried fruit

the maximum cost of production was calculated at Rp. 19,000 (fruit, gas, electricity, packaging and

coconut oil)--this does not include the cost of labor. The group sells each batch (five packets) for Rp.

25,000, making a profit of Rp. 6,000 per batch. They generally make two batches a day, five times

a week, for a weekly profit of Rp. 60,000. So far they have had no difficulties finding a local market

for their product.

Roving group members sell the dried fruit to people in the village or in the offices in the subdistrict.

They sometimes receive additional orders. The group also lets local people use the dehydrator in

exchange for a fee, which goes into the group account.

Like the tomato sweet group, they are not in business solely for profit, although they admit that this

is a benefit. For them it has provided a social forum where they are able to get out of the house and

feel part of a group.

‘Before I was in the group I was unemployed…or at the most I would help plant the rice, but that is sea-

sonal. Now, I have the support of my husband to have a business and a social network’ (Group Member).

‘Before we started this business I didn’t have a mobile phone, but now I have one because it is important

for taking orders’

A device used to make the snacks.


Kecamatan Nermada is well known as a rice growing area. High rainfall and irrigation channels allow

for three crops to be grown each year. Before the introduction of PNPM-AP most of the farmers in

the sub-district would plant rice three times a year, using large quantities of urea-based fertilizers.

The constant use of fertilizer was having detrimental effects on their soil, and sharply reducing their

harvests.

Before PNPM-AP was socialized in the sub-district, staff from SADI Subprogram 2 (IFC-SADI)

provided information to the PNPM-AP staff about the possible benefits that farmers in the

district could attain if they considered reviewing their planting patterns to include a secondary crop,

namely peanuts, instead of planting rice all year round. They explained the environmental benefits of

peanuts to the soil: improving soil fertility, and requiring less fertilizer and water than rice. They

also explained that PT. BMT had formed economically viable partnerships with peanut growers in the

district, and was looking to connect with further groups. PNPM-AP staff provided this information to

the farmers during the socialization of the program, and caused them to consider training in peanut

cultivation as an option for their upcoming round of proposals.

SADI (Small Agri-Business Development Initiative) has identified great potential for the re-vitaliza-

tion of the peanut industry in NTB, and farmers groups in the province have begun to respond to

that potential. 21% of all BLM (community funds) from PNPM-AP were prioritized by communities for

Peanuts are given new life as Garuda Food enters the marketDesa Sembung, Kecamatan Narmada, Kabupaten Lombok Barat

Group Name: Karya Tani

Group Membership: 38 members (all male)

Funds: Rp. 63,295,100 (similar amount for each of the five groups in Kec. Narmada)

Estimated increase in income: Rp 1.5 million net per hectare of land.

Best practices:

Tapped into a guaranteed market (PT. Bumi Mekar Tani)•

Regular communication between PNPM-AP and IFC staff (SADI Subprograms 1 and 2) providing •

information about potential market opportunities.

Links between ACIAR (SADI Subprogram 3) and PT. Bumi Mekar Tani to increase productivity of •

peanut yield

Environmental benefits for soil quality (changed planting patterns)•

Sustainability of enterprise•


Further guidance from PNPM-AP staff would ensure smooth transition to partnership with •

PT. Bumi Mekar Tani.


improving the peanut industry in the province. Sixteen villages and five groups in Narmada received

PNPM-AP funding for training in the cultivation and marketing of peanuts.

Two different BDSPs were selected to help groups to develop demonstration plots, provide technical

training, and guide the five groups in Nermada in the cultivation of peanuts. Both BDSPs are private

institutions staffed by lecturers from the Agricultural Faculty at the University of Mataram. In order

to ensure that their training aligned with each other and that the peanuts they produced met PT.

BMT industry guidelines, they received some guidance from IFC and PT BMT before they met with the

farmers groups.

PT. BMT provided the BDSPs with the peanut seeds for their demonstration plots. The seeds are of the

three-pod variety as opposed to the local two-pod variety, and provide a better yield per hectare. The

groups used organic fertilizers in their demonstration plots in addition to urea-based fertilizers to

compare results. They achieved good output, and were able to sell their yield to PT. BMT. From these

sales they have already accumulated Rp 1,350,000 in their group account as basic capital.

The farmers now understand the benefits of growing a secondary crop between rice crops; it

improves soil quality, reduces reliance on urea-based fertilizers,and reduces the diseases and pests

Peanut Harvest.


that would normally attack their rice crops by breaking their food chain. All this should result in

better rice yields in the future.

Although the farmers are only now preparing to plant their secondary crop of peanuts, they have

done some rough calculations of how their new planting patterns should effect their annual income.

They calculated that their net income from growing rice three times a year on one hectare of land

was in the vicinity of Rp 8 or 9 million. Taking into account their guaranteed market with PT. BMT,

they have caluclated that their net income growing rice twice a year and a secondary crop of peanuts

would be in the vicinity of Rp 10 or 11 million.

‘The profit margin will only increase if we use this method of farming because we won’t have to spray

for diseases and our rice yield should be better because of the peanuts effect on the soil. It’s a win-win

situation’ (Group Member).

The farmers calculated their estimated expenditure for growing three crops of rice annually at Rp

7.5 million. This includes the cost of fertilizer, land preparation, seedlings, SP36, weeding, spraying

and insecticides. Meanwhile, they calculated their annual expenditure for two crops of rice and a

secondary crop of peanuts at Rp 7 million.

Estimated Gross Income Growing Rice 3 x Annually on 1 hectare of land

Estimated Gross Income Growing Rice 2 x and Peanuts 1 x Annually on 1 hectare of land

First HarvestSecond HarvestThird Harvest

First Harvest RiceSecond Harvest PeanutsThird Harvest Rice

Yield (tons)

4

2.5

4

Yield (tons)

4

2.5

4

Price per ton (Rp)

2 million

2 million

2 million

Price per ton (Rp)

2 million

2.6 million

2 million

Personal Consumption (tons)

1

0.5

1

Gross Total

Personal Consumption (tons)

1.5

0

1

Gross Total

Gross Total (Rp)

6 million

4 million

6 million

16 million

Gross Total (Rp)

5 million

6.5 million

6 million

17.5 million


In addition to training in the cultivation of three-pod variety peanuts and the practical experience

gained in the demonstration plots, the Karya Tani Farmers Group were also provided with a hand

sprayer and hand tractor. Both group members and other farmers are able to rent the tractor and

operator at a cost of Rp 800,000 per hectare of land tilled. The funds are accumulated in the group

account and profits are divided: 33% for the tractor operator, 33% for tractor maintenance and

repairs and 33% for group savings. At one of its regular monthly meetings, the Karya Tani Group

decided that before any profits from the hand tractor are divided they will first purchase a cart to

make transporting the tractor from field to field more convenient.

The Village Head of Sembung is impressed with the progress of the Karya Tani Group. He is pleased

that the group is starting to use organic fertilizers in place of urea-based fertilizers, and has also

become conscious of behavioral changes in his community.

‘If we look at the program it can already be considered a success. At the very least it has changed the

mindset of the farmers. Now they don’t just keep planting rice, rice, rice but they also interchange their

crops with a secondary crop…we’re still using urea, but more and more we are moving towards compost’

(Village Head, Desa Sembung).

PT Bumi Mekar Tani Field Representative discusses

a disease found in one of their crops with ACIAR

researcher


Profile of PT. Bumi Mekar Tani (Garuda Food)

Garuda Food is a food and beverage company within the Tudung Group. Tudung Group contains a

number of other companies, including PT Bumi Mekar Tani, which deals with the plantation sector. The

Group sells its peanut products using the KacangGaring Garuda brand, which is referred to as Kacang

Garuda. In 2005, following an investigatory mission, the Group set up a sub-branch in NTB.

In 2005, 36,000 hectares of land across NTB were planted with peanuts. The total has dropped in the

last five years, following the introduction of rice incentive schemes by the Indonesian government.

Prior to Garuda Food’s presence, many farmers in NTB grew the local two-pod variety of peanuts,

and dried the nuts themselves before they were sold. At that time, farmers had limited knowledge of

aflatoxins, potentially carcinogenic molds that can attack peanuts that are stored in damp conditions

or for long periods.For this reason PT. Bumi Mekar Tani has gone to great lengths to carry out research

into aflatoxins, and to educate potential peanut farming groups of the importance of correct growing

and storage techniques.

PT. Bumi Mekar Tani has formed numerous partnerships with farmers in West Lombok. The company

provides the farmers with three-pod Bima variety seedlings as a loan, to be repaid at the harvest. They

also provide a guarantee, in the form of an MOU, that they will buy peanuts from the farmers groups for

a specified price, provided that the peanuts are delivered within 24 hours after harvest. Prices for basic

quality and premium quality peanuts are determined from the outset.

PT. Bumi Mekar Tani also sends out roving ‘agricultural extension workers,’ who provide a trouble-shoot-

ing service for the farmers.

PT. Bumi Mekar Tani is working closely with ACIAR (The Australian Center for Agricultural Research) to

improve their technology. In 2008 ACIAR began research on the ‘Productivity and Profitability of Tropical

Pulses in Indonesia.’ The aims of the study were to review new varieties and cost-efficient management

practices, look at efficient and sustainable seed system strategies and form functional collaborations,

building partnerships between institutions. ACIAR researchers often meet with PT. Bumi Mekar Tani to

discuss their results and have been known to visit PT. Bumi Mekar Tani demonstration plots to provide

agricultural advice. As one representative from PT. Bumi Mekar Tani explained, ‘by working with ACIAR

they hope that they can improve productivity levels.’

PT. Bumi Mekar Tani is also starting to establish partnerships with peanut growing groups in Dompu in

Sumbawa. One PNPM-AP group from Mangalewa is in the process of setting up an MOU with PT. Bumi

Mekar Tani. As part of the arrangement, PT. Bumi Mekar Tani will transport the peanuts to Mataram.

Also, the group has cultivated the seedlings that were initially provided by PT. Bumi Mekar Tani for their

demonstration plot so that they do not have to continue to purchase the seedlings from Mataram.


SULAWESI TENGGARAKabupaten Konawe Selatan

The new Farm Kiosk in Desa Pompulaa Jaya owes its success to the cooperation of different farmers

groups and agricultural programs operating in the area.

PNPM-AP provides support for an open menu of activities, but not to purchase stocks for retail. This

is not the case for PUAP (Village Agri-business Development Program,) which is managed by the

Department of Agriculture. PUAP funds are also restricted: beneficiaries may not use PUAP funds for

infrastructure.

One of the biggest challenges for farmers in Desa Pombulaa Jaya and the surrounding villages is a

shortage of agricultural supplies, including fertilizers, pesticides, herbicides and seeds. They often

have to travel to Kendari to buy supplies, at a cost of both money at time. There is no guarantee that

the supplies will be available when the farmers go to town.

‘It costs me Rp 5,000 for the trip to town and then another Rp.10,000 to return to the village with my

supplies because I have to pay for space in the van for my goods,’ one farmer explained.

When PNPM held a forum to identify potential ideas for improving agriculture, the farmers cited

the shortage of agricultural supplies near their village as a major problem. PNPM facilitators and

the extension workersfrom PUAP were both in the sub-district at the same time, trying to identify

potential options for agri-business support. The community facilitators arranged for the PUAP

extension workersto participate in their meetings.

A farm kiosk makes life easier in Kecamatan KondaDesa Pombulaa Jaya, Kecamatan Konda, Kabupaten Konawe Selatan

Group Membership: over 60 members (combined farmers groups)

Funds: Rp 59,465,200 (PNPM-AP)

Approximately Rp 80 million (PUAP)

Best practices:

Strong facilitation of PNPM-AP staff identifying opportunities for collaboration.•

Linkages and cooperation with Local Office of Agriculture PUAP program and PNPM-AP.•

Provision of alternative means to loans reducing reliance on loan sharks•

Improved access to farming provisions for members and non-members (guaranteed supply)•


Lack of organic products in the kiosk (requires further guidance to introduce more organic products)•


Following the discussions, the villagers submitted a proposal integrating the two programs: PNPM-

AP would provide funds to construct and furnish a farm kiosk on land donated by the community;

PUAP would provide the initial capital for the purchase of agricultural supplies to stock the kiosk.

Construction began in November 2008, and the kiosk was opened in February 2009. The group

organized itself into a formal cooperative and is able to obtain government subsidized supplies, as

well as buying regular commercial supplies from distributors in Kendari.

The benefits of the kiosk have been numerous for both members and non-members. Members

are able to buy agricultural supplies in small quantities, something that they were unable to do

previously: ‘they weigh the seeds in front of you. In other places they are pre-packaged in larger amounts…

everything is better with this kiosk,’ explained one customer.Farmers no longer need to travel long

distances without knowing whether the supplies they are looking for are going to be available.

Members are able to use a credit system to purchase agricultural supplies: if they do not have the

expendable cash at planting time, they can take the products first and pay for them within three

months after the harvest, with only a small amount of interest. For example, a bag of fertilizer costs

members Rp 65,000 if they pay in cash, or Rp 85,000 if they use the product first and then pay the

money within a three month period. The system allows farmers to avoid loan sharks, who often lend

money at much higher interest rates. According to the group leader no member has yet defaulted on

a loan.

Farmers Kiosk.


Non-members can also purchase agricultural supplies at the kiosk, but are required to pay in cash.

One villager from a neighboring village who arrived at the kiosk to purchase fertilizer explained that

he had come to the kiosk, ‘because even though the price of the fertilizer is a little higher than at a large

distributor in Kendari, the savings on transportation costs makes it worth it.’ He also said that he did not

need to produce a letter to obtain the government subsidized fertilizer from the kiosk.

The kiosk has been making a small profit from the sale of agricultural supplies. At present, 60% of

profits go to operational costs and the other 40% to increase the capital and buying potential of the

kiosk. When asked about future profits, the head of the group said that they will be used to benefit

the farmers group.

The only shortfall of the endeavor is that the kiosk is yet to stock any organic products. Over time the

PNPM-AP facilitators will work with the group to ensure that they can increase the organic products

available at the kiosk.

Non-member purchases produce at the Farmers Kiosk.


Kabupaten Muna

Wambona is a farming village where various types of bananas, a hybrid variety of corn, and tree crops

such as cashews, coconuts and cocoa are grown. Until recently, many villagers had difficulty access-

ing their land in the surrounding hills as there was no road; just scrub and overgrowth. Farmers could

pass by on foot, but they found it very difficult to transport their farming tools and equipment to

their land, or to carry their produce back to the main road – an almost impossible task in the rainy

season, when the scrub was thick and the grounds slippery. Stories of corn being ruined in the fields

were commonplace.

PNPM-AP funds were used to clear a path through the scrub and build a two meter wide dirt road

for 2.3km into the hills. An excavator and grader were hired from Buton to clear and construct the

road – the local government had recently brought the heavy equipment from Buton for work on the

main road through the village, and the PNPM-AP team was able to use the same equipment once the

scheduled road work had been completed.

Initially, the work was scheduled to be finished in a month, but heavy rains delayed the process. Two

sets of cement pipes and four small cement culverts were added along the lower sections of the road

for drainage.After two months of work, the road was completed in February 2009.

A farmers road provides new opportunities for the communityDesa Wambona, Kecamatan Warkosel, Kabupaten Muna

Group Membership: whole village proposal

Funds: Rp 133,317,895

Estimated increase in income: Millions of Rupiah annually for the surrounding the community who

reopened their once dormant land.

Best practices:

Good coordination by PNPM-AP staff with local government.•

Improved access for farmers to the main road has helped them access the market•

Cooperation with PNPM-MP will overcome difficulties that have arisen with the road in the rainy •

season (they will lay a top surface on the road)

PNPM staff aware of potential environmental impacts of clearing and are prepared to educate the •

community and monitor the situation.


Environmental Caution – community requires continued education about erosion so that they do not •

open virgin forest on the steep slopes of the hills which have been made more accessible with the

new road.


The road allows access to about 300 hectares of land. Individual farms are generally between one

and five hectares in size. Much of the land had been cleared previously for the national ‘yellow corn’

initiative launched by the government almost ten years ago, which promised farmers high returns

for their corn. Local farmers planted corn throughout the area and produced very good yields--so

much so that one village representative was taken to Kendari to receive an award. But the farmers

had no way of transporting their produce to the market except to carry it over their shoulders--not a

viable option for hundreds of kilograms of corn. Therefore, their corn went to waste, and the returns

promised by the government never materialized. Since then they have left a large portion of the 300

hectares of land dormant.

Since the construction of the road the farmers have become active again, clearing their dormant land

and planting a variety of crops, especially bananas. The farmers take the bananas to Raha, the district

capital, to sell in the markets. Now the farmers are able to transport their produce from their farms

either by motorbikeor with carts.

Farmers interviewed in their fields alongside the new road explained some of the benefits they felt

from the opening of the road:

‘…I have three hectares of land close to the new road, but I live down on the main road. Before the road

went in I only utilized one hectare of my land and the rest lay dormant. It was just too difficult to get in

and out, especially once I had harvested my crops.’ (Banana/cashew farmer)

Entry to the Farmers Road from the Main Road.


‘Before the road went in we would half kill ourselves carrying our bananas out to the main road. Now we’ll

be able to get them out in carts or on motorbikes when it comes harvest time. I’ve even built a little hut

on my land out here so that I can stay here and protect my produce from pests (wild pigs). Lots of other

farmers are starting to do the same as they reopen their land.’ (Banana farmer)

The only problem with the road has been in the wet season. When there is a large rainfall the

road becomes muddy and difficult to use. For this reason, the community has put in an additional

proposal to PNPM-Mandiri to have the road resurfaced with compacted gravel. Their proposal has been

approved, and they are set to receive Rp 112 million to improve 1.1km of the road.

The success of the road has inspired villagers in another location to propose an additional 3km road

be constructed using PNPM-Mandiri funds to help farmers transport their produce in and out of the

village.

While the benefits of the road are numerous, PNPM needs to proceed with caution. More roads into

the village interior will allow access to not only dormant land, but also virgin land with impor-

tant forests. Assessments of erosion should be completed and the community educated if further

proposals continue along this vein.

Traditional Means of Transporting Bananas.


NUSA TENGGARA TIMURKabupaten Timur Tenggara Selatan (TTS)

Desa Tutem is located near the top of a mountain range in Kecamatan Mollo Utara. The road lead-

ing down to the capital of the sub-district is in disrepair, making access to the village difficult.

Most people make the precarious journey by motor-bike, raised four wheel drive vehicle, or truck.

Transport, especially of goods, is a major obstacle for the business prospects of the villagers.

Most of the people who live in the village are farmers. They are fortunate to have a rain-fed spring in

the village, which allows them to plant crops for at least half of the year. The village contains small

pockets of rice growing land, which yield one crop per year; but for the most part, the villagers grow

corn, red beans and vegetables such as tomatoes, cauliflower and carrots.

The Firdaus A. Farming Group was established in 2004. The group is made up of fifteen men who

work as a collective on a number of different activities, including the collection, marketing and sale

of honey, and the cultivation of small horticultural crops. Eight of the group members also had one or

two head of cattle before the introduction of PNPM-AP. They reared their cattle using the traditional

techniques; the cattle roamed freely, foraging for food.

Cattle fattening in the hills of TimorDesa Tutem, Kecamatan Mollo Utara, Kabupaten TTS

Group Name: Sapi Firdaus A.

Group Membership: 15 members (all male)

Funds: Rp. 58,302,105

Estimated increase in income: Potential income generator (requires additional time to make a definite

assessment, but projected figures clearly suggest increased income for group members). Estimated profit

on four bulls of Rp 7.6 million over 6 months. Funds to be reinvested in more cattle.

Best practices:

Developed skills in the beneficiary group enabling them to use modern methods for fattening cattle•

Utilized a solid, pre-existing group•

Group learned how to make organic fertilizer from by-products of cattle (reducing the use of chemi-•

cal fertilizers)

Group learned how to cultivate different types of forage for cattle feeding•

Local Office of Livestock helped the group set up a bio-gas plant to utilize the by-products of cattle•

Strong team of facilitators ensured sound group regulations formulated•


Group requires further guidance in developing and implementing group rules and regulations•


The group asked PNPM-AP for training in more modern cattle fattening techniques, because they had

heard of the potential financial benefits of these programs. They also felt that the local spring would

make it easy for them to grow the additional forage required to fatten their cattle.

The PNPM-AP grant enabled the group to buy four young bulls. Bulls were chosen because of their

potential to reap a higher price than cows. The group was provided with gloves, plastic boots, and

implements to clean the pens, and a scale to weigh the cattle feed. In addition, they were given train-

ing by the Community Development Foundation on the technical aspects of raising cattle, including

building pens, planting cattle forage, uses of manure, and information on marketing.

In addition to the four bulls bought with PNPM-AP funds, the group also purchased a fifth bull using

their combined group funds. Two of the bulls purchased were aged 18 months and cost Rp 2,900,000

each. The other two bulls were three years old at the time of purchase and cost Rp 3,300,000 each.

The upkeep of the cattle is inexpensive; the Local Office of Livestock provides free vaccinations for

cattle on an annual basis, and the group members are able to collect and grow enough forage for

their cattle that they do not have to purchase cattle feed.

The group has already planted a number of different types of grasses and legumes around their

houses which they can use to fatten their cattle. They weigh the food each day to ensure that they

are getting above the minimum requirements for sound cattle growth. Members of the group take

turns to collect forage, feed the cattle, and clean the cattle pens.

The Firdaus A. group has started to consider their cattle fattening activity in terms of a business as

opposed to a safety net, whereby cattle are sold to fulfill unexpected day to day living expenses. One

group member explained:

(Right) Member at the cattle.

(Left) Group Sign.


‘we paid Rp 12.4 million for the four bulls and we have agreed that we won’t sell them for less than Rp

20 million for the four. I don’t think we will have much trouble getting this because our cattle have grown

steadily. I think we’ll be able to sell them about March if the market is right’.

Due to difficulties with transport, the group will sell their cattle together and the vendor will trans-

port them from the village.

The group has rules and regulations pertaining to the management of their cattle. They have a formal

meeting on the 30th of every month where decisions are made. The group also provides a structure

for saving: each member pays a compulsory Rp. 2,000 fee per month, in addition to a voluntary

deposit. These funds can then be borrowed by group members and paid back at a set interest rate.

From Subsistence to Business

The target beneficiary group for the PNPM-AP program floats somewhere between the extreme poor and

the poor. Some groups still live a subsistence lifestyle, living from day to day without adequate income

to save and pursue long-term goals. Other groups are able to find a means to survive, overcome small

set-backs, and make the most of business opportunities that can take some time to achieve results.

Cattle are generally seen as a sign of wealth in NTT, or as a safety net for families. In this capacity, cattle

is normally sold in times of need – not necessarily when the market is best. A crop failure or an adat

(traditional) ceremony such as a wedding might be an occasion for selling cattle. It is difficult for small

cattle holders to change their pattern of thinking to a more business orientated approach, where the

market determines when the cattle are sold.

Watering system.


Although they haven’t sold their cattle yet, they have already agreed that the majority of the funds

from the sale of the four bulls will be used to purchase four more calves; the remaining funds will

be put back into the group funds for unexpected costs and for use as loans.

There have been value-adding benefits of this activity in the village. During the training course the

group learned how to use their cow manure as fertilizer on their vegetable plots. Now, they spread

manure on these plots instead of chemical fertilizers.

In November 2009, the Local Office of Livestock began building a small bio-gas plant behind their

livestock pens so that the manure could be used to power their stoves. The plant is still under

construction, but they hope that by early 2010 they will be able to utilize the gas for cooking

purposes.

Group’s Bull.


Kabupaten Ngada

Coconuts are grown in abundance in Desa Warupele II. They are used to make copra, a basic type of

cooking oil, and a food supplement for the pigs that many villagers raise. Before PNPM-AP was intro-

duced in the sub-district, the villagers had never considered making VCO (Virgin Coconut Oil); they

thought the process was complicated and required additional technology, and did not know where

they would be able to learn how to do it. Still, they had a strong desire to make use of their surplus

coconuts for additional profit.

Initially, six farmers’ groups were approved for training in the process of making VCO. However, it

was unclear whether the market would initially be able to support such a large amount of VCO, and

there were sufficient funds to buy only one set of equipment and train approximately 20 people. For

this reason, representatives from each of the six groups were selected to attend the training. These

representatives formed their own group, and named it Harapan Bersama. The group representatives

were purportedly going to transfer their knowledge to the other members of their groups. However,

as the market for VCO strengthens, the core group is becoming increasingly guarded, and is refusing

to divulge their knowledge for fear of losing their market.

Prior to PNPM-AP the villagers made coconut oil to sell at the markets using manual techniques,

by heating the oil over an open flame. The resulting oil suffices for local cooking needs, but it is

not high quality and goes rancid in less than one month. With PNPM-AP the core group received

machines to shred and press the coconuts, reducing the manual labor required in the process. They

Virgin coconut oil – a remedy for all?Desa Warupele II, Kecamatan Aimere, Kabupaten Ngada

Group Name: Harapan Bersama

Group Membership: 20 members (3M/17F)

Funds: Rp. 14,046,375

Estimated increase in income: Rp 1,560,000 net per month for the group. This will increase with production.

Best practices:

Utilization of surplus coconuts •

Added skills to the beneficiary group, enabling them to make a marketable quality product in addi-•

tion to their traditional coconut products

Increased income without jeopardizing current income sources•


Requires additional guidance to ensure responsible product advertising•


also received training in the production of VCO in July 2009 from the cadre at the Village Community

Empowerment Agency (BPMD) over two days.

VCO is made by repeatedly refining the top layer of coconut cream that has been left to stand. The

final product is transparent oil. The process also creates by-products: a small amount of high quality

cooking oil, and coconut shreds, which the group members feed to their pigs.

VCO is emerging as a profitable sideline business for the group. They continue to make basic coconut

oil three times a week using traditional methods, and now supplement their income with the sale of

VCO. In one week they are generally able to sell 24 bottles (750ml) of traditional coconut oil for a

total of Rp 144,000. In addition, in one week they are also able to sell 36 bottles (50ml) of VCO for

a total of Rp 360,000. During the VCO preparation they also make two bottles (750ml) of high quality

cooking oil which they sell for a total of Rp 20,000 as well as coconut shreds which they sell for Rp

10,000 – all by-products of the process. The only real expense incurred during the VCO production

process is the cost of sterile 50ml bottles, which are bought for Rp 250,00 each.

The group is currently awaiting product certification from the Provincial Office of Health, which

would allow their product to be sold in shops. They already have requests from pharmacies in Bajawa

as well as shops in the sub-district who want to market their product. For the time being they have

been able to sell their VCO at the local marketwithout any difficulty.

Training in the Production of VCO.


The Head of the group explained:

‘our hope is that we will be able to increase production so that this can take priority over our other jobs

and chores. I really believe that we will be able to sell thousands of bottles, especially now that we have

our regular customers that just keep coming back.’

‘We were hoping that if PNPM-AP was going to be implemented in 2010, then one of the other groups

could learn how to make things from the coconut shells and husks, for example, brooms or decorations…

at the moment these parts of the coconut just go to waste.’

While the group has not received any specific management training, the FK has provided some

guidance. The rules and regulations of the group are currently under discussion. Some elements were

decided from the onset; for example, the group purchases coconuts for Rp 1,000 a piece from each

of the group members. All other profits have gone into the group account as a type of compulsory

savings. At the end of the year they will discuss how the funds will be divided. The group also intends

to maintain a group fund to cover unexpected costs, such as maintenance of the machines.

Group Members sell their traditional coconut oil at the local market.


Hmm… False Advertising?

It is not unusual for local Indonesian products to claim preposterous benefits from their use. Generally, this

will do little harm; but it can be dangerous if a community starts to replace medically proven treatments

with placebos.

VCO definitely has a number of uses, including as a hair tonic or body moisturizer, and also has shown some

health benefits from its consumption. The health benefits might be numerous--but there is currently some

unresolved debate among the academic community in regard to this issue.

The BDSP provided to the group with a worksheet which explained the benefits of the consumption of

VCO in small quantities on a regular basis. Currently, the group advocates the use of VCO to treat diabetes,

obesity, heart disease, osteoporosis, influenza and HIV/AIDS among other ailments. Until there is conclu-

sive scientific research the group needs to be aware of how they advertise their product.

In this regard, it is important for PNPM to continue to guide the group, and advise them on how best to

market their product in a way that does not suggest that VCO is a cure for certain diseases.

VCO and the tools.


The Merumawe group has been in existence for the last decade. The group is actually part of a larger

collective of farmers’ groups from around the area. The group’s main activities include growing

coffee, raising livestock, and providing savings and loan services for members. Prior to the introduction

of PNPM-AP the group rarely received any guidance from the government agricultural extension

official, whose time was divided between five villages and dozens of farming groups. For this reason

they put in a proposal to PNPM-AP for training in coffee cultivation and post-harvest processing.

Each of the members of the group owns or rents between ¼ – 3 hectares of land planted with

Arabica coffee. Traditionally, they planted coffee in sporadic patches and left the coffee plants to

grow uncared for. To cultivate new plants they would dig up seedlings that had germinated under

the trees. Their harvesting technique was also uninformed; picking the green, yellow and red beans

all at once, giving no thought to selection of beans. They were skeptical that selection of seedlings

and additional care to their plants would produce better quality coffee plants or improve their yield.

Until they witnessed the process and saw the results for themselves, they were not prepared to

change their traditional practices.

In 2009 the group received hands-on training from the Civil Society Advocacy Foundation in Ngada

using PNPM-AP funds to improve their cultivation techniques. After two days of theoretical training

they received practical training, learning how to select prime seeds and seedlings, germinate seeds,

and raise them in pots before planting them out in their fields. They also learned how to prune their

trees to increase their coffee yield and simplify harvesting. In addition, they were given information

on recommended distances between plants, suggestions of companion plants that can be planted

below the coffee trees that will not cut out the sunlight, and training in the harvesting and selection

of quality beans.

New coffee cultivation techniques make for higher pricesDesa Raka Laba, Kecamatan Golewa, Kabupaten Ngada

Group Name: Merumawe

Group Membership: 25 members (10F/15M)

Funds: Rp. 27,638,000

Estimated increase in income: requires more time to determine monetary value of the activity.

Best practices:

Utilization of pre-existing group •

Up-skilled the beneficiary group to utilize modern techniques for coffee cultivation to increase their •

yield and quality of product

Potentially increased incomes with utilization of improved techniques•


Requires additional guidance to improve marketing•


PNPM-AP funds were also used to purchase two machines for post-harvest use which remove the

outer shell of the coffee beans and the skin from the kernels. Beans that have undergone this simple

processing can be sold for a higher price.

In order to convince the group of the benefits of the training and to encourage them to put them into

practice, the farmers were taken to another area where the new techniques had been implemented

over several years.

Since then, the farmers have changed their cultivation techniques in accordance with their training.

All of the farmers have pruned their once neglected trees, and are implementing selective harvesting

methods, improving their yield and the sale price of their beans.

The results are already starting to emerge. In the past, the group members would sell their coffee to

small traders who would come to the village to collect the coffee. They sold 1kg of unshelled beans

for about Rp 1,500 per kg and 1kg of shelled kernels (using a traditional processing technique) for

Rp 7,000. Now they sell their unshelled beans to the Management Unit (which is still part of the

group) for Rp 3,000 per kg. The Management Unit (UPH) then shells the beans and sells the kernels

for Rp 24,500 per kg. Using this method, six kilograms of unshelled beans translates to one kilogram

of shelled kernels. The Rp 6,500 profit made on the sale of each kilogram of kernels sold by the UPH

is returned to the group.

For the time being, the UPH sells their coffee to a buyer who exports it to Surabaya, and possibly

overseas. The process was facilitated by the Local Office of Plantations. The group members are

Seedling Nursery.


considering new strategies to increase the price of their coffee. They are discussing the possibility

that all the UPH in the region could work together to increase their bargaining power and develop

an improved marketing strategy. Accessing the market is their biggest obstacle.

In addition to the value-adding benefits of the new technology they received from the program and

their new understanding of bean selection process, the other lessons that the farmers have learned

should increase their coffee yield. The head of the group explained:

‘In a good harvest we used to produce about eight tons of beans from one hectare. Now, if everything goes

right we hope to produce about twelve tons per hectare…even though the whole process means a bit more

work for us it is all worth it in the long run.’

The group has regular monthly meetings and a bank account for the group funds. At the moment,

the additional funds produced from the sale of the kernels by the UPH are put into the account. The

group has yet to determine how they will use these funds, but expect that some of them will be used

for maintenance of their machinery and some of them will be saved for hard times.

Coffee Beans and Kernels.


General Insights andProgram Considerations

The actual PNPM-AP process (for planning, implementation, fund disbursal and acquittal) was •

easy for the communities to manage, as it followed the established PNPM-MP process. However,

the PNPM cycle does not coincide with the agricultural cycle--funds are typically dispersed at

the onset of the dry season, when productivity is at its lowest. In areas where there is limited or

no irrigation, particularly in Sultra and NTT, the disbursal of funds at the beginning of the dry

season posed an obstacle for the program. For example, some demonstration plots had to be

grown out of season to accord with the disbursal and acquittal of funds.

Research over more than one program cycle would provide a more consolidated picture of •

the real benefits of PNPM-AP. Multiple years would have provided the PNPM-AP staff further

leverage for guidance and direction of groups. Further efforts could have been made to improve

linkages with the three SADI subprograms, which began at different times. Furthermore, sustain-

ability of activities and development of group protocol and regulations would be better assessed

at a later date, as many activities are only relatively new (1 – 6 months).

Estimates of increased income resulting from PNPM-AP inputs provided in the case studies were •

difficult to calculate because many of the activities are relatively new, and like any business ini-

tiative they require time to establish themselves. Estimates are based on current data provided

by the group, but many groups are still trying to determine their production capacity and market

demand.

There is no reason why the activities included in this report are not sustainable, provided that •

the groups remain enthusiastic and continue to benefit from their activities. PNPM-Mandiri

could provide some support now that PNPM-AP has been completed. Similarly, farmers can look

for financial support from PNPM-MP rural grants.

There was a lack of coordination and understanding of PNPM-AP by provincial and relevant •

government agencies and the BAPPEDAs in some districts. PNPM beneficiaries praised the pro-

gram for its transparency and its ability to channel funds in a timely manner to the grass roots,

often alluding to some of the difficulties other government service agencies have with this

process.

From limited discussion with provincial and district level government representatives in South •

Sulawesi, it appeared that they did not wholly understand that PNPM-AP is being overseen by the

Office for the Coordinating Ministry for People’s Welfare (Menkokesra) and implemented by the

Ministry of Home Affairs (PMD) at the central level and by the Community Empowerment Agency


(BPMD) at the provincial and district levels, utilizing a community driven development approach.

For this reason, coordination amongthe BAPPEDA and heads of relevant government service

agencies was weak, at the very least they should understand the process used by PNPM. One

reason for this is the high turn-over of staff in government offices, making continuity a problem.

However, in contrast the NTB local government had a good understanding of the program and •

showed strong support for it.

The BDSPs are a contributing factor to the performance of the activities. A good BDSP with •

practical experience and an established link to the market can overcome potential obstacles.

Theoretical experience is not sufficient – practical experience is required. Any current evalu-

ation and documentation of performance of BDSPs to date would be of use for future programs

if a similar mechanism for contracting out training is to be implemented in the future.

There is a definite niche for agri-business initiatives at the dusun/village/sub-district level, and •

strong desire and support from the community and local level government representatives.

Strong group leadership is paramount for success, as are skilled facilitators who can encourage, •

guide and monitor the groups. High turnover of PNPM-AP support staff in some districts proved a

challenge for the program. For example, in Amanuban Selatan in TTS, the Kecamatan Facilitator

has changed eight times since the onset of the program. This has meant there is no continuity

for the groups to develop relationships, or receive guidance and supervision.

If agri-business activities are going to be absorbed and included into PNPM-MP, thought needs •

to be given to the process. An ‘open menu’ for PNPM-MP which allows for group agri-business

proposals would be futile as group agri-business proposals would not stand up well against

village infrastructure activities.


ANNEX 1

GENERAL INDICATORS OF PNPM-AP ACTIVITY SUCCESS

• Community participation – including women

(including disaggregated data on group membership)

• Sustainability (whether the activity will continue without continued input from PNPM-AP)

• Increased agricultural production (data on production pre and post PNPM-AP)

• Capacity building (including up-skilling of group member)

• Entry into the market or improved access to the market

(provision of market advice, facilitation of linkages between groups and market)

• Linkages with other programs

(PNPM-AP with other government programs or other SADI sub-programs)

• Provision of employment (comparison pre and post PNPM-AP)

• Increased income for group members (cost analysis pre and post PNPM-AP and evidence of

improved household income or living standards).

• Other program benefits

(provision of a purpose for unemployed group members or provision of a social forum)

• Development of strong relationships between PNPM-AP staff and group

(evidence of good facilitation and guidance from PNPM-AP staff ).

• Local government support


ANNEX 2

GENERAL INTERVIEW QUESTION GUIDE

Introduction – names etc. purpose of the visit (i.e. to see first-hand some of the successful projects

that have resulted from PNPM-AP and document them so we can learn from their experiences).

1. What are the main agricultural products grown in this area?

What do group members grow/cultivate?

2. Can you tell me about your group and how you got involved in PNPM-AP?

How many people are in your group? Men/women? Young/old?

3. What did your group do (activity)?

- Total funds from PNPM-AP? - When did you receive the funds? Did you receive them on time?

- How was the money used?

- Calculations of the costs involved

(what did you have to buy to get it started? other costs involved?)

- Why did you propose the activity?

- How did you complete the activity?

(was anyone else in the community involved / training organizations/NGOs/

government/facilitators/private industry?)

Did you receive any help from facilitators at the village/kecamatan level

or anyone else?

- What have the results of the activity been?

Have you been able to sell/use your product? (cost analysis)

- Do you feel like it has been successful and how has it improved your day to day life?

(examples)

- Are you going to continue the activity in the future?

- Has anyone else taken up the activity as a result of your success?


5. What difficulties did you face in carrying out the project and how did you overcome them?

6. What was the situation like for you and other people in the village before you started this activity?

Do you feel happier now? Why?

7. Did you feel like the process to obtain funds was simple?

8. Do you think that there would have been another alternative to get funding for your activity

if PNPM-AP hadn’t of existed? (eg from village funds or other sources of funding?)

9. What are your general impressions of PNPM-AP?


ANNEX 3

SCHEDULE OF FIELD VISITS

DATE

31/10/09 – 2/11/09

5/11/09

6/11/09 - 7/11/09

8/11/09

9/11/09

10/11/09

11/11/09

12/11/09

13/11//09

17/11/09

18/11/09

19/11/09

24/11/09

25/11/09

6/12/09

7/12/09

8/12/09

10/12/09

11/12/09

12/12/09

22/12/09

23/12/09

SCHEDULE

PNPM-AP Workshop (Jakarta)

Travel to Kendari (Sultra). Interview with Korprov.

Travel to Kab. Konawe Selatan (Sultra). Organic fertilizer group, farmer’s kiosk and horticultural training group. Interview with NGO LekMIL.

Travel to Kab. Muna (Sultra). Seaweed cultivation and drying rack group.

Kab. Muna (Sultra). Farmer’s Road, Fishing group.

Travel to Kendari. Interviews with BPMD.

Travel to Makasar (Sulsel)

Travel to Kab. Bantaeng (Sulsel). Seaweed cultivation group and ‘Super’ chicken group.

Kab. Bantaeng. Organic compost and coffee groups. Travel to Makassar.

Travel to Mataram (NTB).

Travel to Lombok Barat (NTB). Interviews with ACIAR representatives and government staff, peanut groups and organic compost group.

Interviews with PT. Mekar Tani representative, small home industry groups and Padi SRI group.

Travel to Kab. Dompu (NTB). Interviews with tofu/tempe and well groups.

Half day PNPM-AP evaluation workshop with government. Interviews with seaweed and peanut groups.

Travel to Kupang (NTT)

Travel to Kab. TTS. Interviews with chicken and cow groups in Ambanuban Selatan.

Travel to Kec. Mollo Utara. Interviews with cow and horticultural groups.

Travel to Ende and Bajawa (Ngada). Workshop with BPMD.

Travel to Kec. Aimere and Kec. Golewa. Interviews with VCO, Farmer’s road and coffee groups.

Travel to Ende and Denpasar

Travel to Makassar (Sulsel). Presentation to Bappeda.

Travel Makassar-Jakarta

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