Supporting Smallholder Coffee Farmers in Bali: Connecting Farmers to New Market

Coffee is one of Indonesia’s largest export commodities. According to the Bureau of Statistics, Indonesia exported 279,961 tons of coffee with a value of US$ 815 million.¹ The socio-economic value of coffee is considered high in the country since 96.6 percent of coffee plantations are owned by smallholder farmers.

Bali is the tenth largest coffee producing region in Indonesia with approximately 71,857 coffee smallholder farmers. Tabanan regency, where the most production of coffee in the province takes place, has approximately 17,387 smallholder farmers.²

The COVID-19 pandemic and increasing demand for Robusta coffee provide an opportunity for Tabanan people to return to farming as a sustainable income source.

The agriculture sector plays a significant role in Indonesia’s economy (contributing 13% to annual GDP in 2020), the nation’s 18 million smallholder farmers remain as disadvantaged actors in the agricultural chain.³ Despite their significant economic contribution, the majority of smallholder farmers live below the global poverty line.

During our experiment in 2020, Kopernik found that there was a market information gap due to the limited access to new buyers and the reliance on local middlemen that buy the coffee beans at a lower price with uncertain parameters. We then introduced improved post-harvest processing (honey process) and connected farmers to premium buyers. The buyers were willing to buy the coffee beans at a much higher price.

We will support smallholder coffee farmers to produce better quality products, good packaging, and connect them to higher end markets.

We will assist the smallholder coffee farmers in the development of branding, packaging, promotion, and marketing of the coffee products.

We will compare the current sales practice with the improved process by measuring willingness to buy, price, and revenue from the coffee products.

By establishing a connection between smallholder coffee farmers and higher end markets, the farmers’ incomes will increase.