We have learned that sustainability efforts differ across sectors and companies in Indonesia. Several companies still do not have a strategy in place to upgrade smallholder suppliers’ performance or effectively implement a traceability system. The learning from SCPP and the cocoa sector in Indonesia serve as a benchmark towards which other sectors can strive.
Given the limitations of local bean traders as the CH, sector innovation (including full-service packages to farmers) will need to come from large companies committed to cocoa with in-house farmer outreach programs. Consistent with our sustainability and exit strategy, this will manifest itself in several ways. The Program has shown large companies, in cocoa and in other commodities, to how to better segment farmers as to who is most receptive to innovations and new ideas. Although this is still in its preliminary stages, we have developed respective models for targeting farmers in different networks.
Although companies are interested in trialing new approaches, they also express their resource limitation and reluctance to invest in testing new interventions.
Advising them with ideas and solutions is important to gain traction. Commodity companies are facing similar pressing issues related to declining supply due to unsustainable practices. Therefore, presenting them with innovative tools and approaches to remove supply chain constraints is needed.
Following the pilot stage, it is important to present the business case of the proposed solutions. After piloting or testing stages, companies may need to integrate this into current operations, which often entails changing the way they work. This usually needs further advice on how to scale innovation and integration into the company business process.
Smallholder producers are vulnerable to changes in global commodity prices and harvest failure due to climatic risks. Such volatility is preventing them to invest more resources on their farm, and in worst case converting their cocoa plantation into other cash crops. In the long term, this threatens the sustainability of commodity sourcing. Therefore, a polyculture model could be introduced as a risk diversification strategy for farmers.
Learn more on SCPP effort in introducing polyculture model for plantation commodities.