Contribution of shorter value chains in agroforestry products to a green economy in the RIMBA corridor of Sumatra, Indonesia. A case study about the value cinnamon value chain.

Abstract

WWF Indonesia is aiming to create a green economy region on Sumatra, Indonesia as a reaction on deforestation by means of the RIMBA corridor. A green economy can be reached by improved livelihood assets, such as income, and improved environmental possibilities, such as improving land fertility. An agroforestry system accomplishes both. However, agroforestry products are not always popular for farmers because of the low prices and long waiting time for harvest. Cinnamon is such an example. With cinnamon, one reason for the low prices is the long value chain with several middlemen making profit and therefore not returning a fair price to the farmer. To create better prices, some companies have started to shorten the value chain while adding value through certification. This research aims to find out whether such a shortened value chain contributes to a green economy by comparing the livelihood assets and inputs of farmers of both value chains while involving several stakeholders. A mixed method approach was used to collect the data by using interviews, surveys, observations, and reviewing documents. Several villages were selected in the province of Jambi, in the districts of Kerinci and Merangin. Findings show that a shortened value chain offers higher cinnamon prices to the farmers through less middlemen and adding value by local processing and organic certification. Furthermore, the amount of knowledge farmers have about the value chain and organic farming is better when connected to a company through a shortened value chain. The government is trying to reach these farmers as well, but since cinnamon farmers are often not part of a farmers cooperative, it is hard to reach them. The key findings show that a shortened cinnamon value chain does not eradicate middlemen, but uses them to become part of the system. Also, farmers use less chemical fertilizers and pesticides when they got training in organic farming. However, not all companies within a shortened value chain give training, which shows that there are also differences within a value chain.