The Tipping Point of Farmer Corporations in Indonesia

08-04-2021

On 23 February 2021, KAN Jabung, a client of Agriterra Indonesia with dairy as their core business, received a national award from the Indonesia Minister of Cooperatives & SME for being the agricultural cooperative with the highest total of assets and the best IT system. This award is a significant milestone in the project of Agriterra and KAN Jabung, aiming to modernise the cooperative and to increase the members’ income.

The project started in 2018, when Trijan Singh and Daphne van der Zee, agripooler from ABN Amro, visited KAN Jabung for a cooperative assessment. They recommended the corporation to focus on at least three points: dividing their business unit into several cooperatives, developing a viable business plan with an attractive package of internal capital, and investing in a Management Information System (MIS) to better understand their financial position. Agriterra continued to support KAN Jabung with advice, training, and exchange services on the three focus areas.



KAN Jabung has nine business units. The process of separating their business into different legal entities started in early 2019. It took time, however, to change the farmers’ mindset and imagination regarding cooperative practices. This year, it became the main agenda of KAN Jabung:  the cooperative will spin-off its feed mill & sugarcane processing factory with DROC (Delivery Right and Obligation Certificate) implementation to get member commitment by offering them direct benefit (internal capital).

While the pandemic is spreading across the globe, plunging the world economy into despair, Agriterra Indonesia assists KAN Jabung in developing their Business Continuity Planning using the risk assessment tool. As one of the proposed actions to protect “people” and “profits” was to develop a cashless payment app for the members, the KAN Mobile (available in Play Store) was launched in November 2020. Since January 2020, KAN Jabung is exploring the business case for a farmer led, ‘net-positive’ circular dairy sector, starting with manure management through the production of an organic fertiliser. The business unit will take off next month, when the pilot project is finished.

KAN Jabung’s success story shows us that the pandemic cannot and will never stop our commitment and contribution to clients. This is a tipping point for agricultural cooperative development in Indonesia. A new generation of farmer cooperatives is emerging. We all have big dreams, but we have to make sure that we become that ‘dream’ and not  ‘dreamers’.
Stay healthy, be inspired, and don’t forget to be happy. 😁


Wenty Octisdah, business advisor Agriterra Indonesia

 


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