BRI II Building, 28th Fl, Suite 2806 Jl. Jend. Sudirman 44-46, Jakarta 10210, Phone: 62-21-571 3548/49, Fax: 62-21-571 1388

“Helping to Grow”

AMARTA Quarterly Report of Project Activities and Achievements Quarter 1, 2008 October 1 – December 31, 2007

Project Management Monitoring and Evaluation The following progress has been made against the six indicators that have been approved by USAID in this quarter: 1. Number of additional hectares under improved technologies or management practices. The AMARTA project is currently being implemented across Indonesia to improve agricultural production to increase competitiveness. In Quarter 1 2008, AMARTA technical assistance projects have made improvement impact of 19,566 hectares through implementation of value chain interventions : for citrus (347.43 hectares) and for Deli Serdang banana (1,063.5 hectares) , for floriculture (121 hectares) for coffee Aceh (2,200 hectares), for high value horticulture in West Java (35 hectares), for ASKA cocoa Sulawesi (12,687 hectares), for cocoa Bali ( 1,000 hectares), for coffee in Flores (2,000 hectares), for grouper fish in Flores (1,500 fingerlings) and for rubber in South Kalimantan (34 hectares), Jathropa seed cultivation in Flores (112 hectares)

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2. Number of producers organizations, water users associations, trade and business associations, and community-based organizations (CBOs) receiving USG assistance AMARTA supports agribusiness organizations through its value chain interventions. In quarter1 2008, AMARTA benefited 576 associations and farmer groups (353 in Sulawesi, 92 in Sumatera, 35 in West Java, 92 in Bali/Flores, 4 in South Kalimantan and 4 in Papua) to support of these agribusiness interventions. FY 2008 target figure is at least 450 organizations will benefit from AMARTA programs. 3. Number of agriculture related firms benefiting directly from USG supported interventions AMARTA is implementing its activity in partnership with PT. Gayo Mountain Coffee, CV. Lion Lestari, PT. Karamba, PT. Bening Big Tree Farm, CV. Bimandiri, PT. Olam Indonesia, Bloomer, Maria Bintang Laut Cooperative, Baliem Arabica Cooperative, Santo Isodorus Cooperative, PUSKUD NTT, PT. Putra Agro Sejati, Masyarakat Jeruk Indonesia, and PT. Sewu Segar Nusantara 4. Number of individuals who have received USG supported short term agricultural sector productivity training The AMARTA project has begun implementing its training programs aims to provide better knowledge of good agricultural practices, to improve local farmers' harvest capacity and to meet international standards. In quarter 1 2008, 13,921 farmers (84% male, 16% female) participated in training, including: improved Sulawesi cocoa practices (7,680 men, 1356 women participants); broca trap Aceh (59 men, 4 women) broca trap Medan (59 men, 6 women) cocoa Aceh (120 men, 30 women participants); Kabanjahe citrus (919 men, 506 women participants); Medan banana (50 men, 10 women participants); pest management Medan (34 men, 2 women) pest management Kabanjahe (25 men, 1 woman participants); floriculture Medan (69 men, 52 women participants), rubber Sibolga ( 34 men, 8 women) post harvest handling West Java (108 men, 46 women) cocoa SKA basic training Bali (2445 men, 177 women) , cocoa fermentation Bali (22 men, 3 women) post harvest handling Bali (43 men, 9 women), basic rubber training in Kalimantan (34 men participants) and grouper fish (10 men) This training creates positive impact on farmers' hectares and harvest improvement. FY 2008 target figure is at least 18,772 farmers will participate in the training program. 5. Percent change in value of international exports of targeted agricultural commodities as a result of USG assistance The percentage change in value of international exports is evaluated on a yearly basis, at the end of each fiscal year. Interventions commenced in FY07 (the majority began June or later, after the value chain assessments and intervention recommendations were completed) will impact the change of value of international exports in FY08, and results will be reported at the end of FY08. In FY 2008, AMARTA is expected to improve exports of banana by 200%, Aceh Arabica Coffee by 50%, Aceh Cocoa by 20-25%, Berastagi carrot-broccoli by 30%, Bali mango exports by 35% for an average overall change of 65.5% in value of international exports of the programs.

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6. Percent change in value of purchases from smallholders of targeted commodities as a result of USG assistance The percentage change in value of purchases from smallholders is evaluated on a yearly basis, at the end of each fiscal year. Interventions commenced in FY07 (the majority began June or later, after the value chain assessments and intervention recommendations were completed) will impact the change of value of international exports in FY08, and results will be reported in end of FY08. In FY 2008 AMARTA is expected to increase purchase of banana by 50%, Berastagi citrus by 20%, Aceh Arabica Coffee by 50%, horticulture produce improved by IPM training by 30%, Berastagi carrot- broccoli by 30%, Bali mango by 10%, and West Java high value horticulture by 50%; this is an average, 34% change in value of purchases from smallholders of the programs. AMARTA Grants Program The following grants were awarded in this quarter: Bio Fuels Pilot Project, in Flores, NTT – Awarded October 01, 2007, US$ 31,300 Support to the Grouper Value Chain-Village based Net Cages in Flores, NTT – Awarded 29 October 2007, US$ 81,836 Support of Fishery Value Chain in Kokonao, Papua - Awarded 07 November 2007, US$ 95,000 Improving Bali Beef Cattle Production in Kupang – Awarded 16 November 2007, US$ 95,000 The following grants have been approved by USAID: Support to the Grouper Value Chain-Hatchery and Nursery Rehabilitation, US$ 149,000 AMARTA is developing the following grant proposals: Developing Market Linkages for Farmers in West Java Through CV Bimandiri's Supply Chain, US$ 65,000 Creating Value for Nutmeg Farmers in Sulawesi, US$ 31,500 Intervention for Specialty Coffee in Wamena, Papua, US$ 105,000 Intervention for Specialty Coffee in Moanemani, Papua, US$ 95,730 AMARTA Aceh Brand Name Creation for Free Virus Brood stock and Post Larvae Black Tiger Prawn, US$ 71,000

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Advocacy for Improved Enabling Environment Public – Private Dialogue on Dry-Land Agriculture Development In Tabanan Regency – Bali Regional Agribusiness Competitiveness Alliance (RACA): As a first step toward establishment of a Regional Agribusiness Competitiveness Alliance (RACA) in Bali, AMARTA organized a workshop on October 10, 2007 in collaboration with Subak Abian Association of Tabanan (SAA) and the Government of Tabanan Regency. The 156 participants included farmers, representatives from farmer groups and producer associations, agribusiness firms, and government officials including Directorate General of Horticulture, and Directorate General of Processing and Marketing of Agricultural Products, as well as a representative from USAID Jakarta. The participants identified major competitiveness and policy issues in the area of cacao, coffee and horticulture, production and marketing and concluded by emphasizing the need for continuing collaboration and follow-up action. AMARTA is recruiting an assistant to help establish and empower the RACA. Empowering the Karo RACA On December 22, 2007 meeting at AMARTA‟s Kabanjahe Office the 4 Organizational Committees of the Karo RACA agreed to form a Coordinating Board with elected personnel to develop a Work Plan for 2008. Among other assistance provided, AMARTA was asked to help increase the capacity of the personnel through training on proposal writing and policy advocacy. AMARTA was also asked to prepare a “policy white paper” in early 2008. Establishment of the National Horticulture Board In collaboration with Directorate General of Horticulture, AMARTA sponsored a national meeting of the horticulture business associations at Hotel Bumi Karsa, Jakarta, on December 12-13, 2007. The 157 participants, including representatives of business organizations, academics, and government officials from various provinces of Indonesia, agreed to establish a National Horticulture Board as a union of the national horticulture stakeholders to voice and advocate their common interests.

Aquaculture Grouper Nursery and Grow Out Development in Loh Mbongi A new boat has been granted to the Loh Mbongi facility in Flores. A manufacturer has been identified in Labuan Bajo to build the nursery tanks based on order and specification. Bali, Several grouper broodstocks have been purchased from Gondol, Bali by assistance of AMARTA and total about 40 grouper broodstocks have been collected and kept in Loh Mbongi, PT. Karamba of hatchery and nursery area. Nursery tanks have been purchased and the rehabilitation of nursery & hatchery of PT. Karamba and has been initiated in December 2007.

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AMARTA and PT. Karamba staff attended the Workshop on the Development of Better Management Practices for Marine Finfish Aquaculture in the Asia Pacific Region in Lampung on November 7-10, 2007. Some Aquaculture practices and reliable Aquaculture sources were identified from the event. Village Based Net Cage Pilot Program in Warloka Village A socialization meeting was conducted in Warloka village on Dec 7 2007. A group of fisherman was identified and will be assigned to grouper grow out cages. Grow out training for Warloka villagers is being conducted in the PT. Karamba facility in Loh Mbongi. Training began in August 1 2007 and is scheduled to end January 14 2008. The cages are placed in front of Warloka village and 1500 grouper fingerlings have been acclimating in Loh Mbongi nursery to be transferred into the net cage on late of December. Cages are in good condition and will be equipped with small generator for lights to avoid any damage by boats traffic within the area. Grouper stocking on the grow out pilot program in Warloka fishing village net cage has been started and scheduled to be advanced and completed by first quarter of 2008 Black Tiger Shrimp Hatchery Company Established On November 12 PT Aceh Windu Lestari was established with facilitation by AMARTA. The objective of the company is to revitalize the black tiger shrimp, a species native to Aceh. Shares in the company were issued in exchange for capital. Shareholders currently consist of hatchery owners, shrimp farmers, traders and other stakeholders. AMARTA will provide assistance to the company but the eventual goal is for the company to operate profitably as a commercial entity. AMARTA will grant laboratory equipment to ensure the Post larvae sold to shrimp farmers are pathogen free.

Livestock Improving Production of Bali Cattle in West Timor: The grant to Puskud NTT (Koperasi Ternak Sapi Potong, KOPNAK) cooperative to fund a “contract farming” cattle breeding program has been awarded. The implementation of the project will involve farmer members of the cooperative in the Kupang District. AMARTA will provide 300 female beef cattle after the price of beef normalizes around February 2008 from the increased price due to the religious holiday of Idul Adha.

Biofuels Biofuel Production in Flores: On December 18th, 2007 initial biofuel machines has been shipped to Ruteng, meanwhile AMARTA's partner, PT Lion Lestari, has created jatropha seedling nurseries in the villages of Satar Mese and Ulu Vae. 137,500 seedlings were planted at each location. Many of the seeds have germinated and the seedlings are being distributed to farmers.

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To allow households in these villages to reduce kerosene use, a simple floating oil lamp that burns jatropha oil has been identified. In addition, Bosch Siemens has agreed to contribute two cooking stoves which can burn jatropha oil. These stoves will be available for field testing in January. AMARTA has also identified a local company, Tracon, which produces a stove that claims to function on plant oil. The program also plans to field this stove model. Biofuel Pilot Program on the Labuan Bajo was found not be feasible and was cancelled.

Cocoa Development and Status of Semi-Fermented Cocoa Training Program in Aceh – Between October 2nd and 5th 2007, AMARTA personnel (Simon Badcock, David Anderson, Arman Ginting) and Yayasan PANSU (Sabirin) in coordination with cocoa buying company Armajaro visited Aceh cocoa producing areas to explore the viability of AMARTA support for training interventions. This was a rapid assessment to collect basic information on the opportunities for AMARTA to work in this region. A variety of locations were visited throughout Aceh Province including the following districts Pidie, Biruen, East Aceh and North Aceh. From this field visit the level of need for suitable cocoa training farming was evident from discussions with stakeholders and evidence of cocoa cultivation in the field which was typically poor. All aspects of farmer understanding with respect to cocoa production were minimal (both on-farm and off- farm). It was determined that Armajaro facilities were insufficient to support the desired access to market connection necessary for AMARTA training interventions. Since the October field visit communication with Armajaro continued throughout November and December. Armajaro has consolidated and strengthened its presence and capacity in Biruen District with AMARTA proposing to revisit and assess the region in January 2008. Chief of Party David Anderson participated in World Cocoa Foundation meeting in Washington DC on October 24 – 25 to represent the AMARTA cocoa development assistance program. Technical Assistance to AMARTA Sulawesi Kakao Alliance or ASKA (Sabirin and Soetanto) – Between the 20th through 29th AMARTA employed two short term technical consultants Sabirin (Yayasan PAN – ) and Soetanto (ICCRI) to facilitate the Training of Trainers activity conducted in Polman November 20 through 27, 2007. AMARTA Sulawesi Kakao Alliance Smallholder Cocoa Basic Training Cycle I South Sulawesi (SS) - In South Sulawesi, 70 farmer groups (FG) are currently enrolled in ASKA training activities. These groups are a mix of formal and informal farmer groups with approximately 1,750 farmer participants enrolled in training. ASKA training in SS is currently concentrated in four Districts: Luwu, North Luwu, Palopo, Pinrang. Throughout SS basic training activities occur in 16 sub districts including: Sukamaju, Baebunta, Malangke, Malangke Barat, Suli Barat, Suli, Ponrang, Bajo, Bajo Barat, Tellu Wanua, Wara Timur, Lamasi, Lembang, Duampanua, Batulappa, and

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Patampanua. Building on the previous quarter (July through September) between October and December training included the following topics: frequent harvesting/sorting of beans, opening cocoa pods and drying beans, pest and disease identification and management. The final session facilitated a visit to Olam buying stations where farmers were able to build on their knowledge of export quality requirements, understand the transaction process (weighing, sampling, grading cocoa beans), as well as served to bridge an improved relationship between both parties. The harvesting and sorting training session had an attendance of 1,594 farmers (346 females, 21.7%), the pod opening and drying training had 1,527 farmers (353 females, 23.1%), while the cocoa clinic training had 1,235 farmers (21.8%) equating to realization of training targets of 91, 87 and 71% respectively for these training sessions. Several explanations exist for the poor attendance in the final training sessions including the closure of the Olam buying station at Padang Sappa which resulted in the cocoa clinics being conducted at the Palopo buying station [see below]. Budget allocated for this training session was not sufficient to ensure that all farmer participants were able to attend. In addition, the fasting month and Idul Fitri holidays, Provincial and District elections, and rice harvests in several areas resulted in competing activities to ASKA between October and December in South Sulawesi. One issue impacting on farmer attendance and the broader program at large in the Luwu District was the closure of the Olam buying station in Padang Sappa. The closure of this buying station was beyond the control of AMARTA personnel with Olam citing poor quality cocoa beans over a long time period. The implication of this closure was far ranging in the sense that a total of 30 farmer groups (representing 750 farmers) had been linked with this buying unit resulting in diminished capacity to fully maximize the access to market linkage and execute the cocoa clinic training activity. In addition two farmer trainers (FT‟s) resigned from the ASKA program as a result of this closure as they were unable to resettle to the North Luwu District area for personal reasons. AMARTA staff are currently considering and identifying ways of continuing with follow- up training and support to the farmer groups in the Luwu (Padang Sappa). ASKA Smallholder Cocoa Basic Training Cycle 1 Southeast Sulawesi (SES) - In Southeast Sulawesi, 50 farmer groups (FG) are currently enrolled in the ASKA smallholder training program. These groups are a mix of formal and informal farmer groups with a total of 1,250 enrolled farmers. ASKA training activities are taking place in Kolaka District (Latambaga sub-district, Samaturu sub-district, and Wolo) and North Kolaka District (Wawo and Ranteanging sub-districts). Building on the previous quarter (July through September) training activities conducted October through December 2007 included frequent harvesting and sanitation, pest and disease identification and management. The final session facilitated a visit to Olam buying stations where farmers were able to build on their knowledge of export quality requirements, understand the transaction process (weighing, sampling, grading cocoa beans), as well as served to bridge an improved relationship between both parties. The frequent harvesting and sanitation training session had an attendance of 1,219 farmers (231 females, 18.9%), the pest/disease identification and management training had 1,220 farmers (227 females, 18.6%), while the cocoa clinic training had 1,250 farmers (18%) equating to realization of

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training targets of 98, 98 and 100% respectively for these training sessions in Southeast Sulawesi. Commencement of AMARTA Sulawesi Kakao Alliance Smallholder Cocoa Basic Training Cycle II - In December the ASKA program recruited additional personnel including a farmer coordinator and 25 farmer trainers. The second cycle of basic training for the ASKA program continues to build on the first cycle that was completed in November/ December with a target of 350 farmer groups equating to 8,750 farmers. In response to the closure of functional Olam buying stations in Luwu AMARTA and Olam collectively decided to reduce the training presence in South Sulawesi. The second cycle of training has expanded to include a new province (West Sulawesi) wherein following a lengthy period of evaluation by Olam it was recommended that the ASKA program work with a local trader UD Tunas Jaya which has a series of buying stations throughout West Sulawesi spanning Mamuju and Polman Districts. AMARTA personnel then conducted a series of visits, evaluated the buying stations, equipment, personnel, philosophy, approach and farmer perception of this trader. The month of December saw the completion of the identification of farmer groups and socialization process for the ASKA training activity across the three Sulawesi provinces with a total of 9,062 farmers in attendance [below is a summary of this activity]. As per the first ASKA basic training cycle the next six months will provide participating farmers with a variety of on-farm and off-farm training. ASKA Smallholder Cocoa Basic Training Cycle II South Sulawesi (SS) - In South Sulawesi a total of 80 farmer groups (FG) or 2,000 farmers have been targeted for assistance in this second cycle of the ASKA basic training program. In South Sulawesi ASKA Cycle II training activities covered two districts Pinrang and North Luwu. In Pinrang, ASKA Cycle II training is occurring in a number of sub-districts including: Dumapanua and Patampanua. In North Luwu, ASKA Cycle II included: Sukamaju Sub- dsistrict, Mappideceng sub-district, Masamba Sub-district, Sabbang sub-district. The socialization training activity conducted in December saw the attendance of 2,052 males and 255 females (11.1%). Socialization of the ASKA program in South Sulawesi saw attendance of 2,307 people attend this first training session. ASKA Smallholder Cocoa Basic Training Cycle II Southeast Sulawesi (SES) - In Southeast Sulawesi a total of 120 farmer groups (FG) or 3,000 farmers have been targeted for assistance in this second cycle of the ASKA basic training program. In Southeast Sulawesi ASKA Cycle II training activities covered two districts Kolaka and North Kolaka. In Kolaka, ASKA Cycle II training is occurring in a number of sub- districts including: Wolo, Samaturu, Latambaga, Wundulako and Baula Sub-districts. In North Kolaka, ASKA Cycle II included: Wawo, Rante Anging, Lambai, Lasusua, Ngapa, and Pakue Sub-districts. The socialization training activity conducted in December saw the attendance of 3,013 males and 461 females (13.3%). Socialization of ASKA program in Southeast Sulawesi saw attendance of 3,474 people attend this first training session. ASKA Smallholder Cocoa Basic Training Cycle II West Sulawesi (WS) - In West Sulawesi a total of 120 farmer groups (FG) or 3,000 farmers have been targeted for assistance in this second cycle of the ASKA basic training program. In West

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Sulawesi two district areas are included in the ASKA program: Polman and Mamuju Districts. In Polman District, ASKA Cycle II training is occurring in a number of sub- districts including: Anreapi, Mappilli, Binuang, Luyo, Bulo, and Tappango sub-districts. In Mamuju District, ASKA Cycle II training is occurring in a number of sub-districts including: Tommo, Panggale, Sampanga, and Tappalang sub-districts. The socialization training activity conducted in December saw the attendance of 2,899 males and 382 females (11.6%). Thus, the socialization of the ASKA program in Southeast Sulawesi saw attendance of 3,281 people attend this first training session. Cocoa Training-of-Trainers (ASKA and SKA Programs) - A third ASKA Trainer of Trainers (ToT) was conducted in Polman District (West Sulawesi) between 20th and 27th October for theoretical and practical training for the new farmer trainers. This was in response to the delay in resolving outstanding issues with district/provincial estate crops in executing the MoU with the Directorate General of Estate Crops. A total of 30 people were trained with invitees from South Sulawesi (6), West Sulawesi (11) Southeast Sulawesi (10), Bali (2) with attendance and support by Polman district estate crop authorities. Farmer trainers were trained in a range of topics linked with the basic training activities of the ASKA program. In addition to technical aspects, implementation, reporting, management and financial guidelines and practices were conveyed to participants. Solar Dryer Construction at buying stations in Southeast Sulawesi - As a continuation of the support for improved post-harvest handling practices additional solar dryers were constructed during this quarter at Olam buying stations. Farmer representatives attended the construction, enabling a discussion of drying, how quality is linked to on-farm and off-farm activities as well as further dialogue between Olam and farmer participants. In November two larger two solar dryer (4x6m) units constructed at the Olam buying units located at Wolo and Lambai. The Wolo solar dryer was constructed on the 11-12th November for which a total of 36 participants (34 males / 2 females) who attended the training session including farmer representatives, local extension officials and Olam personnel. The second solar dryer in Lambai was constructed on 16-17th November with attendance by 45 people (44 males / 1 female). Preparations and budgets are being prepared for the construction of solar dryers at the remaining Olam buying stations (Lapai, Pinrang, Masamba) as well as at Tunas Jaya buying stations throughout West Sulawesi. In addition to the larger solar dryers 5 small individual units (2x3m) will be constructed in collaboration with local farmers in and around existing buying stations. The aim of this will be to demonstrate to smallholder farmers the benefit of individual small scale solar dryers. Farmer interest in the solar dryers is high with a current constraint being the ability to readily access the 14% low density polyethylene plastic necessary for the construction of these units. AMARTA personnel are working together with our partners to determine a cheap and reliable source of plastic that will be available for farmers. AMARTA Participation in National and Regional Agribusiness exhibitions - AMARTA participated at a National Agribusiness Plant Protection exhibition organized by Department of Agriculture at the Cereal Research Institute, Maros 26-28 November 2007. The Indonesian Minister of Agriculture attended the exhibition where he was

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able to visit and learn more about AMARTA activities. Comment and feedback by a range of stakeholders was positive on AMARTA initiatives and program activities – interest was high in relation to the AMARTA Smallholder Cocoa Films which were being screened throughout the exhibition. AMARTA was invited to a second regional Agribusiness exhibition by the North Luwu Estates Crops Agency. On December 6, 2007 AMARTA participated in this regional exhibition where smallholder cocoa producers and other stakeholders attended. The AMARTA stall also screened the smallholder cocoa films, smallholder poster series, demonstrated garden rehabilitation practices as well as providing AMARTA program activity brochures. AMARTA Smallholder Cocoa Series DVD Launch - On 29th November AMARTA launched its smallholder cocoa series at the Clarion Hotel, Makassar. A total 105 participants were invited of which 100 attended. Key speakers were Rafael Jabba (USAID), Tracey Duffey (World Cocoa Foundation), Mr. Rizky Muis (Director of Beverage and Spice Crops), David Anderson, and Simon Badcock (AMARTA). A broad variety of government, NGO, donor, University and private sector stakeholders were invited to the launch. The four smallholder films were screened with a break. At the end of the launch AMARTA Chief of Party David Anderson announced that the films were available for use by interested parties. Permission is sought with details outlining where, how and for whom the films will be used. To date a number of agencies have formally applied for permission to use the films in training activities including: Directorate General of Estate Crops, ACIAR-SADI (AUSAID), Cargill, FMC, and Armajaro. Interest has been and continues to be expressed by other parties. World Cocoa Foundation visits ASKA Training - Between 30th November and 2nd December Tracey Duffey from the World Cocoa Foundation visited the ASKA training program in Southeast Sulawesi. Simon Badcock (AMARTA) and Vijay Karunakaran (Olam) facilitated the visit with Tracey attending ASKA cocoa clinics at Kolaka, Wolu, and Lambai buying stations. Additional meetings were conducted with farmer groups across these locations, with dialogue with farmer groups at ASKA cocoa study garden (kebun belajar) locations, cocoa nurseries and examples of farmer gardens who have participated and benefited from the ASKA training program. Sustaindonesia Kakao Alliance (SKA) Smallholder Training in Bali - Following the decision not to proceed with Bali estate crops personnel as basic trainers three more farmer trainer candidates were identified and then trained in the Sulawesi ToT III. A total of forty farmer groups totaling 1,000 farmers have been selected from Tabanan and Jembrana Districts with preliminary socializations and meetings having occurred in November. The Makassar Office has submitted all technical materials to the Bali regional office and private sector partners Big Tree Farms for consideration with specialized topics on organic farming and fermentation to be reviewed. Pro forma budgets for basic training, follow-up training and other activities have been submitted to the Bali regional office for consideration and discussion with private sector partners (Big Tree Farms). Socialization brochures have been completed (English and Indonesian) for the SKA Bali program. Weekly coordination meetings between BTF and AMARTA field staff initiated in November are serving to assist in training implementation. Senior management meetings conducted on a fortnightly basis between the Bali Regional Office

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Manager and Big Tree Farms are assisting in decision making. The fourth film set in Bali has been shot with topics including solar drying, fermentation and organic cocoa farming practices. Final editing is in process with the script being completed by the contractor. SKA training is a continued series of basic training program. 4 Farmer trainers for cocoa have been hired, and the first cycle on SKA Basic Training has been conducted which scheduled to be completed on February 2008 with 12 training module. Socialization training and first module on basic training – Cocoa Tree Pruning has been completed with total number of participants 2445 male farmers and 177 (6.75%) female farmers. Automatic Cocoa Detention – Following on from September 19-20th, USAID- AMARTA visit to Makassar additional work on October and November included additional research as well as the completion of the activity description, budget, and SOW for FDA (Food and Drug Administration) and APHIS (Animal Plant Health Inspection Service) consultants to visit Indonesia in 2008. On November 29th USAID (Rafael Jabba) and AMARTA (David Anderson, Simon Badcock and Dieter Fisher) conducted another follow-up meeting in Makassar. In attendance at this meeting were representatives from Olam, South Sulawesi Plant Quarantine Inspection Services, South Sulawesi Laboratory, South Sulawesi Department of Industry and Trade, PT. SUCOFINDO, as well as the Makassar Port Authority. At this meeting it was agreed to conduct a trial fumigation to collect additional information as a background to proposed work on automatic detention in FY 08. Following this meeting, a budget and work plan for the trail was prepared. On the 17th December two clean containers were transported to the Makassar Olam warehouse where they were then packed with approx 13 tons of cocoa (typical of that sent to the US). One container was fumigated with 80 mgs Methyl Bromide for a period of 48 hours and then sealed for a period of 55-60 days mirroring standards employed by Brazil when exporting cocoa from Indonesia. Samples of live insects and quality were taken from both containers and which will then be re-sampled again at the conclusion of the trial. Developing a Sustainable Supply Chain for Fermented Cocoa in Bali The construction of the Central Cocoa Processing Unit was completed in late September and officially opened by Head of Mekayu Sub-district, Mr. Rafael Jabba – USAID, Mr. David Anderson – AMARTA, and Mr. Ben Ripple – Big Tree Farms on October 19, 2007 after 3 days fermentation training that was conducted by Ms. Smilja Lambert from MARS. The training was attended by 22 male participants and 3 female participants. Visit by 11 members of US Congressional delegation and Mr. Rafael Jabba from USAID Jakarta to Big Tree Farms Central Cocoa Processing Unit (CCPU) On December 5, 2007, Big Tree Farm‟s CCPU was visited by 11 members of a US congressional delegation (who were in Bali to attend the Bali Climate Change Conference) together with Mr. Rafael Jabba, USAID CTO for AMARTA. Mr. Ben Ripple from Big Tree Farms accompanied them during the visit and explained about USAID

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support through AMARTA Program in building the CCPU to increase the cocoa quality through fermentation process. They also visited Subak Abian Buana Mekar as one of Big Tree Farm‟s partner in cocoa fermentation program.

Coffee Specialty Coffee in Flores During the reporting period, AMARTA assisted two coffee exporting companies, PT Gajah Mountain Coffee in Aceh and PT Lion Lestari in Flores. These companies plan to purchase coffee from farmers‟ cooperatives and export it under fair trade and organic certification. Lion Lestari has registered for fair trade certification and exported one container of premium coffee. Gajah Mountain has upgraded its processing equipment and installed a cupping laboratory to test coffee before purchase. The certification process is underway in Aceh with Gayo Mountain Cooperative. In addition, trainings were held on the use of the Broca Trap, a technology to reduce infestation by the coffee bean borer. During the reporting period, trainings were held Sidikalang, North Sumatra and Benermeriah Takengon-Aceh, with a total of 128 farmers. These farmers will receive traps and attractant so they can demonstrate the effectiveness of the technology on 100 hectares in each site. The traps are expected to reduce infestation from current levels of 20 to 30%, down to less than 10%

High Value Horticulture High Value Horticulture Post harvest Training Three 2-day post harvest workshops were conducted: in Jakarta on November 8th and 9th; Lembang, West Java on November 12th and 13th; and Bedugul, Bali on November 15th and 16th. They all had a varied participant base (growers, shippers, supermarket buyers, and other handlers including some exporters, government representatives, researchers from institutes and universities), with interests in both fruits and vegetables. There were over 70 participants in Jakarta and Lembang and about 50 in Bali. The program alternated between topics on the technical aspects of post harvest biology and technology and the management, organization and quality assurance aspects of the produce business. The presenters were short term technical consultants Marita Cantwell and Henry Winogrond. High Value Horticulture Development Program in Pancasari MBMC (Mitra Bina Mandiri Co-operative) has been identified as a partner for AMARTA‟s High Value Horticulture Development Program in Pancasari, Bali. AMARTA‟s support plans to include providing 3 varieties of strawberry frozen plants from California; mobile cooling storage or small stationary cooling storage with

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defrosting system; and sponsoring the post harvest training, meeting, association, and technical assistance. The training program is scheduled to start on February 2008. Training in Best Agricultural Practices for Citrus in Berastagi, Karo District AMARTA Kabanjahe continued training in BAP for citrus throughout the quarter. A training manual was adapted from the Ministry of Agriculture manual for Standard Operating Procedures. The training includes best practices for pruning, use of fertilizers and pesticides, and thinning. Seven trainings were completed in Quarter 4 throughout North Sumatera.

Improve Production and Marketing of Vegetables – Berastagi, Sumatera Dr. Robert Richardson supplied short-term technical assistance in November. Dr. Richardson evaluated AMARTA‟s trial varieties of several broccoli seeds, selected varieties from US, recommended good growing practices broccoli, and trained PT. Hortijaya and PT Putra Agro Sejati in post harvest handling of broccoli.

Integrated Pest Management Training – Berastagi, Sumatera On October 10 until 15, 2007, a Training of Trainers (TOT) for Integrated Pest management was conducted in collaboration with Crop Life Indonesia, a nonprofit association of 8 leading pesticide and fertilizer manufacturers. The workshop was attended by around 25 people: 7 from Crop Life, 7 from the crop protection agency of North Sumatra, 7 from farmer groups, and the rest extension agents of the Agricultural service office of Karo district. Recipients of this training are expected to train farmers from several sub-districts in Karo highlands in the safe and judicious use of pesticides for cost efficient, effective results keeping in mind health concerns. Most importantly, the training will help farmers overcome the current barrier to exporting to Singapore and Malaysia due to exceeding the pesticide MRL (maximum residue limit). On December 10 until 15, 2007, a Training of Trainers (TOT) was conducted in Berastagi. Participants were 7 Crop Life members including PT. BASF, PT. Dupont, PT Nufarm, PT Syngenta, PT Dow agro science, PT Bina Guna Kimia and PT Buyer Indonesia, 7 government crop protection extension service, and 8 farmer group leaders from Bukit village sub district Daulat Rakyat, Seberaya Sub District Tigapanah, Bertah Sub district Tigapanah, Siberteng Sub district Barus Jahe, Talimbaru, Sub district Barus jahe, Nangbelawan Sub district Simpang Empat, Bunuraya Sub district Kabanjahe and Raya Sub district Berastagi. Those trainers will train farmers in 30 villages in Karo, in Tigapanah, Barus jahe, Simpang Empat, Kabanjahe and Berastagi sub districts. The training included; Pesticide regulation, Pesticide classification, Pest and disease identification, Pesticide selection, Sprayer design, Nozzle selection, Label learning, Pesticide toxicity, Protective Clothing, Pesticide storing, Calibration of sprayer, Spraying with effective and safe, Pesticide residue, Spraying calibration, Care and maintenance of Sprayer (practical), and Training Method.

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Supervising and Directing Demonstration Plot Activities for Banana Julian Velez, a short-term technical consultant, visited Deli Serdang district of North Sumatra to supervise and direct activities in setting up demonstration plots for the double row planting system that will enable twice as much production. He also trained on tree maintenance by pruning, de-leaving, cutting and improving fertilizing. Five plots were completed by the end of 2007. In addition, soil was tested to identify the deficient elements. The farmer groups overseeing the plots will be able to disseminate these improved agriculture practices and be district collectors for PT SSN banana procurement. A local branch of the Agriculture Technology Research Center (BPTP) also established a demonstration plot for double row planting as a result of Julian Velez demonstration.

Natural Rubber Rubber Training Support and Provision of Better Planting Material in South Kalimantan - As a follow up to the previous quarter Simon Badcock and Ilahang (AMARTA) visited the South Kalimantan field area. A follow-up meeting to the September 22nd meeting was held with Bridgestone South Kalimantan (BKSP) with Mr Mitsui (Managing Director BKSP), Tonrusdi (Field Manager), and Suryani (Field Service Training Department) on October 31st, 2007. All participant households have rootstock nursery and budwood gardens and are actively producing seedlings for sale to other regions (Java, South, East and Central Kalimantan). Current limitations exist with respect to the quality of genetic material and nursery management. A date for initial training and distribution of planting materials to beneficiary farmers was set for mid- December. Following the meeting AMARTA and Bridgestone personnel met with approximately 30 participating farmers from four villages (Bentok Darat, Kait-kait, Kait- kait Baru, and Martadah Baru) attending the meeting. On 12th and 13th December 2007, AMARTA and Bridgestone Kalimantan Selatan conducted training in land preparation, planting and rubber nursery management. A total of 34 participants from 4 villages attended this training activity with Bridgestone Kalimantan Selatan providing the following training instructors who included Mr. Tonrusdi (Opened the training), Mr. Sujiono and Mr. Winarko (Facilitator). Besides this training activity Bridgestone Kalimantan Selatan also provided and distributed 10.000 planting materials for the Budwood garden program (PB 260 and PB 330). Several outcomes were achieved as a result of the training: that training provided by AMARTA/BSKP will help farmers improve grafting success from the current 50-60% to near that of the BSKP level (98%); that information provided during training will help farmers reduce rubber disease(s) in their nurseries; improve site selection and sourcing of budwood material for smallholder rubber seedling production; improve use and application of fertilizations; new techniques taught including green budding as opposed to the higher cost brown budding technique typically used by farmers. AMARTA is currently identifying alternative markets for rubber seedling producers for which the

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current market price (IDR900-1,000 per budded stump) is much lower than prices in Tabaling District where clonal rubber seedlings sell for IDR2,600. Rubber Training Support and Provision of Better Planting Material in West Kalimantan – As of 13th November 2007 the Sibolga Rubber Activity was cancelled. Following the cancellation of this activity an alternative rubber activity in West Kalimantan has been substituted. During November and December AMARTA field staff has conducted surveys and identified to date 147 farmers from 3 villages in Sanggau District, Sanggau Kapuas Sub-District who are wanting to participate in rubber tapping and post harvest handling training activities. The fourth group of 50 farmers is from Gabungan Kelompok Tani (GAPOKTAN) which will occur in April 2008 and for whom farmer participants will be selected from Kab. Sanggau, Kec. Beduai. Originally it was planned for training to be conducted in December however farmer participants were unable to commit to due to harvesting of dry land rice crops. Training for this first group of 50 farmers is now been re-scheduled for 22-24th January 2008. A proposed market partner a crumb rubber factory, has been identified Sumber Jantin and has agreed to participate in training provide farmers with market, quality and post harvest information as well as the market. IRRI South Sumatra will also help farmers at the training to be able to better measure DRC - Dry Rubber Content at the farmer level - which is poorly understood at the current time. Based on these interventions the following benefits are expected for participants IF they follow the techniques 10-20% increase in the rubber price to farmers (ave. 15%) with a 10-20% increase in productivity but this will depend on the season, age of trees frequency of tapping etc. Rubber Training Support and Provision of Better Planting Material in North Sumatera - In 24th until 26th October at the Catholic church hall, Sipea-pea, Sorkam village, Sibolga, North Sumatera and by the cooperation to Bridgestone Sumatera Estate, AMARTA has lobbied the provision of 6000 planting material from Bridgestone for small holder rubber farmers in Sibolga, Middle Tapanuli, North Sumatera, purposed for the nursery and demonstration plot in this area and conduct the rubber training for 45 small holder rubber farmers, including the field training regarding grafting and nursery land preparation. Training facilitators were provided by Bridgestone with assistance from the AMARTA Rubber Field Coordinator.

Seaweed AMARTA has designed an intervention has been designed to improve production and marketing of seaweed in Gorontalo Province. Two locations have been identified Lemito / Popayato Bay (Pohuwato District) and Kwandang / Anggrek Bay (Pantura District). Several site visits to both locations by AMARTA consultants Jeff Gucker and Simon Badcock during the October-December 2007 quarter. AMARTA STTA Iain Neish is currently working to identify farmers and a farmers group or association to participate in the activity, as well as an exporter of seaweed that is willing to work with a farmers group to improve harvesting and post-harvest handling practices to improve quality of seaweed production.

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AMARTA has determined to provide support for the introduction of „new‟ seaweed seed stock from another location to rejuvenate existing poor quality seed stock grown at these locations. A stakeholder workshop will occur at each site. Following this a series of test plots will be trailed at each location with nurseries established to support expanded production and access to improved seaweed seed stock for local farmers. AMARTA will recruit personnel to implement these field activities. Dieter Fisher has been nominated for a technical role in this program.

Spices Throughout October and December 2007 the security situation in North Maluku has remained uncertain. This has limited AMARTA‟s capacity to make progress with training activities and engage effectively with stakeholders on the ground. Notwithstanding this a number of activities have progressed. A socialization brochure for the nutmeg training program has been completed and printed. An ANACA spice presentation was prepared for a national spices forum to be held between 14 and15 November, to be held in Ternate city which was cancelled due to closure of the airport linked with civil unrest. The MoU developed between AMARTA and the governments of North Maluku province and the cities of Tidore and Ternate to jointly implement an activity to train smallholder nutmeg farmers and extension agents on good agriculture practices to improve farm productivity, improved post-harvest handling and understanding of how to improve quality associated with nutmeg has been completed and waiting a final decision for execution. Ongoing communication has occurred between local estate crops officials (DISBUN) and the North Moluccan Agency for Agricultural Technology Transfer (BPTP) and AMARTA personnel with updates and advice as to the security situation. As per the previous quarter AMARTA‟s private sector partner experienced a serious disruption to personnel significantly affecting their capacity to engage in the ANACA program in the field. Since this time on-going dialogue between Olam and AMARTA has occurred. Olam has since decided not to commit to opening a buying station in Ternate. As a result AMARTA has decided to proceed with training support for on- farm and off-farm nutmeg cultivation once the security situation improves. AMARTA and Olam have agreed to continue with the collaboration with AMARTA agreeing to support aflatoxin testing using ELISA test kits in Ternate. Farmer groups will have the opportunity to sell to the Olam Manado based warehouse based on quality of the lots.

Floriculture Training in Good Agriculture Practices for Floriculture farmers was conducted in Medan on Nov 16th 2007 by short-term technical consultant Benny Tjia in cooperation with the Department of Agriculture Medan. The floriculture farmers in Berastagi were trained in chrysant flower land preparation, cultivation, and disease/fungus prevention. Berastagi is the central production center of cut flowers in North Sumatera and Aceh.

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AMARTA also facilitated two floriculture farmers from Berastagi joining the floriculture workshop in Bogor on November 26 - 27 2007.

Papua Agriculture Development Alliance (PADA) Office Set-up In late October the location for AMARTA‟s Timika office was identified. The office will be located in Jalan Budi Utomo 10, Timika 99910. The SLD department of Freeport is assisting AMARTA in furnishing the office and installing electricity, water supply, air conditioner, and phone and Internet connection. Trifena Tinal from the Social outreach and Local Development (SLD) department of Freeport will oversee the progress of the work on the office in coordination with Fernando Tinal, PADA Program Administrator for AMARTA project in Papua. Currently, Freeport is in the process of making contracts with two local contractors that will work on the furnishing and installation for the office. The expected date of completion is early 2008. Kokonao On 22 October, 2007, PADA project begins its work in Kokonao to build an ice factory to supply the local fishermen with ice blocks. The main aim is to help the fishermen preserve their catch until it is time to sell to outside market. Moreover, the PADA project is building a facility to build fiberglass boats for fishing. A medium size 5 tons transport boat will be built and granted to transport the fish from Kokonao to Timika. Aside from this, PADA also trains the local people the way to properly catch, raises, and harvest soft shell crabs. Styrofoam boxes will be granted to the local fishing cooperative by PADA. Progress in Kokonao: - Ice Factory: The building is 75% complete. Insulation of walls and floor is in working progress. Eighty meters of access channel for small boats from the main body of water into the ice factory is completed, as well as a small docking facility by the ice factory. The machinery for the ice factory has arrived in Timika, and is awaiting delivery to Kokonao before the end of December, 2007. - Fiberglass boats: The fiberglass boat building facility is 90% complete. The expert that will train the local fishermen to build the fiberglass canoes has been identified. He will be contracted before the end of the year and is expected to start working the first week of January. - Transport boat: The building of a 5-ton wooden transport boat is given to a local boat builder in Kokonao. The expected date of completion is 31 December 2007. The engine for the boat, which was purchased by AMARTA, has already been delivered and stored in Kokonao. - Soft shell crab production: The building of cages to raise the crabs was completed. Also, a water channel where the cages will be placed. - Fishing Equipment & Styrofoam boxes for 300 fishermen were purchased and had been delivered to Kokonao.

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- The implementation of AMARTA‟s PADA project in Kokonao is supervised by Franz Goetz, a short-term consultant, in coordination with the fishing cooperative Maria Bintang Laut. Papua Coffee Development David Anderson and Kornel Gartner met with Starbucks representatives and Senior Vice President for Coffee Mr. Dub Hay in Seattle, Washington, USA, on December 19, 2007 in order to talk about possible cooperation between Starbucks and AMARTA to further develop Papuan coffee. Wamena AMARTA‟s PADA coffee project in Wamena began on 22 October, 2007. The aim of the project is to set up a specialty coffee supply chain from the farmers in Baliem valley to the international specialty coffee market. In order to meet this goal AMARTA and the coffee farmers must meet several requirements such as setting up farmers‟ cooperative, namely Baliem Arabica Cooperative, Organic and fair trade certification of the Wamena origin, create transport and supply line for Wamena origin, identify potential buyers. Progress in Wamena: - Baliem Arabica Cooperative was established and is registered on November 27, 2007. The registration number is 16/BH/KPKM/2007. The cooperative works with around 1,200 coffee farms in the Baliem valley. The socialization process by the cooperative to the farmers is done and all parties understand their responsibilities. - Green coffee samples have been taken from Wamena to analyze grade and quality at the ICCRI coffee research center in Jember, East Java. The result of the study shows that Baliem valley coffee meets the international specialty coffee standard. - The renovation of the specialty coffee processing facility, Okesa Jagara, is 75% complete. - The coffee hulling machinery for the Okesa Jagara facility is delivered and will be installed on the first week of January. - A 240-meter long fence was constructed around the production facility. Also, a traditional house (Honai) was built on site and is used for meetings with farmer groups from different villages. - The construction of the roof extension for the processing warehouse and toilet for workers is planned and AMARTA has received a price offer from a local contractor. - Processing machinery and equipment for coffee drying and sorting were purchased and awaiting transportation from Surabaya to Timika. The expected date of arrival was December 31, 2007. - AMARTA met with the head of the Dinas Perkebunan in Wamena and Jayapura to inform them about the ongoing project in Wamena. The Dinas Perkebunan agreed to facilitate and support AMARTA‟s project in the areas of organic and

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fair trade certification, seeds and nursery, and export facility in Jayapura and Wamena. - The people in charge of the Wamena coffee project are Kornel Gartner (AMARTA), Simon Gombo (Wamena Coordinator), and Maximus Lane (Field Coordinator), in cooperation with the Baliem Arabica Coffee Cooperative. Moanemani The specialty coffee project in Moanemani was started on October 22, 2007. The project is designed to produce Arabica coffee for the international specialty coffee market. In order to meet this goal AMARTA will team up with a local cooperative, Santo Isodorus, to obtain organic and fair trade certification, create transportation and supply lines, and to identify potential buyers. Progress in Moanemani: - Socialization with the Santo Isodorus Cooperative is completed. - Base line study to identify whether Moanemani coffee is qualified to be certified as organic and fair trade is completed. - A production facility in Moanemani was identified and is currently under renovation. - A coffee huller for Moanemani was purchased and delivered to Timika. Awaiting airfreight to Moanemani and is expected to be done by December 31, 2007. - Green coffee samples have been taken from Moanemani to analyze grade and quality at the ICCRI coffee research center in Jember, East Java. The result of the study shows that Moanemani coffee meets the international specialty coffee standard. - The people in charge of the Moanemani coffee project are Kornel Gartner (AMARTA), Didimus Tebay (Moanemani Coordinator), in cooperation with John Giay from Santo Isodorus Cooperative. Agimuga The Agimuga project is designed to create farming sustainability in the Agimuga area. The project aims to help farmers to plant rice, fruits, and vegetables to end their dependency on the far-away market in Timika. In addition, AMARTA will assist the farmers to raise pigs that can be sold later on in Timika. To achieve this goal AMARTA will create a supply line and provide transportation.

Progress in Agimuga: - In November AMARTA met with a local stakeholder and the Bishop of Timika to discuss and socialize the planned project. - The local stakeholder and AMARTA are currently working together to identify the mode of transportation required for moving goods and equipments from the village to the harbor, and vice versa. - Government granted rice production equipment is currently stored in Timika. AMARTA will arrange for transportation to Agimuga.

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- Currently, AMARTA and local stakeholder are trying to identify the type of pigs that can be raised well in Agimuga, but at the same time meet the standard requirement of the market in Papua.

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