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LDC Coffee Sustainability Approach in Indonesia

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LDC Coffee Sustainability Approach in Indonesia Coffee Sustainability Approach in Indonesia September, 2020 1 LDC Coffee Operations in Indonesia • Louis Dreyfus Company (LDC) is a global merchant and processor of agricultural commodities. • Present in Indonesia since 1999, and commenced coffee operations in Lampung since 2005, and in Medan since 2013 • Sourcing both Robusta and Arabica • Head office in Jakarta • Warehouse and processing facility in Bandar Lampung for Robustas, located close to Panjang port • 2 warehouses at Medan for Arabicas Belawan Warehouse Medan WH Mill Office / Buying station Bandar Lampung Mill & WH Port Robusta Panjang Arabica/Robusta Jakarta HQ 2 Indonesia Coffee 1) 2nd largest Robusta coffee exporter 2) Produce less than 1 MT per year, per ha. 3) Dominated by smallholders (~96%) 4) Avg. size 0.6 ha. per farmer 5) Low adoption of GAPs 6) Minimum inputs use F Ø Small farm size Ø Old trees and ageing farmers A Ø Low productivity Ø Less rejuvenation C Ø Low input use Ø Limited access to financing and Ø Poor agricultural practices markets T Ø Climate change CHALLENGES 3 Sustainability Challenges & Trends in Indonesia The coffee industry faces an increasingly complex reality on the production side, and more demanding consumers at destination. Challenges Trends § Coffee industry deals with thousands of § Industry views the “sustainability parameters” smallholders located in remote areas, where as the first prerequisite to do business. intermediaries are numerous. § Traceability is becoming the second § Climate change effects are a reality. prerequisite to do business. § Multiplicity of certifications brings additional § The various codes of conduct and sourcing costs for all stakeholders. policies implemented by roasters demonstrate that coffee, whether certified or not, must be § There is an increasing number of collaborative responsibly produced. initiatives, but they are rarely linked with business. 4 Guided by Our Vision and Purpose To respond to the main challenges identified… Our vision is to works toward a safe and sustainable future, contributing to the global effort to providing the sustenance for a growing population. Our purpose is to create fair and sustainable value, for the benefit of current and future generations. LDC is committed to support the development of sustainable coffee in Indonesia, through collaborative initiatives with local and international partners. Sustainable Initiatives as Solutions 1. GAPs training to farmer 2. Agroforestry program 3. Certification programs Expected Impacts Increasing the sustainability of coffee production in Indonesia, while improving farmer communities’ livelihoods through increased productivity and product quality. 5 LDC Sustainability Initiatives in Indonesia Regenerating Indonesia’s coffee ecosystem Aceh in Sumatra (2015-2021) Preserving and regenerating the coffee ecosystem, North Sumatra while improving the economic and social conditions of Indonesian coffee farmers. • Aceh, North Sumatra, Lampung • 7,000 farmers trained • 28,000 indirect beneficiaries • 188,000 trees planted • Targets 2018-2020: 310,000 trees and 10,500 coffee smallholders Lampung Increasing the earning capacity of Indonesian coffee smallholders (2018-2021) • Lampung • Training on safe work conditions, good agricultural practices (GAPs) • 3,500 non-certified farmers from Lampung province • 14,000 indirect beneficiaries) 6 LDC Coffee Sustainability Team Dedi Dera Cecep Rahmad Eko A. Eko P. Field staff Field staff Field staff Field staff Field staff Field staff Districts: Districts: Districts: Gedung Districts: Districts: Sinar Districts: Datar Batu Brak, Belalau, Surian, Way Petay, Simar Galih, Banten, Lebuay, Ngarip, Pagar Dewa Sekincau Lumbok Seminung Sumber Jaya Sumberrejo Ar Bakoman Asia/Africa Sust. Coordinator Charlotte Indonesia Sust. Manager Desmond (Arabica) Taufiq Leo Gusti Danang Agronomist Superviser Superviser Superviser Superviser Elidon agronomist agronomist agronomist agronomist West Lampung West Lampung Regency West Lampung and Tanggamus Regency Regency Tanggamus Regencies Indonesia Sust. Manager Robertus (Robusta) Robertus Desmond Sustainability Sustainability Agronomist Manager - Manager - Taufiq Robusta Arabica Agronomist Leo Elidon Agronomist Superviser Gusti agronomist North Sumatra and Aceh Agronomist Danang Sihar Kurniawan Field staff Field staff North Sumatra Aceh 7.
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