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Indonesia is a major producer of cocoa, coffee, and rubber. These three commodities represent an important source of income for Indonesian farmers. However, productivity in cocoa and coffee are significantly lower in Indonesia than in other major producer countries, and rubber productivity has yet to reach its full potential. While there are disputes concerning the accuracy of government productivity data, all organizations involved agree that there is much room for improvement. The national government has implemented a number of policies and programs geared towards increasing farmer productivity including seedling and fertilizer subsidies, facilitated access to financial services, and land expansion programs.These initiatives, however, are seen by many experts as ineffective as they fail to considerregional differences, provide effective training, or include sufficient on-the-ground supervision.Instead, experts interviewed for this study point to private sector actors as successful supportproviders. Private sector actors, including multinational companies, domestic producers, andNGOs, implement programs consisting of facilitated access to financial services and financialliteracy training, quality control programs which offer farmers premium quality, and contractfarming programs that guarantee price stability.These private sector actors work closely with farmers and are able to consider their individualneeds, which allows them to allocate resources more effectively. Some Indonesian governmentbodies have begun to work in cooperation with private sector initiatives to enhance the livelihoodof farmers. This research suggests that the government should continue and increase thiscooperation, involving more private stakeholders in its efforts to increase domestic productivitylevels.

Private Sector Initiatives to Boost Productivity of Cocoa, Coffee, and Rubber in Indonesia