How better data leads to better prices
In Bandung, HARA is engaged in a deployment partnership with IJHOP4, a subsidiary program of JICA. JICA had already engaged a number of farmers in the area, but required assistance in helping them apply for the Kredit Usaha Rakyat (KUR) microcredit through BTPN.
Getting the right price
While collecting the data of the locals, our deployment specialists found out that the farmers really struggle with getting a good price for their yield. The price for their goods fluctuates enormously, sometimes even a single hour could see the price drop from reasonable to outright bad.
The farmers expressed an interest in using HARA as a business management tool, to help them gauge the prices people are offering for their produce. Depending on the price, they could then make an informed decision to either sell to the off taker or directly to the market.
The multi-crop system
The alternative solution that the farmers use now to make up for this lack of data is a multi-crop system. In this system, the farmers plant different types of produce at the same time. That way they at least have something else to fall back on, if the price of one crop turns out to be terrible.
With there being an ever-present market for spicy food in Indonesia, chillies turn out to be one of the common secondary crops that farmers grow.
However, the farmers admitted that there is no real plan going into what crops they plant. Often they just randomly choose something. In this way, the multi-crop solution serves as a sort of home-grown insurance protecting the farmers from bad prices.
HARA could assist the farmers by providing transparent market information. Proving this transparency could help stabilize prices on the market and give the farmer better insight into what they’ll be earning. At the moment, they are simply at the mercy of the whims of the local off takers and have no way knowing they will get a fair price.
Difference in knowledge
During our visit, our deployment team also spoke with farmers that operate hydroponic farms in greenhouses. In hydroponic farms, plants are grown without the use of soil. Instead, the roots are exposed to an enriched mineral solution.
It turns out that there is a big difference in knowledge between the hydroponic farmers and the regular farmers. The hydroponic farmers know exactly what nutrients are needed to optimize the growth of their plants, and thus their profits. On the other hand, the regular farmers then to mostly just guess.
The data collected on the HARA data-exchange can be used to share knowledge and educate farmers to help improve their bottom lines. For example, by helping farmers to refine their farming practices, they can save money by not unnecessarily overusing farm input materials like fertilizer.
A more profitable future
In the deployment partnership, HARA assisted with collecting the data of around 300 farmers to help them apply for the KUR microcredit.
While the hydroponic farmers are already inspiring the other farmers with their results, becoming a hydroponic farmer themselves does require a big investment. This is where microloans like the KUR could help out.
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