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Jakarta, June 14, 2024 - The global organic food potential is predicted to reach USD 546.97 million by 2032 with a compound annual growth rate (CAGR) of 11.6% from 2023-2032. With its rich natural resources, Indonesia has the advantage of fertile agricultural land that supports the export potential of organic agricultural products such as fruits and spices.
Data from the Central Statistics Agency (BPS) processed by the Economist team of the Indonesia Eximbank shows that nationally, in 2023, fruit products contributed USD 637.93 million, with total export volume increasing by 10.28% YoY, reaching 1.20 million tons. Spices reached USD 613.79 million, with a volume increase of 26.75%, reaching 157.79 thousand tons.
The export performance of Indonesian fruit and spice commodities in the January-March 2024 period was also excellent. Fruit products achieved an export value of up to USD 262.44 million (up 65.37% YoY from USD 158.70 million in January-March 2023), and spice products reached USD 178.47 million, an increase of 13.58% YoY compared to the same period in 2023. This shows that Indonesian fruits and spices are sought after in international markets.
Aligned with the increase in organic agricultural product exports, Indonesia Eximbank, as a Special Mission Vehicle (SMV) of the Ministry of Finance of the Republic of Indonesia, continues to encourage organic product exports to various countries, especially Europe and the United States.
PT Mega Inovasi Organik (MIO) is one of the LPEI debtors pushing Indonesian organic products to global. Dippos Naloanro, owner and director of Mega Inovasi Organik, said that since its establishment in 2011, MIO has had a vision to build an organic farming ecosystem in Indonesia.
“During the Covid-19 pandemic, when food demand dropped, organic products worldwide continued to grow by 10% because the market started to understand and care about health issues, especially the chemicals used in products. I believe that in the next 20 years, organic products will take over as the world moves towards organic products,” said Anro.
Anro said the export potential of organic products is very large. For example, organic fresh passion fruit can be absorbed up to 1 ton per week by the European market. According to him, organic products are favored by the international market because they are healthier and free of chemicals that impact health.
Therefore, Mega Inovasi Organik continues to partner with farmers to educate and guide them in obtaining organic product certification for export and domestic markets. Currently, Mega Inovasi Organik has partnered with more than 2,500 farmers from Sumatra, Java, Bali, to East Nusa Tenggara to produce various integrated organic products on one land, ranging from coconut sugar, organic fruits, spices, to rice for export markets in Europe, the United States, and Asia.
Anro explained that PT MIO implements an integrated organic farming concept where farmers are directed to plant various organic products favored by the European and American markets as a step to diversify agricultural products. On a plot of 2,000-3,000 square meters, farmers plant coconut sugar, fruits like passion fruit, mangosteen, mango, pineapple, soursop, spices, and herbs like pandan leaves, vanilla, ginger, turmeric, and curcuma.
As a result, the income of PT MIO's partner farmers has increased. Before becoming organic farmers, they earned IDR 3-4 million per month from selling molded sugar. PT MIO asked farmers to practice organic farming and process it into granulated sugar, increasing their income to IDR 7 million per month.
“That is just one product; the income from coconut sugar increased by 30-40%. By building an integrated concept, farmers usually manage land with four types of organic products. I once roughly calculated that if a farmer has 3,000 square meters of land planted with various organic products, they could earn IDR 80-90 million per year,” he said.
In addition to collaborating on agricultural product development, PT MIO also provides training and regular monitoring to ensure that products meet established organic standards. PT MIO guarantees to continue absorbing every product produced by partner farmers who practice standard organic farming.
An example is the endemic spice plant from North Sumatra, andaliman, which only grows around Lake Toba. Andaliman is a type of pepper with a stronger aroma and richer taste than Sichuan pepper, favored by Germans.
Andaliman grows wild around Lake Toba on thorny trees. During harvest, farmers often get injured while climbing and harvesting andaliman. Unfortunately, the farmers' struggle does not match the selling price during harvest season. Before the harvest, andaliman sells for up to IDR 150,000 per kilogram. However, during the harvest season, once a year from May-August, the price drops to IDR 10,000 per kilogram.
“I told the partner farmers in Lake Toba that andaliman has a market in Europe. We will buy it at four times the market price during the harvest season. They were all delighted because they could enjoy a good price during the andaliman harvest season,” he said.
Besides andaliman, PT MIO also helps preserve other endemic spice plants, such as cubeb, which only grows in Central Java. “Cubeb has a niche market in Europe. Some customers use it as a beverage mix or spice blend for meat dishes to enrich the flavor,” he said.
Anro thanked LPEI for supporting PT MIO in promoting Indonesian organic products to the global market. “LPEI plays a role in supporting exporters like me because of their speed in providing financial facilities to us, which has helped us a lot. This collaboration can be enhanced to a higher level where LPEI can help these farmer communities become foreign exchange-earning farmer communities like the LPEI Desa Devisa concept, allowing farmers to grow their production and quality,” he said.
Head of NIA, Trade Finance & Financing (NTF) LPEI, Berlianto Wibowo, said, “LPEI supports export-oriented businesses to develop their enterprises through the provision of PKE facilities. This PKE program provides financing, guarantees, and insurance facilities for transactions or projects that may be difficult to carry out commercially but are considered important by the government to support national export policies or programs.”
As of April 2024, LPEI has disbursed PKE facilities amounting to IDR 15.2 trillion with a total of more than 90 export destination countries. As part of supporting Small and Medium Enterprises (SMEs), LPEI provides support through PKE SME facilities, which have been disbursed amounting to IDR 1.023 billion as of April 2024.
Berlianto mentioned that LPEI remains committed to supporting Indonesian local products to global by providing various superior facilities for business actors. Anro also advised young people who want to venture into organic farming to enjoy every activity and let it process. “Just do it, if you have a dream, translate it into activities and enjoy those activities every day. Don't think about the market first; it will come by itself as long as you enjoy it. Don't expect to get big profits quickly; there is no instant process,” he said.
Media Liason:
Chesna F. Anwar
Corporate Secretary – Indonesia Eximbank
Ph.: (021) 39503600
Email: corpsec@indonesiaeximbank.go.id
Web: http://www.indonesiaeximbank.go.id
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