Scoping horticulture projects in eastern Indonesia (passionfruit, cashews and tropical tree crops)

The need to address constraints affecting the development of three horticultural industries in Eastern Indonesia was highlighted during the priority-setting phase of ACIAR's Support for Market Driven Adaptive Research (SMAR) program. This 3-month scoping study will describe the existing technical, economic and market environments for the industries - tropical fruits (mango, rambutan, mangosteen) in Nusa Tenggara Barat, cashews in South and SE Sulawesi and passionfruit in South Sulawesi. The study report to ACIAR will assist development of an investment strategy for these three industries. The report recommendations will also underpin decisions about SMAR investment in Indonesia's horticulture industries.

This study considered strategies that could increase income for smallholders within a range of horticulture supply chains in Eastern Indonesia. Understanding these supply chains has led to the development of a number of project concepts and identified the research required to make the supply chains more effective for smallholders. It operated from the position of researching issues in profitable sustainable supply chains, rather than an identification of technical constraints, on the premise that there are many technical constraints, the only ones that matter are those that allow the development of profitable and sustainable supply chains.

The analysis looked at the technical, marketing and economic issues faced by passionfruit, cashews and tropical tree crops. It rapidly became apparent that in some situations it would be difficult to improve smallholder incomes in the existing supply chain. For example the supply chain of mangoes into the wet markets faces many technical constraints but is unlikely to generate any extra income for producers if these constraints are resolved as the market is currently over-supplied. Also, adoption of improved technologies in this supply chain is unlikely, as margins are low throughout the chain.

It also considered the economic situation faced by family farming enterprises. Particularly in relation to generating sufficient revenue to maintain or improve living standards, and ensure family incomes are consistent with average Indonesian incomes.

For some crops the study has recommended closed supply chains, which means beneficiaries are limited to participants in the supply chain. Closed supply chains can exclude some people to remain in less profitable markets, however in some cases they are the best way to ensure profitable, sustainable chains. In these cases the analysis has recommended a variety be developed and released through an exporter or processor who controls the level of production appropriate to the market to maintain sustainable prices for all in the chain.

The study has resulted in the development of 3 projects to be implemented in 2007-08, with the ACIAR-SADI program area and a range of other project options for future implementation.