Date released
28 June 2018

Horticulture is important in Indonesia and fresh fruit and vegetables are a significant feature of the Indonesian diet. Although 40% of the country’s labour force is involved in agriculture, only 11% of agricultural workers are absorbed by horticulture. Indonesia depends heavily on imports to sustain domestic demand, with a burgeoning upper middle class population increasingly seeking fresh produce. According to Global Business Guide Indonesia, in 2011 Australian fresh fruit exports contributed three percent of Indonesia’s needs, behind China, Thailand, the United States and Chile. The rapidly shifting diets and spending patterns of Indonesia’s expanding middle-class consumers are providing important opportunities for smallholders to produce more profitable horticultural crops.

Despite a doubling of the value of the fresh fruit and vegetables market between 1995 and 2009 to an estimated $10 (USD) billion industry, the local horticultural industry is only a minor player. Lack of quality seeds available to local farmers is one fundamental reason for failure to take advantage of increasing high-value markets, as are the lack of farmer education and uptake of modern cultivation methods. Too few Indonesian smallholder farmers are moving up the value chain into more competitive, profitable markets.

ACIAR has been foremost in recognising the gaps in Indonesia’s horticultural infrastructure, forming research ties with Bogor Agricultural University and local communities to capitalise on emerging opportunities to develop horticultural value chains in Indonesia, and enable the smallholder sector to break into more domestic and global markets. As Indonesia’s modern food retail chains evolve, expand and reorganise, smallholders face greater choices and more daunting decisions about which fruit and vegetable crops to produce, how to produce them and which paths to market will return the best incomes.

Just why there are not more growers seeking to market value-added produce into modern food retail markets is the focus of an ACIAR project to improve market integration for high-value fruit and vegetable systems. The research project led by Professor Randy Stringer, ‘Improving market integration for high-value fruit and vegetable production systems in Indonesia’, aims to help solve the problems that smallholders face when entering high-value markets by identifying obstacles. The project aims to better understand product cycles and changes in high-value fruit and vegetable value chains, and develop policy mechanisms to deliver on changing consumer requirements.

Project leaders Prof. Arief Daryanto from Bogor Agricultural University and Dr Hardiyanto, the Director of Indonesia’s Horticultural Research and Development Institute (ICHORD), are working with Prof. Randy Stringer and Dr Dale Yi, researchers with the Centre for Global Food and Resources, to assist the Indonesian government to develop efficient strategies to improve smallholder access to high-value food chains and competitiveness. The project provides policymakers with evidence of successes that arise from promoting participation of small farms in Indonesia’s horticultural chains.


Since its inception in 2013, the five-year project has focused on establishing practical ‘working linkages’ between science-oriented public research agencies, fruit and vegetable industry associations and the academic community. For example, global seed companies like East West Seeds are now collaborating with the project to identify research priorities, capacity needs, regulatory impediments and information gaps. The project also developed an Agribusiness Forum to encourage knowledge development, policy dialogue and industry advocacy in ways that benefit small producers.

The project also involves Indonesian PhD students who contribute to research outcomes. For example, Abdul Hasibuan is examining smallholder citrus growers’ perceptions of climate change risks. He affirms the role of farmer groups and the internet in circulating knowledge of climate risks, which can link into policymakers’ actions, and says ‘The expansion of internet access that has reached rural areas and technology information development should be used as a significant opportunity to spread extensive agricultural technology, including how to deal with agricultural issues such as climate change.’

Another doctoral student, Apri Sayekti, is focusing on women’s participation in chilli production and marketing activities, and particularly notes that involvement in value-added produce is key to asserting gender equality. ‘Hybrid varieties give more employment opportunities for women, since women in rural Indonesia do not have many alternative work options as for many other developing countries,’ says Apri.

By identifying the reasons why some households are more successful than others at moving up the value chain ‘ladder’, the project hopes to provide more fruit and vegetable smallholders with higher returns, encourage more jobs and higher wages for rural landless wage earners, and diversify income sources for fruit and vegetable producer households.