Evaluation of Indonesian transition pathways in biogas utilisation
According to Statistics Indonesia, it is recorded that between 2005 and 2010 about 40% of total Indonesian households used traditional biomass (firewood) as their primary cooking fuel, with a peak of around 49% in 2007. Firewood users were mainly located in rural areas of Indonesia. Although the Indonesian Government has established a fuel substitution programme to incentivise the use of LPG, rural areas were still untouched. The main reason is that firewood is easy to be collected from the local environment, or purchased at low cost. This condition leads to a high number of premature deaths annually as women spend hours per day in the unhealthy cooking environment. The utilisation of fuel wood in terms of tree branches will remain because of its abundant availability, and less need for maintenance as compared to biogas production.
The implementation of biogas technology at the household scale is foreseen to spread among as many as possible households in Indonesia, especially for people living in rural areas. Using biogas for cooking will positively impact health, especially for women and children, and mitigate climate change through among others CH4 and CO2 emissions reduction. Also, biogas utilisation will enhance the water quality of the rivers, since there will be no animal dung discharged to rivers. In addition, using biogas provides economic opportunities for households, as biogas production pre-empts the household from purchasing fuel as well as fertiliser.
Read more in published version by JIQ Magazine > http://www.jin.ngo/11-publications/168-jiq-special-transrisk-biogas
In order to switch from maize farm to cocoa agroforestry farm as well as maintain the cultivation growing optimally and expanding the cocoa farm in Boalemo, it needs financial support from other parties. BRI is one of the banking institutions that have representative offices everywhere, including in the Boalemo regency and has the potential to become microfinance institution which could provide loans to farmers in Boalemo.
The workshop aims to introduce banking products as well as improve the knowledge related to credit scheme for farmers and extension officers in Boalemo regency.
The workshop was held in Agriculture and Plantation Agency office of Boalemo and attended by 13 farmers from 40 famers invited; extension officers; head of Cooperative, Industry and Commerce; BRI Limboto, BRI Boalemo; and staffs of Agriculture and Plantation Agency.
The head of Boalemo cooperative, industry and commerce agency opened the workshop and he stated that a cooperative is an institution that can formally be able to manage finances with a valid legal entity. Cooperatives can be formed with a minimum of 20 members were consulted to determine the type of cooperation that will be managed. To facilitate the assistance and escort program, he encouraged cocoa farmers of Boalemo to form special cooperatives of cocoa engaged in the provision of seeds, fertilizer and marketing. The capital of cooperative can also be obtained from banks. The cooperatives can also be a credit union that may help farmers of borrowing capital. The interest rate in cooperative is maximum 2,5% per month. That way is better than farmers borrow cash from middleman with very high interest rate.
In his speech, the representative of the Boalemo agriculture and plantation agency said that he was very grateful for the implementation of this workshop and expected after the farmers know about the credit scheme of BRI, farmers will be forced to borrow at BRI than farmers pay interest of 5% per month for debt fertilizers and pesticides in some shops.
BRI as the keynote speaker for this workshop explained the credit scheme suitable for small scale business including farmers, namely, Kredit Usaha Rakyat (KUR/community enterprise credit). KUR is working capital credit and or investment to individual debtor which has productive and decent business with maximum of 25 million rupiah loan principal in which the fund fully funded from BRI. The bank interest applied is effective 9% per year. KUR credit scheme doesn’t require any collateral. Any individual can apply this credit including farmers with the requirement to have ID such as KTP, family card or married certificate; micro and small enterprise permit (IUMK) or business certificate; and one page color photo size 3×4. Business certificate can be obtained from the head of village where the farmers live but this document is valid only for one time credit application. Whereas, IUMK can be obtained from head of local sub-district with very simple documents requirement including ID card and the detail information of the business. IUMK validity period is as long as the person is still running the business. It does not cost anything in this credit application process. After the debtor submit all the necessary requirements, and then the bank will conduct a survey and doing analysis of repayment capacity to determine the amount of credit approved.
Besides KUR credit schemes explained above, BRI also has other credit schemes with total loans of more than 25 million rupiah. Farmers can be applied a credit more than 25 million depending on the purpose of each farmer and the amount of credit granted will be determined by the bank based on the analysis of repayment capacity.
From the discussion sessions revealed that some farmers who were present in the workshop, had borrowed money at BRI but to finance corn crop, consumptive purpose and their other businesses, not to finance their cocoa farm. One of them has ‘bad’ experience with BRI where he only applied for a loan of 25 million but was forced by the bank officer to borrow 30 million. In this case the BRI team confirmed that it was not bank regulation, but only the actions of individual bank officers who abuse their authority. If farmers face less pleasant things that are related to credit application, they can directly contact the head of the bank concerned to get proper information.
Another farmer asked why he received credit which was smaller than the amount asked. The bank said that the determination of the amount of credit granted based on the survey and analysis made by the bank against the debtor related socio-economic condition of the debtor. If the condition debtor considered capable to pay more, the bank may offer to give a bigger credit than proposed.
For farmers who just start planting cocoa, the bank provides special KUR credit scheme, where the bank give a tenor of one year and famers can do one time installment. If in the given time, but they have not been able to pay the debt, then the bank will reschedule its repayment term, and the maximum tenor is two years from the farmers received the credit.
At the moment BRI Limboto does not have any special insurance for agricultural products. BRI only have life insurance.
In conclusion, KUR micro is credit scheme which suitable for farmers in Boalemo where the requirements are easy and the interest rate is relatively low compared to other credit schemes. Farmers can easily apply for this credit and reach the bank because in Boalemo has had three offices of BRI, namely BRI Tilamuta, BRI Manangu and BRI Paguyaman.
Boalemo Agriculture and Plantation Agency will support BRI to give the necessary information related to the condition of farmers in Boalemo in order to facilitate the BRI in analyzing the socio-economic conditions of farmers who apply for credit.
BRI has provided 20 billion rupiah through KUR scheme credit to 2000 customers in Boalemo and 40% of them are farmers.
Su-re.co, an environmental consulting company based in Bali, Indonesia, established a green business project named su-re.coffee. The project works to implement sustainable, win-win solutions for coffee value chain stakeholders, through integrating biogas systems in Indonesia. Su-re.coffee believes that the biogas-coffee concept is a promising transition pathway for both climate change adaptation and mitigation.
Currently, Indonesia is promoting mitigation through clean energy such as biogas. Some people already use the biogas in limited capacity for domestic needs such as cooking. A biogas programme in Indonesia called BIRU, has 18,590 digesters in all over Indonesia from 2010-2015 . Compared to about five millions of cow and pig farmers in Indonesia, the BIRU digesters are still in very small number. A lack of demand for biogas is one of the key obstacles for further expansion. Thus, the initiative to roast coffee using biogas is considered to create demand. There is great potential for farmers to use biogas not only for coffee roasting, but also for expanding other small businesses . Through these and other initiatives, su-re.co is committed to advancing the energy-agriculture nexus in Indonesia.
Find out more the article published in JIQ Magazine > http://jin.ngo/jiq-magazine/10-jiq-magazine/171-jiq-december16
The demands of mitigation and adaptation policies are important to understanding a country’s climate change preparation by providing microfinance in the agricultural sector. This could be seen as a strategy to fight against the challenges of future food security. In 2014, Indonesia established climate change adaptation policies. This legislation aims to pave the way for making actions on climate change adaptation mainstream in national and local development planning. Public and private finance have supported the implementation of the climate actions. However, most funding is still used for mitigation. Adaptation finance needs support, especially in agriculture. This research paper studies opportunities for microfinance to play a role together with existing resources in supporting climate change adaptation in Indonesia. The data was acquired and analysed through a literature review, analysis of case studies and interviews with stakeholders in the climate change-related financial sector. The central findings regarding the opportunity for microfinance to contribute to the existing schemes in Indonesian climate change adaptation finance for agriculture are worthy of the result. This study found that adaptation finance is mostly used for indirect activities. Meanwhile, local communities, and farmers in particular, need directly targeted measures to adapt to climate change. An alternative approach is providing microfinance, insurance and capacity development for farmers to produce high quality agricultural products. This would contribute to optimizing the agri-food value chain, which supports socio-economic development of stakeholders, especially farmers. Hence, microfinance appears to be one potential solution to support direct climate change adaptation actions for the agricultural sector. However, this may not be strong enough to finance the entire needs for agricultural climate actions. Adaptation is contextual, so it has to be grounded in the needs of local communities. Microfinance needs public sectors support as well as other resources from the private sector. In the case of rapid response to disasters, which often destroy the agricultural sector, microfinance should be advantageous in supporting adaptation. However, in reality, it does not work, as it is prevented by regulations. So, this can be an area the public sector can support as a risk-taker as well as by providing initial funds and resources for scaling up efforts.
This is an abstract from a full paper published in Future of Food: Journal on Food, Agriculture and Society > http://futureoffoodjournal.org/index.php/journal/article/view/237
Presently, Indonesia is the fourth most populous country and in 2012 was the seventh largest emitter of green-house gases (GHG). The country has high reliance on fossil fuel to meet its energy demand and deforestation and land use change contribute to a large proportion of these emissions. As a country of 17,000 islands, Indonesia is also vulnerable to the impact of climate change, especially through sea-level rise and high temperatures, which disproportionately affect the poorest communities. In order to address climate change issues, the Government of Indonesia has set a -29% GHG emission reduction target by 2030 and promoting increasing clean energy utilization by 2025 when the share of renewable energy sources should reach 23%. One of those clean energies promoted is bioenergy. The Indonesian government has set a blending target for bioethanol and biodiesel by the same date (30% for biodiesel, 25% bioethanol) and on local levels, other forms of renewable energy such as biogas are also supported to some extent by the government. To accelerate bioenergy utilization in Indonesia, a preliminary study has been conducted where Bali and East Java were selected. Udayana University, Stockholm Environment Institute and PT Sustainability and Resilience Co (su-re.co) within the framework of two research projects funded by the European Commission: GreenWin and TRANSrisk organized an international workshop on sustainability and resilience of bioenergy for climate change. The event furthermore benefited from the generous support of the Indonesia Climate Change Trust Fund (ICCTF) on behalf of Ministry of National Development Planning (BAPPENAS) of Republic Indonesia. It took place in Bali, on 11-13th May 2016, attended by 68 registered participants coming from background, local and national government, private sectors, non-government organizations (NGOs), academics, scientists and international experts.
Data were collected during field visits and focus group discussion (FGD) between stakeholders from different backgrounds and sectors, by discussing the potential for bioenergy development in Bali and East Java. Several qualitative tools such as H-form exercises have been used by the participants to analyze the risks and opportunities of bioenergy development pathways as well as potential co-benefits such as sustainable livelihoods and economic growth through green business possibilities with both climate change adaptation and mitigation benefits. Value chain analysis was also used to identify production processes for preferred bioenergy options available in Bali and East Java and the systemic barriers and enablers for their implementation. The workshop developed and shared ideas creating green business models, investment opportunities, and partnership on energy poverty eradication and resilient livelihood with bio-energy. The workshop also engaged the assessment of stakeholder network with climate change adaptation and mitigation pathways.
Improved sustainability assessment of bioenergy and on-the-ground evaluations are needed to guide priority setting for adaptation and mitigation of climate change with bioenergy in Bali and East Java.
The paper was presented in World Renewable Energy Conference 2016.
“Is climate-smart agriculture [CSA] an oxymoron?”, Lisa Schipper, a researcher, questioned in regard to a new farming concept outlined in the 5th Asia-Pacific Climate Change Adaptation Forum in Sri Lanka recently.
The concept of CSA was coined by the UN Food and Agriculture Organization (FAO) in 2010 to sustainably increase productivity, resilience (adaptation), reduce/remove greenhouse gases (mitigation) and enhance national food security and development goals.
The concept has been introduced with a more sophisticated political approach, through a new initiative called the Global Alliance for Climate-Smart Agriculture. In a new twist, the Global Alliance provides for new ways of green washing “climate-smart” industrial agriculture, with the active involvement of private corporations such as Syngenta, Yara, Kellogg’s and McDonald’s.
The scheme may let agriculture remain a parking lot for poor farmers in Africa and South Asia, but it should not to be continued in the ASEAN region.
ASEAN is one of the most productive agricultural regions in Asia. In 2012, the region produced 129 million tons of rice, 40 million tons of corn, 171 million tons of sugarcane, 1.44 million tons of soybean, and 70.34 million tons of cassava.
Rice production was forecast to increase by 3 percent to 132.87 million tons in 2013.
ASEAN also expected to increase exports to 18.28 million tons. While domestic utilization is projected to increase to 114.57 million from 113.04 million tons in 2012, self-sufficiency (production to domestic utilization) ratio is still assured at 116 percent.
However, the target could not be achieved due to climate change. In 2014, the region produced less than 120 million tons of rice. For the 2015-2016 growing season, the United States Department of Agriculture (USDA) estimates total rice production at 118.2 million tons. Yet optimism is still high on the growth of the region’s agriculture sector. The ASEAN region is home to around 600 million people while its main food markets, East Asia and South Asia, have populations of 1.6 billion people and around 1 billion people, respectively.
However, Southeast Asia is highly vulnerable to climate change as a large proportion of the population and economic activity is concentrated along coastlines; the region is heavily reliant on agriculture for livelihoods; there is a high dependence on natural resources and forestry; and the level of extreme poverty remains high.
A study carried out by Asian Development Bank (ADB) revealed that the mean temperature in the region increased by 0.1 to 0.3 degree Celsius per decade between 1951 and 2000; rainfall trended downward from 1960 to 2000; and sea levels have risen 1 to 3 millimeters per year. Heat waves, droughts, floods and tropical cyclones have also become more intense and frequent. The same study projects a 4.8 degrees Celsius rise in mean annual temperature and a 70-centimeter rise in the mean sea level by 2100 in Indonesia, the Philippines, Thailand and Vietnam.
ASEAN farmers actually have been practicing organic farming and good agriculture practices. This effort should be combined with CSA to increase the region’s resilience. There are several ways to mix these sustainable agriculture practices. First is insurance, which protects farmers from crop losses as a result of bad weather and encourages them to innovate.
Weather index-based insurance schemes can help secure farmers’ livelihoods and enable them to invest in climate-smart technologies. It will improve millions of farmers’ adaptive capacity with the help of climate-smart insurance. Through close collaboration with farmers, civil society, governments and researchers, it will support the concept and practice of CSA in farmers’ fields and in global initiatives.
Another way is improving early-warning systems for agricultural resilience. Such systems can help avoid extreme climate events that undermine agriculture and rural development. Recommendations can be given to policy makers to strengthen existing and developing new early-warning systems that would provide an alert of a potential weather-related disruption in food production.
Climate information is also considered as an integral agricultural input just like seeds, fertilizers and other basic material production. Farmers should access climate information. Participatory climate information services for Agriculture can help farmers make informed decisions based on accurate, location specific, climate and weather information; locally relevant crops, livestock and livelihood options; and with the use of participatory tools to aid their decision making.
For problems of the increase in pests and disease outbreaks, affecting crops, livestock and fisheries, which creates a new threat for food security, one of the solutions is to build multi-country coordination for new and adapted pest and disease management systems that are based on sound science.
Research should be conducted to provide farmers, technical advisors and national policy-makers with science-based evidence and recommendations about low emissions agriculture practices such as improved feed for livestock, more efficient use of nitrogen fertilizers, agroforestry, and water management in paddy rice, and the practices’ suitability for different environments and types of farmers.
Then the practices have to be ensured to bring real benefit for farmers, otherwise it remains an oxymoron. The real solution is making climate-resilient practices based on ecologically agricultural systems, not the market/mitigation-oriented “triple-win” of “climate-smart” agriculture.
It can be done by effective multi-actor collaboration. The ASEAN Climate Regional Network mentioned in its guidelines to promoting CSA, that scaling-up CSA practices had to focus on context specific priorities and solutions, aligned with national policies and priorities. It should be determined based on the social, economic and environmental conditions on site, including the diversity in type and scale of agricultural activity, as well as by evaluating the potential synergies, trade-offs and net benefits.
The ADB is currently preparing programs on CSA to utilize its annual climate financing of US$6 billion. This fund should be used for adaptation measures in CSA practices, which typically are associated with sustainable agriculture as actions that may increase the capacity of the agricultural system to minimize the effects of climate change on productivity.
Biogas-coffee project by Su-re.co in Indonesia could be a good example which includes post harvesting process implemented with climate-smart treatment. Initiated by GreenWin Indonesia and local farmers, using biogas for coffee roasting is an interesting breakthrough with adequate demand from the market. Additionally, it also creates employment opportunities for women, as it ensures quick return on their labor, cash and material investment.
This blog was originally posted to the Jakata Post.
The demands of mitigation and adaptation policies are important to understanding a country’s climate change preparation through micro financing in agricultural sector. This could have been seen a strategy to fight against the challenges of future of food security. In 2014, Indonesia has established climate change policies in adaptation. It aims to provide direction for mainstreaming climate change adaptation actions into national and local development planning. Public and private finance have supported the implementation of the climate actions. However, most funding still used for the mitigation. Adaptation finance needs support, especially in agriculture. This research paper studies about opportunities of the microfinance role together with existing resources in supporting climate change adaptation in Indonesia. The data was acquired and analysed through a series of literatures, case studies and interviews with stakeholders in a climate change related financial sector. The central findings regarding the opportunity to improve the existing schemes in Indonesian climate change adaptation finance for the agriculture are worthy of the result. This study found that the adaptation finance is mostly used for indirect activities. Meanwhile, the community especially farmers need direct measured activities to adapt with the climate change. An alternative approach is providing the microfinance, insurance and capacity development for farmers to producing high quality agriculture products. It prepares new value chain contributing to socio-economic development in the area. Hence, the microfinance appears as one of potential solution to support the direct climate change adaptation actions as well as adaptation measure on the agriculture sector. However, it may not be strong enough to finance whole needs on agricultural climate actions. Adaptation is contextual, so it has to be grounded. The microfinance needs public sectors support as well as other resources from private sectors. In theory rapid response for disaster, the microfinance should be advantage as supporting side of adaptation which often destroys the agriculture sector. However, in reality, it does not work as it is prevented by regulations. So, this can be an areas public sector can support as a risk taker as well as initial fund and scalling up. Full paper will be published in Future of Food: Journal on Food, Agriculture and Society. Volume 4 Number 3.