Coffee as a Pillar of the Green Economy Coffee, particularly through Coffee Agroforestry Systems (CAS), serves as a critical component in Indonesia’s transition toward a national green economy. This system offers a sustainable development approach that integrates ecosystem services with socio-economic benefits. In a green economy, "natural capital" is viewed as being as vital to national prosperity as financial capital, encouraging market-based incentives for environmental improvements.
Indonesia’s Global Potential and the Challenge of Poverty
Indonesia is currently the fourth-largest coffee producer in the world, with annual production exceeding 700,000 tonnes. The government aims to surpass competitors like Colombia and Vietnam to become the world’s second-largest producer through increased investment and public-private collaboration.
However, this ambition must address the fact that the majority of coffee smallholders remain poor, with many earning only around 7.5 million IDR per year, often viewing coffee as an unreliable livelihood. Smallholders manage roughly 95% of the nation's coffee land, making their inclusion vital for any sustainable growth.
Structural Solutions: Land Reform and Its Support Systems
To ensure inclusive growth, the sources emphasize several strategic interventions:
• Land Distribution through Social Forestry: The government has accelerated Perhutanan Sosial (Social Forestry), which acts as a form of "soft agrarian reform". This provides legal access to forest land for up to 35 years, resolving land tenure conflicts and allowing farmers to manage resources sustainably.
• Supply Chain and Cooperative Strengthening: Many smallholders are trapped in unfair market systems dominated by middlemen. The solution lies in revitalizing cooperatives to act as hubs for contract negotiation, ensuring farmers receive a fairer share of the export price.
• Technology and Training: Modernization requires digital data recording for transparency and Good Agricultural Practices (GAP) to boost productivity from the current 0.8 tonnes per hectare toward higher global standards.
Goal: Downstreaming (Hilirisasi) Following the Vietnam Model
The ultimate objective is hilirisasi (downstreaming) to maximize added value within Indonesia. Vietnam serves as the benchmark; through intensive management and high-input models, it achieved productivity levels of over 2 tonnes per hectare. By shifting from raw green bean exports to processed products—such as roasted beans and instant coffee—Indonesia can significantly increase national revenue and export competitiveness
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