Over half a million smallholder farmers rely on tobacco-growing in Indonesia for a living. As the main cash crop, tobacco is four times more valuable for farmers than the nearest food crop, so its production is strongly embedded in the socio-economic fabric of Indonesian agriculture. Tobacco farmers also contribute to local food security: throughout the year, they rotate the production of food crops like rice or corn with tobacco. Given the scale of tobacco-growing and its overlap with local food production systems, achieving sustainable tobacco production can generate a host of additional benefits in the country, from improving the competitiveness of Indonesia’s agricultural sector and the adoption of environmentally-friendly farming practices, to generating better livelihoods for farmers and their families while creating stable, more resilient communities.
Enhancing the sustainability of local farming practices, however, presents many challenges. And these are also prevalent in tobacco-growing. From weather forecasts to the local preparation of the land and crop management, farming practices typically employ traditional know-how and techniques, not always making use of the most efficient, productive or environmentally-friendly technologies available. In addition, the trading system for tobacco is complex and inefficient: multiple layers of middlemen exist between the farmer and manufacturers, creating apprehension for the farmer who has no certainty of market or the price of the tobacco– assuming the quality and volume is sufficient – and inefficiencies for the buyer, who wants access to a sustainable, secure supply of high quality tobacco at a predictable price.
We believe it’s possible to overcome these barriers through PT HM Sampoerna Tbk’s (Sampoerna) partnership approach with farmers, known as the Integrated Production System (IPS). Anchored in promoting sustainable agricultural production, IPS provides tobacco farmers with a direct contractual agreement (via our suppliers) through which they gain access to finance, technology, crop inputs in the form of certified tobacco and food seeds, and technical expertise and training. This helps farmers to become more efficient and produce higher quality crops, ultimately improving their livelihoods. Through this partnership, farmers access a secure buyer for an agreed volume and quality of their tobacco, which helps to safeguard against unexpected, major market fluctuations. In short, it’s is a win-win for both the farmer and Sampoerna.
“I joined the partnership with Sampoerna in 2012. Before that, I had no clear market for my tobacco or proper guidance on farming practices. Now, I receive guidelines on field practices and training on ways to enhance the productivity and quality of my tobacco and food crops, from planting the seeds right up to the harvest and harvest selection process. “I am happy to participate in this program. The Income I receive from my tobacco has meant a more secure, stable life for me and my family.” – Mujammad Dahlal, aged 47, Tobacco farmer in Sukosari village, Jember, East Java
A central component of IPS is the application of Good Agricultural Practices (GAP). GAP defines the principles and standards related to the environment, crop and people that farmers growing tobacco for Sampoerna are expected to meet. In practice, this means farmers receive training and technical assistance from local field staff (known as ’field technicians’) who regularly visit farms to provide guidance and support on agronomy practices (e.g., the use of fertilizers and crop protection agents) to make tobacco-growing more profitable and sustainable. In addition to coaching farmers on ways to mitigate the environmental impacts associated with tobacco production, field technicians help farmers to improve the working conditions and labor practices on the farm – notably, the elimination of child labor.
This assistance in improving farming, environmental, and labor practices translates directly to other crops as the technology and inputs provided to IPS farmers for their tobacco (e.g., fertilizer available only under the partnership or access to technology such as tractors) have a positive net impact on soil quality and farm productivity when the land is used to grow food.
Today, approximately 27,500 smallholder farmers and nearly 220 field staff participate in Sampoerna’s IPS initiative, spanning 22,700 hectares of agricultural land in several regions of Indonesia since IPS was introduced in 2009. Due to improved agronomy practices, yields increased by around 20-50 percent.
Improving productivity through mechanization: Access to new technology and know-how to help improve productivity in tobacco-growing and food production is a major part of the Sampoerna IPS partnership approach. One example is the use of mechanized handheld ploughs. Introduced by Sampoerna in 2014, these ploughs are being used by 3,000 farmers and have helped halve farm labor costs, reducing overall costs of production.
Crop protection and pest management: In 2015, Sampoerna distributed approximately 1,400 tobacco plant sucker kits and less hazardous crop protection agents (CPA) to farmers in the Lumajang, Klaten and Lombok areas. The kits ensure that the appropriate amount of CPA is applied to the plant, minimizing waste and ensuring the practice is more cost-efficient, while helping to ensure that residue levels of CPA remain low.
“Through the training program, farmers learn to use plastic tunnels to protect their plants from uncertain weather and to reduce tobacco drying time. IPS has also helped to increase tobacco productivity in Pakusari from 1 ton to 1.75 tons per hectare.” – Suryono, Tobacco Farmer in Pakusari Village, Jember, East Java
Barn upgrades: Improving the fuel efficiency of curing barns for flue-cured tobacco helps to greatly reduce CO2 emissions and the environmental impact associated with the curing process while reducing farmers’ cost of production. Today, more than 360 barns have been upgraded to rocket barns which include a more efficient chimney and furnace system, while another 1,300 rocket barns have been converted to run on local biomass, reducing fuel consumption by 20-30 percent.
Reforestation initiatives: To mitigate the impact of tobacco-growing on the environment, farmers are encouraged to reforest local woodlands so that they have access to a sustainable source of wood for fuel at a competitive price. Since 2010, approximately 7 million Sesbania trees have been planted in Lombok by farmers, and, since 2015, Sampoerna’s suppliers have also planted nearly 2 million hardwood tree varieties (Acacia & Eucalyptus) in dedicated woodland areas.
Farmer Days: These events offer an opportunity to communicate with farmers and to educate them on better agronomy and labor practices. Launched in 2013, these Farmer Days usually attract 15,000 people each year and since 2016, farmworkers and farmers’ wives are also invited to receive first-hand training on farm safety.
Improving labor practices: Farmers also receive training on how to improve labor practices to eliminate child labor and other labor abuses on farms. Farmers receive training on the Agricultural Labor Practices (ALP) program and Code, and various communications tools are used (posters and booklets) to sensitize farmers about issues such as ‘no child labor’ and ensuring a ‘safe working environment’ on the farm.
After School Programs (ASPs) have also been set up, providing extracurricular activities for both IPS and non-IPS farmers’ children aged between 7-12 years to try to eliminate child labor on farms. Approximately 8,600 children have taken part in this program since its introduction in 2013. In 2016, based on an assessment of 50 schools (covering approximately 4,800 children) in the Java and Lombok areas, Sampoerna found that ASPs had the potential to reduce child labor on the farm by as much as 90%.
In addition to the training that farmers receive under the IPS partnership, the company has set up the Sampoerna Entrepreneurships Training Center (SETC) which develops a broad range of activities aimed at improving the economic stability of rural communities.
The SETC is a prime educational facility constructed on a 27 hectare site in Pasuruan, East Java, offering a range of training courses such as integrated farming (agricultural production, gardening, animal husbandry, fishing, and product processing and waste management), as well as entrepreneurship and business skills. Participants include those employed within Sampoerna’s value chain or business beginners keen to learn new skills in other sectors. Since its inauguration in 2007, over 70,000 people have visited the facility, helping 30,000 participants – many of them women- to learn new entrepreneurial skills, resulting in the creation of 3,300 small and medium-sized enterprises (SMEs) from the textiles, handicrafts and food processing industry.
These SMEs benefit from the Center’s business incubator hub to apply their business model before setting it up “for real”. Many also showcase their work at the country’s Annual Expo to try to reach new customers. For more information, visit: http://ppksampoerna.com/.
These are just some elements of Sampoerna’s partnership approach with farmers and their local farming communities which are contributing towards several UN Sustainable Development Goals (SDGs) – such as SDGs #1, “No poverty”, through improving the resilience and stability of Indonesia’s farming communities; #2 ”Zero hunger”, through the provision of food crops and technical assistance to farmers in support of local food security; #4 “Quality education” and #8 “Decent work and economic growth”, through the Sampoerna Entrepreneurship Training Centre and its impact on local communities to foster the growth of new businesses, alongside providing After School Programs and scholarship opportunities for children in agricultural areas to help reduce child labor; and, finally, #15 “Life on Land”, under the framework of Sampoerna’s efforts to conserve and restore local areas of forestry.