Indonesia: Poor Farmer Income Improvement Through Innovation Project

Sovereign Project | 34112-013 Status: Closed

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Project Name Poor Farmer Income Improvement Through Innovation Project
Project Number 34112-013
Country Indonesia
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 1909-INO: Poor Farmer Income Improvement Through Innovation Project
Asian Development Fund US$ 56.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Sector / Subsector

Agriculture, natural resources and rural development - Agricultural policy, institutional and capacity development

Finance - Inclusive finance

Gender Equity and Mainstreaming Gender equity
Description The long-term development goal is increased innovation in agricultural production and marketing by poor farmers. The immediate objectives of the Project are (i) improved targeting of village-level public investments to locations-specific needs, (ii) increased access of poor farmers to information, and (iii) a reorientation of the focus of agricultural research to the needs of marginal rainfed areas. The Project will comprise four components to be implemented over 5 years: (i) poor farmer empowerment, (ii) development of national and local agricultural information resources, (iii) support for agricultural innovation development and dissemination, and (iv) project management.
Project Rationale and Linkage to Country/Regional Strategy

To improve their incomes, poor farmers have to be able to innovate in agricultural production and marketing in response to market opportunities. However, they are constrained from doing so because of a lack of appropriate technologies, village-level investmsents in public goods, and access to information. While the Government is taking steps to fill the gaps in providing public goods support for agriculture, and increasingly for nonrice crops, additional support is needed to target village-level public investments to the needs of poor farmers, to increase the access of poor farmers to information, and to increase the availability of technologies needed by poor farmers. The Project responds to the above by empowering farmers to undertake simple village-level investments, providing support for the development of proper technologies for rainfed areas, and providing them with the relevant information resources.

The Project directly addresses the focal points of ADB's country operation strategy (COS), which include creating and strengthening basic institutions; improving regional equity, especially targeting rural areas and less-developed islands, undertaking human and social development, and enhancing the role of women. The COS emphasizes participatory project design and administration and highlights the benefits of diverse and stable cropping systems, the development of rural infrastructure, and access to finance. The Project is in line with COS as it supports a demand driven and participatory process of agricultural innovation, and a tranparent and inclusive implementation approach.

Impact Increased innovation in agricultural production and marketing by poor farmers.
Project Outcome
Description of Outcome (i) Improved targeting of village-level public investments to location-specific needs of agricultural and rural development; (ii) Increased access of farmers to information; (iii) Reorientation of the focus of agricultural research to the needs of marginal rain-fed areas.
Progress Toward Outcome

Preliminary Results of Village Mapping as of September 2009. An assessment using log frame indicators conducted on all 1,067 project villages revealed that 72% or 871 villages are highly successful and successful. Criteria generally achieved are: (i) farmers' contribution to village infrastructure investment, (ii) increase farm production, and (iii) percentage of poor farmers as beneficiaries. The remaining 296 (27.47%) are to yet to achieve the followings: (i) transforming farmers' group into a business entity, (ii) institutionalize operation and maintenance of infrastructure, (iii) change from subsistence to commercial farming, and (iv) integrate village institutions into village administrative structure.

Findings of the benefits assessment (IA) conducted on 4,200 households in 5 districts showed that benefits have accrued to the beneficiary farmers as follows: High FIRRs (14-151%), NPV of Rp 56 million - Rp 5,180 million, B/C ratio of 1.1 - 4.1, as also production increases of more than 35%, ranging from 31 to 48%, reduced post-harvest loss averaging 21% with a range of 10-30% and income growth of 30-50% and improved ex-farm market price from 10-20%. Altogether about 80% of the target farmers experienced benefits from the Project (range 43-90%). This is collaborated by the satisfaction survey showing that 90% of the target farmers were satisfied with the Project (87-93%). Gender mainstreaming was successful with hard evidence indicating high accessibility of women farmers to agriculture technologies.

Farmers in the villages where investments have commenced are satisfied with the quality of investments. Proportion of poor farmers among the beneficiaries has been re-assessed in 2009 and estimated at 80%.

Print media, VCD/DVDs, radio and television are being used to disseminate information and technology to farmers. Adequacy of information dissemination in remote locations was consistently stepped up in the last 18-month extension of the Project.

An action plan for revitalizing relevant research program of national and regional agricultural research institutes, with increased budgetary provision has been prepared and included in the 2005-2009 strategic plan of the Ministry.

Implementation Progress
Description of Project Outputs

1. Poor Farmer Empowerment

(i) Group Mobilization

(ii) Institutional Development

(iii) Village-level public investments

2. Development of National and Local Agricultural Information Resources

3. Agricultural Innovation Development and Dissemination

(i) Assist Borrower in reorienting its upstream technology development activities toward the needs of poor farmers through supporting staffing, operational costs, equipment, and consultancy services

(ii) Establish a fund to be administered by the AIATs in the target provinces

4. Project Management for the PCMU, established at IAARD and the PIUs at five districts

Status of Implementation Progress (Outputs, Activities, and Issues)

Implementation progress of the individual components is estimated as follows:

A. Poor Farmers Empowerment (47%): Investment activities were planned for 520 villages and completed in 403 villages. Village public investments consist of construction of farm-to-market roads, storage facilities, minor irrigation schemes, technology assistance, farmer training, information technology, soil and water conservation activities, and rural markets.

B. Development of National and Local Agricultural Information (45%) A national farming website has been established under URL-Address:

C. Support for Agricultural Innovation Development and Dissemination (64%): Several technologies required by poor farmers in the Project areas have been identified and the IAARD has generated and developed required technologies. .

D. Project Management (49%): The PCMU and the 5 PIUs have been established and have been fully operating in project management and coordination activities. Establishment of project offices including posting of key personnel completed, procurement of office equipment and vehicles ongoing with about 50% of total requirements procured. The consulting firm and national and local NGOs are fielded.

As of Project Completion of 31 October 2010:

Component A: Poverty targeting of poor farmers has been strengthened beyond the targeting of poor districts because village investments were targeted to poorer villages within these poor districts. Villages within the target districs have been ranked according to their poverty incidence based on available village data. Only villages wtih more than 40% of households classifieds as not yet prosperous or minimally prosperous were included in the Project.

Component B: Even at project closure, the PFI3P Project will still continue its activities. The main stakeholders will have to continue the project, especially the Indonesian Agency for Agricultural Research & Development (IAARD) (the former EA), the empowered farmers, other related government sector institutions, NGOs (as the beneficiaries), and local government authorities.

Component C: The development assistance requires greater and closer coordination among the different government and non-government bodies to be more efficient and effective to avoid unnecessary waste of resources, and expand the benefits from development investments. As a result of the availability of technology and innovation for the marginal rainfed dry areas, the farmers have begun to recolonize the previously idel land in their villages. Thus, this Project has been instrumental in the extensification of agricultural production.

Component D: A well-structured program on farmers' mobilization, empowerment, human resource building, accessibility of information/technology, and village institutional strengthening were systematically carried out to prepare the farmers in carrying out the activities designed to help them improve their farming and marketing operations. Hence, the farmers are able to improve their standards of living through their improved understanding and readiness to apply what they learned.

Geographical Location Districts of Temanggung and Blora in Central Java, East Lombok in West Nusa Tenggara, Ende and East Nusa Tenggara, and Donggala in Central Sulawesi.
Safeguard Categories
Environment B
Involuntary Resettlement
Indigenous Peoples
Summary of Environmental and Social Aspects
Environmental Aspects The initial environmental examination (IEE) of the sample subprojects has shown that the Project would not create any significant environmental impacts. The minor environmental impacts associated with increasing agriculture productivity will be minor and mainly relate to increased exposure to agrochemicals, and therefore could potentially increase health problems related to agrochemical use. To mitigate, training on health and safety for utilizing agrochemicals will be included in the curriculum of the village facilitator training program. The other potential impacts are primarily related to civl works, particularly for rehabilitation and improvement of village roads and irrigation. Mitigation measures to address environmental impacts are provided in the management plan of the IEE.
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Identified during project appraisal.
During Project Implementation Stakeholder consultations were undertaken.
Business Opportunities
Consulting Services

A team of 24 consultants for a total input of 796 person-months of the following international and domestic consulting services will be required to prepare a detailed implementation plan and procedures for the Project during the first year, and support the subsequent 4-year implementation phase. Person-months are given in parentheses. The international experts (54) will be specialists in

(i) project implementation (team leader) (27); (ii) management information systems (12); (iii) participatory planning (4);

(iv) agricultural marketing (4); (v) economics/financial analysis (4); and (vi) information management (3). The domestic experts (742) will be specialists in (i) project implementation (60); (ii) district liaison (five officers) (240); (iii) participatory planning (27); (iv) national monitoring and evaluation (60); (v) district monitoring and evaluation (five persons) (240); (vi) economics/financial analysis (6); (vii) gender (27); (viii) management information systems (16); and

(ix) information management (6); as well as an ombudsperson (60). An international consulting firm in association with domestic consultants will be selected using the full technical proposal procedure in accordance with ADB?s Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for the engagement of domestic consultants. The quality and cost-based selection method will be used for engaging consultants.

A national NGO with extensive experience in agriculture and rural livelihoods will be recruited by the PCMU through competitive bidding based on eligibility and evaluation criteria established by the Project to supervise and coordinate local NGOs or community organizations, under subcontracts, in implementing the village level activities of the Farmer Empowerment component. A provincial consortium of NGOs/community organizations, through a series of consultations during the first year of the Project, will nominate a set of NGOs/community organizations that are capable of participating in the Project and meet criteria established by the Project. The national NGO will select local implementing NGOs from this nominated set and sign contracts with them to implement project activities at the village level.

Procurement Procurement under the Project will follow ADB?s Guidelines for Procurement. Contracts for civil works will be relatively simple for renovation of district offices, valued at less than $100,000 equivalent, and will be carried out using local competitive bidding procedures acceptable to ADB by the PIUs. The PIU will also be responsible for procurement of office furniture through local competitive bidding. The PCMU will carry out procurement of vehicles and equipment estimated to cost more than $100,000 but less than $500,000 using international shopping procedures. Civil works for community-managed village infrastructure, including tubewell irrigation schemes and access roads, financed from the village investment funds may be carried out by communities. Communities shall provide labor and appropriate technologies. Materials and services for such civil works estimated to cost less than $30,000 equivalent shall be procured through direct purchase.
Responsible ADB Officer Agustina Musa
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, SERD
Executing Agencies
Agency for Research & Development
Dr. Haryono
Jl. Ir. H. Zuanda 193
Bandung 40135
Agency for Agricultural Research and Development
Dr. Gatot Irianto
Jalan Ragunan No. 29 Pasar Minggu Jakarta 12540 Republic of Indonesia
Ministry of Agriculture
Secretary General
JL Harsono, Rm. No. 3 Pasar Minggu Jakarta 12550
Concept Clearance 08 Mar 2001
Fact Finding 23 Jul 2001 to 24 Aug 2001
MRM 05 Oct 2001
Approval 15 Aug 2002
Last Review Mission -
PDS Creation Date 12 Dec 2006
Last PDS Update 01 Feb 2011

Loan 1909-INO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Aug 2002 17 Jan 2003 17 Jul 2003 30 Jun 2008 31 Oct 2010 05 Jan 2011
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 56.00 Cumulative Contract Awards
ADB 56.00 15 Aug 2002 49.19 0.00 97%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 15 Aug 2002 50.76 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory - - -
Title Document Type Document Date
Poor Farmers' Income Improvement Through Innovation Project Project/Program Completion Reports Dec 2011
Poor Farmers’ Income Improvement through Innovation Project Project Procurement-Related Reviews Dec 2007
Poor Farmers' Income Improvement Through Innovation Project Reports and Recommendations of the President Jul 2002

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation
Title Document Type Document Date
Indonesia: Poor Farmers’ Income Improvement through Innovation Project Validations of Project Completion Reports Dec 2013

Related Publications

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  • 31 May 2009 | Project Result / Case Study

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