Promoting climate resilience businesses in Indonesia

Promoting climate resilience businesses in Indonesia

Indonesia - 26 March, 2022

In February 2022, a major step was taken in Ketapang District, West Kalimantan Province, that allowed local climate-friendly and community-based enterprises to show handicraft, organic fertilizer, fruits, vegetables, and mushrooms that they produce to the policy maker, investors, and wider customers at the district level– and importantly, to share what they need to expand their businesses.

Though many rural enterprises are not fully aware of their positive impacts to the environment, most are already incorporate sustainable management of natural, forest, and other resources into what they do. But as their businesses are at a small scale that are not bankable enough, many find challenges to access loans or other private financial support available to ‘mainstream’ businesses. In addition to that, limited business management skills hampered local enterprises to take off. Moreover, local smallholder farmers are also struggling to secure their source of income with the threat of palm oil expansion.

Business competition and Farmers Field School are two of several approaches by Tropenbos Indonesia to improve livelihood options as part of climate adaptation strategies for smallholder farmers and local community in two sub-landscapes in Ketapang District: Pawan-Pesaguhan and Simpang Dua.

In 2021, Tropenbos Indonesia began what is aimed to be a series of climate friendly and community-based business competitions—called by the acronym KURRI in the Bahasa language—to provide supports for local enterprises to improve climate resiliencies, enhance technical capacities, expand the market, and link to potential investors to be fully equipped to upscale their businesses. These activities is part of Mobilizing More for Climate (MoMo4C), a five-year program (2019-2024) supported by the Netherlands Ministry of Foreign Affairs, and implemented by IUCN NL, WWF NL and Tropenbos International.

KURRI have double objectives. First is to get to clear view of the range of different local businesses that help to preserve and improve the environment around them. The second objective is then to support these selected businesses by linking them to financial service providers, building their capacity through enterprise skills training, and opening options to new markets. Lessons are also being learned with a parallel process through the MoMo4C programme in Ghana, and in both countries, this work builds on previous participative analyses of financial flows and their impacts.

In the first round of the competition in 2021, a ‘call’ was released in February 2021, that led to a pre-selection of 14 potential community business applicants who received intensive technical training so that each could develop a business plan. Then, five ‘finalists’ with the most promising plans were identified in June 2021, by an expert panel including government agencies, local financial institutions, NGOand local business champion, who all assessed the business plans both on paper as well as in the field. Criteria for the selection for the finalists included production, marketing, finance, management, as well as impacts towards landscape objectives. All finalists were then provided with support packages until the end of 2021 to implement their business plans, with further technical assistance, tools and materials, and assistance that linked them to other relevant stakeholders (including local financial service providers) within the landscape that could help them to develop their businesses.

Towards the end of the competition, all finalists joined an exhibition where they showcased their products and met with potential investors and buyers in an event called “Business Meeting Day and Farmers Field Day” conducted in Ketapang Town Hall on 10 February 2022. This event was organized by Tropenbos Indonesia and the Community and Village Government Empowerment Agency (PMD), and attended by the Regent of Ketapang himself, Martin Rantan, and leaders of government agencies, financial providers and private companies.

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Read also: Celebrating Business Meeting Day and Farmers Field Day: Efforts to maintain climate resilience in Ketapang District, West Kalimantan Province

The announcement of KURRI competitions winners was made, and field school certificates presented. They shared directly what they had learned and how they had benefitted – and also, sought out new possible funding sources and other support that could help to further grow their now developing businesses. As one of KURRI participant from Simpang Dua Landscape had already received funding from Credit Union for their horticulture business, others has successfully increased their production capacity, acquired new market opportunities, and improved their financial management skills.

The different enterprises displayed their products and there was rich and open conversation between all levels – like a true market day in fact! Local government and potential investors saw (and buy) the products and heard about the progress made in the last few months of KURRI training, and from the farmer field schools. An intensive dialogue session was also conducted between participants, local government and financial institutions as to how to most effectively share, learn and replicate best practices of these two programs into the future. The Regent of Ketapang in his opening and closing speech encouraged government agencies and village government to adopt and replicate KURRI approach within their economic and environment programs.

Furthermore, in 2022, Tropenbos Indonesia will conduct district level competition for SMEs category to find more established businesses with bigger impacts to climate change adaptation measures, in addition to the micro-business category for small scale enterprises within the two assisted sub-landscapes. Several additional villages will also be involved in KURRI Micro with the financial support from KALFOR project (Ministry of Environment and Forestry of Indonesia – UNDP).

Tropenbos Indonesia will also continue its support to 2021 KURRI participants to monitor the progress and impacts, as well as to established a strong network that can inspire other community businesses and attract more participants in the next cycle of the competition in the coming years.

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As Tropenbos Indonesia Director Dr Edi Purwanto summed up: "We hope that the efforts we make through KURRI competitions and farmers field schools can inspire the emergence of local movements for adaptive community efforts against the threat of climate change, not only in the agricultural sector but also in small enterprises in the whole of Ketapang district".