Shop takes stand on organic products

Shop takes stand on organic products

By Tarko Sudiarno and Nugroho CH

YOGYAKARTA (JP): There is nothing special about the shop from
the outside, and what is has to offer, rice, is the staple food
of most Indonesians,

But it's how it is grown and sold that makes a difference.

Located on Jl. Magelang km 7 in Yogyakarta, Sahani sells
organic rice, cultivated without the use of chemicals or
pesticides. It is still unusual in the country, and its price and
the requirements needed to qualify as organic rice keep it out of
the mass market.

Its trading system, what it calls "fair trade", is unique
since it attempts to take the farmers' perspective. The unique
system prompted the shop's founders -- the Consortium of Fair
Trade Community which comprises a number of non-governmental
organizations and individuals -- to name the shop Sahani, short
for Sahabat Niaga Petani (Farmers' Trading Friends).

The shop, which was set up in July 1997, aims to reflect their
concern and solidarity toward farmers in fighting unfair
commercial practices.

In its operations, Sahani markets organic agricultural
products of 13 groups of farmers from East Java, Central Java and
Yogyakarta. Initially, the shop only sold rice, but in the last
two months, it has started selling organic vegetables cultivated
by farmers in Magelang regency.

"At first, Sahani was set up as a laboratory to fight the
conventional market system. But after two years, we decided that
it should be more than just a laboratory and so we turned it into
an economically-accountable business institution," said manager
Andrianto.

Its marketing system -- defined by the management as "fair
marketing" -- is particularly important because farmers usually
encounter problems in marketing their products.

According to Andrianto, the fair marketing concept is defined
by three basic issues.

First, transparency, meaning that every buyer or customer
knows precisely where the rice was produced along with the name
of the farmers' group producing it and a basic price set by the
farmers.

Second, redistribution of profit. Sahani's profits from
selling the agricultural products are mostly returned to the
farmers, with allocations of 30 percent for the group of farmers,
40 percent for the group's savings and the remaining 30 percent
for Sahani. The profit is returned in the form of cash and the
groups of farmers can freely use the money.

"This is one thing that makes Sahani different with other
conventional business institutions. Conventional business
institutions are usually not transparent about their profits,
while we are. We also return most of our profits to the
producers, while most conventional business institutions prefer
to invest their profits," said Andrianto.

Third, Sahani only accepts agricultural products free of
chemical input.

The shop markets eight kinds of rice -- mostly local
varieties. It also sells 15 kinds of organic vegetables, which
are sold in packages. Each package costs Rp 30,000 and the
vegetables keep for four days to seven days.

Due to the different methods used in their cultivation and the
restrictions on where the crops can be grown, prices of organic
rice and vegetables are higher than nonorganic ones.

A kilogram of the organic rice is about Rp 500 more expensive
than a kilogram of nonorganic rice.

Hard work

After three years in business, Sahani now has about 125
regular customers in Bandung, Jakarta and Yogyakarta.

But marketing organic agricultural products is not easy in the
country.

Andrianto acknowledged the organic label is no guarantee of
success. Rice, as Indonesians' staple food, is consumed in large
amounts, and price is an important determining factor.

"A price difference of Rp 100 a kilogram higher will already
make consumers think twice," Andrianto said.

Prospective customers also require official proof of the
rice's organic status, which is from a laboratory test validated
by Sucofindo's branch in Semarang.

He said a laboratory test for verification costs Rp 500,000.
At least five chemical items must be tested before a product can
be scientifically labeled organic.

"Most farmers, as Sahani's pillars, cannot afford the test,"
Andrianto said.

Limited funds and human resources are among the problems
hampering the shop's efforts to spread the word about organic
rice, and one of the reasons why Sahani can only accommodate 5
percent of total production from its groups of farmers.

"The remaining portion of the farmers' total production is
sold in the market, meaning that it is sold at a lower price in
order to compete with nonorganic agricultural products. In the
end, farmers cannot, unfortunately, enjoy profits like they
receive from Sahani," Andrianto said.

Opening branches in cities like Bandung, Jakarta and Surabaya
is still a dream for the shop, and big city consumers have to pay
delivery costs to receive the rice by order.

Marketing methods include requiring four of its employees to
call five to 10 people -- whose names are randomly taken from the
telephone directory -- every day to offer their products.

"Usually, one or two people will place their orders. This is
only one of our marketing ploys," Andrianto explained.

The management is planning to erect giant statues of two
farmers, one male and one female, in honor of its producers.

"The statue will be put up in front of this shop to tell
people there's an institution in Yogyakarta which cares about the
fate of farmers. If Cihampelas (in Bandung) can boast its giant
pair of jeans to inform people that it's a jeans city, why can't
we try it here with a statue of two farmers?"