Project helps food-based SMEs expand business opportunities

Sri Wahyuni, The Jakarta Post, Yogyakarta

Until some eight months ago, palm sugar producer Mujiono, 33, of Kerto village, Pleret subdistrict, Bantul regency, did not realize the importance of attractive packaging and focused marketing.

The same was also true for a group of housewives in Ngruno hamlet, Karangsari village, Pengasih subdistrict, Kuloprogo regency, producing various snacks from a range of agricultural products including roots, tubers, fruits and leaves.

But thanks to a U.S-funded agricultural, food-science and technology project, palm sugar producer Mujiono said he has learned how to not only produce more in terms of volume, but to better package his products for sale.

The Southeast Asia Food and Agricultural Science and Technology (Seafast) Project is run jointly by the Bogor Institute of Agriculture (IPB) and the Borlaug Institute of the Texas A & M University System in the United States.

The project has been funded by the United States Department of Agriculture (USDA), through its foreign agricultural service program.

Organizers said it is a loan project aimed at providing useful, practical food-science research, technology and technical assistance to businesses in need.

The project provides an educational facility and micro-credit loans to help SMEs (small and medium enterprises) in Indonesia to help them develop and expand their food-based businesses.

"Our goal is to help SMEs throughout Indonesia improve food safety, increase their income and enhance their business processes and productivity," Seafast project's chief Steven Gregory said.

Speaking during a visit to some SMEs in Yogyakarta, Gregory said to help reach the goal more effectively the project had been focused at the grass roots level.

He said they achieved this by offering a specially designed program that not only provided loans to SMEs but also gave business owners access to "practical, useful on-site training".

"The training can be applied to their daily business operations," Gregory said.

The training is provided free of charge to those taking up a loan.

The program offers a series of four modules covering topics including basic hygiene and food safety, food production, processing, packaging and product development.

"You may say that we position ourselves as the R & D (Research and Development) unit of the SMEs we are involving in the program," Gregory said.

"Our office has always cooperated with local industry, trade, and cooperative offices in the respective regions."

Sudarti of KPK Emping Gurih -- a small home-based business group in Ngruno hamlet, Karangsari, Pengasih, Kulonprogo -- said as a business owner, being treated not just as debtors was the most important aspect of the loan program.

"We are continuously supervised to develop our business," she said.

Sudarti said her small business group had learned how to better manage the production process as well as their onsite hygiene.

She said staff now all wore masks and aprons and before entering the premise, removed their footwear.

KPK Emping Gurih currently employs 14 housewives, including Sudarti, and has so far received a total of nearly Rp 54 million (US$6,000) in loans from Seafast.

The loans have been disbursed in three batches within the last year.

Sudarti said most of the loaned funds had been used to purchase basic food processing and packaging equipment, which has seen an increase in productivity and efficiency.

"Alhamdulillah (Praise be to God), we are not just able to earn more now," she said.

"We also save more time to spend with our families or to do other activities."

Sudarti said she also worked as a traditional masseuse, offering treatments for new-born babies, children and post-natal mothers.

Before implementing their business improvements, Sudarti said she and her co-workers earned some Rp 3,000 a day each, working from 7 a.m. to 3 p.m.

"Now we can earn Rp 10,000 a day each for working only from 8 a.m. to 2 p.m."

She said the business paid its first two loans off months ahead of schedule, which allowed it to apply for the third loan.

Officially launched at the end of 2006, Seafast loans have been provided to 105 SMEs in Yogyakarta.

The total amount in loans distributed is some Rp 260 million, said loan program manager Khres Senduk.

Khres said Yogyakarta was deliberately chosen after it was hit by the earthquake that devastated the province and parts of Central Java in May 2006.

"But we also have some similar projects in Bali."

Khres said a typical micro credit loan ranges from about US$50 to US$200 and SMEs should pay this back within a year with an interest of 2 percent per month in a declining balance scheme.