PRISMA supports AIP-Rural’s goal of contributing to a 30% or more increase in net incomes for 300,000 smallholder farmer households in eastern Indonesia by 2018.
Why we work in this sector
Agriculture remains a significant sector, and critical to the livelihood of Indonesia’s rural poor. If developed effectively, agriculture can reduce poverty. PRISMA increases the competitiveness of poor farmers by providing better access to private and public services. PRISMA also influences the wider policy, regulatory and infrastructure environment. PRISMA works with private and public sectors to help spur growth in the value chain by reducing constraints and barriers to farmer productivity, performance and market access.
PRISMA has identified several agricultural sub-sectors (see our Commodities) that were assessed as (1) being important to large numbers of low income farmers, (2) have growth potential, and (3) show clear signs that this growth potential will lead to farmer income growth. These commodity sub-sectors are under constant review and may change over time. For example, some sub-sectors may drop out because of underperformance, while others will need to be added to replace them.
After a sub-sector is chosen, value chain studies are commissioned to analyse systemic constraints to both sub-sector and farmer income growth for that area. Specific interventions are then designed to address these constraints. This process of identifying, assessing, retaining or rejecting sub-sectors is continuous throughout the program. The retention or rejection of a sub-sector will depend on a sub-sector’s medium term contribution to AIP-Rural’s goal of income change for a significant number of low income farmers.
PRISMA is based on market-led agricultural systems development using an approach known as "Making Markets Work for the Poor" (M4P). At the core of this approach is the theory that all people living in communities trade goods and services with one another to meet their needs – so they are already engaging in markets. PRISMA aims to grow markets for commodities that are likely to increase the income of poor farmers. PRISMA expands or enhances farmer access to change, inducing inputs, know-how and public services through working with private and public sector market actors.
The way PRISMA does this is by looking at the underlying causes as to why the market system is not benefitting farmers. It looks for solutions to this problem by developing new business models with the private sector and other stakeholders in the system. These business models enable farmers to get better access to inputs (for example: seed, fertiliser, access to credit) and output markets (for example: collectors, transporters, processors, marketers, buyers).
The model works because everyone involved in the approach has an incentive to participate: the private sector company gets new markets to sell its product; the collectors get greater market share at a higher price; and farmers get a better price for their commodity which contributes to an overall increase in household income.
M4P projects are sharply contrasted to those of direct delivery because they (1) examine the transactions that are common to a large group of farmers, (2) identify the ones that have most significant impact and (3) then looks for actors in the market place that have an incentive to repackage these transactions in a way that creates more value. Because companies depend on other businesses to either supply them with goods or to buy their products, the change agents in market development are often companies who see this change as part of their core business model. The M4P approach focusses on systematic change to deliver long-term impacts for all market actors.
The target beneficiaries
The target beneficiaries for PRISMA are smallholder farmer households.