Page 199 - Contributed Paper Session (CPS) - Volume 7

CPS2058 Dewati W. et al.
entrepreneurs in Aceh are having difficulties to obtain trust from local banks
because loans installments are often paid irregularly by the debtor. This is
caused by uncertain harvest period and weather which affect income in the
coffee business. In addition, the unavailability farmers’ assets to borrow money
become an obstacle when these entrepreneurs want to loan some money from
a bank. Another obstacle is the kinds of seeds. The availability and the use of
superior seeds that is suitable with the contours, climate, and nutrients in the
plantation area is still not widely recognized and the process of fertilization
and weeding is still rarely done.

Chart IV.3. Perception of Macro Incentive Priorities Chart IV.4. Perception of Condition Priority of
Production Factors
The next problem is regarding work regulation and skills which are
related to farmer cultivation. The current condition of farmers who
understand the method and process of cultivating good coffee is limited as it
affects the increase in coffee productivity. In South and North Sumatra, it is
farmers' bad habit to harvest coffee that is still green or not fully immature.
This habit is called rainbow picking which means harvesting coffee that is still
immature to get money from exporters immediately. The selling value of
unripe coffee is lower than the ripe ones and its quality decreases. Planting
and harvest method are still in traditional way and the insufficient technology
that is caused by the high cost of production equipment such as the grain
threshing machine would affect the coffee productivity.
Some of the problems that often occur in coffee plantations include
land management that is still traditionally performed by farmers both in
the process of watering, fertilizing, picking and weeding on a small
economic scale. This results in a relatively small volume of good quality
products by farmers. Apart from the technical side of coffee cultivation, there
are obstacles in terms of products and the development of processed coffee
products. This problem includes the mismatch between supply and demand
where the composition of the Sumatra coffee plant is still dominated by
Robusta coffee (reaching 73% of total production), while the majority of
international market demand is Arabica coffee. Indonesia faced difficulties to
produce high value-added coffee products, with processing coffee into the
form of extracts, essences and concentrates is still limited to around 4.1% of
the total Sumatra coffee exports. Furthermore, there are obstacles in terms
of Trade and Logistics Facilities related to infrastructure. The main

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