A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.Suze Orman

Happy Birthday Indonesia!

August 30, 2016

This week marked Dirgahayu, Hari Merdeka, the 71st anniversary of the Indonesian declaration of independence on August 17, 1945. From my office window I enjoyed watching a grand performance by the military and local government to mark the occasion.

In a happy coincidence, my Good Return t-shirt matches Merah Putih or red and white – the colours of the Indonesian flag! I found it a good time to consider Indonesia’s achievements, but also to think about what needs to be addressed into the future.

Indonesia’s poverty line is currently set at 344,809 Indonesian Rupiah per month – just 34 Australian dollars.

The number of Indonesian people still living below the poverty line stood at 28.51 million people in September 2015, more than 11 percent of the total Indonesian population. About 1.1 million people had become newly poor since the previous September due to a slowing of national economic growth.

Due to price volatility of essential products like rice and petrol, many millions of people in Indonesia are on the cusp of poverty at any  given time. The rate of absolute poverty is highest in western Indonesia and in rural rather than urban areas.

Good Return has worked with Keling Kumang Group in rural West Kalimantan for a little over two years.

Because of West Kalimantan’s extremely hot, dry climate, many fruits and vegetables must be imported from Java or Sumatra. Infrastructure is also very poor. This makes purchasing food significantly more expensive than elsewhere in Indonesia.

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Climate change is already having major impacts here, with reduced rainfall, higher temperatures and unpredictable growing seasons. This means decreasing crop harvests, pests and diseases, and reduced fish stocks, meaning that food insecurity and child malnutrition is a growing threat.

In Kalimantan, out of four provinces, only West Kalimantan suffered a poverty increase 2014-15.

This reflects its excessive dependence upon forestry and the agricultural sector here. Illegal logging and timber smuggling to Malaysia remains a major problem, with scientists warning that West Kalimantan will “become a desert” if allowed to continue. It is high levels of poverty that drives these industries.

In line with our mission to focus on the most-needy communities, Good Return’s work in West Kalimantan aims to empower those living in poverty to build stronger, more sustainable livelihoods for themselves whilst also preserving biodiversity.

We are currently supporting farmer cooperatives to work towards Roundtable on Sustainable Palm Oil (RSPO) certification. RSPO is an association of palm oil producers, retailers, investors and NGOs that works to implement global standards to maintain environmental and social outcomes in the industry. It is supported by the World Wildlife Fund (WWF) and Rainforest Action Network.

Our Farmer Field School aims to reduce deforestation and bolster environmental sustainability of existing palm oil plantations by educating farmers about Good Agricultural Practices (GAP). Smallholder farmers are taught about how to optimally use fertiliser, reduce their use of harmful pesticides, and the benefits of preserving forest adjacent to one’s farm, so as to preserve their land’s water table.

These measures help to reduce input costs and increase yields of farmers, so as to improve livelihoods, as well as improving environmental outcomes. Increased incomes will boost the appeal of agricultural livelihoods as opposed to forestry and will likely influence other farmers in their community to adopt GAP on their own plantations.

Unable to secure capital from a regular bank due to their low income and remote locations, farmers can access loans through Credit Union Keling Kumang to invest in replanting their crops, building farm infrastructure, purchasing tools or even sending their children to be educated at university.

Indonesia’s future is bright. Good Return hopes that by empowering people living in poverty, this future can be more equitably shared amongst all Indonesians.

Categories: Field Support Officers, Indonesia

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