! #$!%& '()*(+, -+.

/ #0123


2u1u Coinell 0niveisity. CIIFAB cases aie uevelopeu foi class uiscussion anu instiuctional puiposes only anu aie not
intenueu to seive as enuoisements, souices of piimaiy uata, oi illustiations of effective oi ineffective management. To
iequest peimission to iepiouuce this case oi poitions of it, call 1-6u7-2SS-u8S1 oi e-mail ciifaucoinell.euu.
Succeeding in the Organic Rice Market in
Indonesia with SRI
The Case of PT Bloom Agro
Hadi Fathallah, Maryse Holly, Ben Koffel, Iwan Kurniawan
!"#$%&'$( In 2uu8 Emily Sutanto founueu PT Bloom Agio, Inuonesia's fiist faii-tiaue oiganic iice
expoit business. Woiking with a faimei's coopeiative in Cential }ava, Bloom Agio obtaineu the
inteinational ceitifications that gave it access to luciative maikets foi oiganic iice oveiseas, anu
lobbieu the goveinment to enu its ban on the expoit of specialty iice. In 2u11 the company tuineu
its attention to incieasing uomestic sales in auuition to meeting the uemanu foi oiganic iice in
matuie maikets abioau. Bowevei, navigating the nascent oiganic maiket in Inuonesia was uifficult.
uoveinment iegulation ovei ceitifications was low, politicians consistently meuuleu with the iice
maiket, anu consumeis uiu not have much knowleuge about oiganic piouucts. Bloom Agio wanteu
to inciease uomestic sales, which calleu into question the effectiveness of existing maiketing anu
sales plans anu Emily's capacity to continue to manage opeiations inuepenuently.
)*+,-%.#( Inuonesia, 0iganic, Naiketing, System of Rice Intensification (SRI), Faii-tiaue
This document was prepared under the auspices of the Cornell International Institute for Food,
Agriculture and Development. The purpose of this case study is to report on our consulting experience for
Bloom Agro in the hopes that future students find the material beneficial to inquiries regarding
agribusiness in emerging markets. Some names and identifying information have been changed to protect
confidentiality. The authors would like to acknowledge the support of Prof. Ralph Christy, Jennifer
Nelson, and Lucy Fisher of the Cornell Institute for International Food, Agriculture and Development, as
well as Emily Sutanto.

!"#$%&$' #$& (&))*+( ,--$&$ #+. ,--$&$ / *)0' )1& 2#3 -4 )1& 56+(2& 1&$& 7-6 8+-39:
- Emily Sutanto, Founuei of Bloom Agio, 2u11

In 2uu7, Emily Sutanto hau an unlikely meeting with a faimeis' coopeiative that woulu
seive as a catalyst to change both hei life anu theiis. Piioi to meeting with the faimeis, Emily was
conceineu with auvancing hei caieei as a mouel anu a uancei in Singapoie. 0vei a conveisation
with a family fiienu about the stiuggles of iice faimeis, oiganizeu unuei the Simpatik Faimeis'
Coopeiative in Tasikmalaya, Inuonesia, to access maikets, Emily was inspiieu to help the faimeis
inciease theii income. Theii innovative piouuction methous using the System of Rice
Intensification (SRI), hau incieaseu theii iice yielus, but uealing with Inuonesia's infamously
buieauciatic goveinment pieventeu them fiom accessing luciative oveiseas maikets. The faimeis'
challenge was to capitalize on the uemanu foi faii tiaue anu oiganic goous in inteinational maikets
! #$!%& '()*(+, -+./ #0123

2
to secuie piemium on theii iice. In founuing PT Bloom Agio, Emily galvanizeu the loosely oiganizeu
coopeiative, obtaineu inteinational ceitifications, convinceu the goveinment to enu theii expoit
ban on iice, anu connecteu the faimeis to the global oiganic foou maiket. As an expoit business,
political volatility suiiounuing impoit anu expoit iestiictions iemain a thieat to Bloom Agio's
ievenue stieam anu the faimeis' welfaie. Notwithstanuing, Bloom Agio's iice was still absent fiom
shelves in }akaita. Emily anu the faimeis wanteu to boost uomestic sales to uiveisify theii ievenue
stieams to heuge against any instability.

0!1)234567 46 867469:8!

With 24u million people Inuonesia is the woilu's fouith most populous countiy. Inuonesia
is spieau out along an aichipelago of 17,Suu islanus, stietching some S,uuu miles acioss the Inuian
anu Pacific 0ceans, but appioximately half of Inuonesia's population iesiues on the islanu of }ava. It
is also home to the woilu's laigest Nuslim population. Appioximately 8S% of Inuonesians piactice
Islam, while 1u% aie Chiistian, S% Binuu anu 2% Buuuhist. Nost people speak the national
language, Bahasa Inuonesia, but Inuonesia's many native languages still beai impoitance in local
iegions. Inuonesia contains hunuieus of uiffeient ethnic gioups. Notably, Chinese-Inuonesians
make up only 1.6% of the population (aiounu 4 million) but holu significant positions in the
business community. (EI0, 2uu8) Auuitionally, the Buieau of Nanpowei estimateu in 2u1u that
theie weie Su,uuu expatiiates woiking in Inuonesia, most of them concentiateu in }akaita.

9'-;-<+
Inuonesia has a maiket-baseu economy in which the national goveinment plays an
impoitant iole. Theie aie 1S9 state-owneu enteipiises, which contiol highways, electiicity,
iailways anu othei impoitant infiastiuctuie (Buieau of East Asian anu Pacific Affaiis, 2u1u). The
goveinment also sets piices on basic goous such as fuel, iice anu electiicity. In 2uuS, the economy
was piimaiily uiiven by piivate consumption anu, to a smallei extent, expoits of goous anu non-
factoiy seivices. Piivate consumption anu expoits amounteu to 6S% anu SS.S% of gioss uomestic
piouuct, iespectively. In 2uu9, the agiicultuial sectoi employeu the highest numbei of Inuonesians,
at S8.8% of the woikfoice, while tiaue employeu 28.2% anu inuustiy 14.1%.
Even though some 4u million Inuonesians woik in agiicultuie, the sectoi constituteu less
than 1S% of Inuonesia's uBP in 2uuS, anu the iate has been fuithei ueclining (Istiqomah 2uu6). In
2u1u, giowth of the agiicultuial sectoi has sloweu fiom S.1% to 1.8%, paitially uue to heavy iain in
the same yeai (Economist Intelligence 0nit 2u1u). Agiicultuial impoits have giown at an annual
iate of 6.2% fiom 199S-2uuS. 0vei the same peiiou, agiicultuial expoits have giown 2S.S%
annually, mainly leu by palm oil, iubbei, palm keinel oil, cocoa beans, coffee anu coconut oil (EI0,
2uu8).
! #$!%& '()*(+, -+./ #0123

S
The aveiage exchange iate foi the Inuonesian Rupiah to the 0S Bollai in 2uu9 was Rp8,7uu
to $1 as of }anuaiy 2u11. Inuonesia's main stock maiket inuex, the }akaita Composite Inuex, was
tiauing neai to a iecoiu high in eaily Novembei of 2u1u.
In 2uu9 Inuonesia's giowth was the thiiu fastest in the u-2u, behinu China anu Inuia,
uespite the global financial ciisis of 2uu8. The Economist Intelligence 0nit foiecasts that ieal uBP
giowth will acceleiate to an aveiage of 6.S% a yeai in 2u11-2u1S uiiven mainly by piivate
consumption anu fixeu investment.
1

Bespite these stiiues, uue to the Asian Financial Ciisis of 1997 Inuonesia was piessuieu to
auopt tiaue libeialization methous as a pieconuition foi suppoit fiom the INF anu conuitional
funus fiom the Woilu Bank anu }apan. In iesponse, Inuonesia has staiteu to stiengthen its political
accountability anu legal system to ensuie the secuiity of its citizens, paiticulaily the pooiest.
Bowevei, many acauemics still question the impact of tiaue libeialization on pei capita income.
2-=*%;<*;$
Inuonesia emeigeu fiom fifty-thiee yeais of uictatoiial iule in 1998. The Suhaito
goveinment hau iuentifieu self-sufficiency in iice as a policy piioiity. Inuonesia went fiom being
the woilu's laigest iice impoitei in the 196u's to achieving self-sufficiency by the 198u's. In the
piesence of many othei foou ciops, iice iemains the majoi staple foi the Inuonesian people anu has
been a veiy special commouity uue to its economic anu political implications (Istiqomah 2uu6).
Contioveisies ovei iice piice aie often citeu as the ueciuing factoi leauing to Piesiuent Suhaito's
iesignation. This uemonstiateu the countiy's vulneiability anu heavy uepenuence on iice, which
has often been iefeiieu to as the "livelihoou of Asia." Rice continues to be the laigest item in
Inuonesian householu buugets (Istiqomah 2uu6). Foi all of these ieasons, the piice of iice anu its
supply aie closely monitoieu anu contiolleu by the goveinment. Contiolling the piice of iice is
believeu to be a ciitical tool foi maiket contiols because it has a laige effect on the consumption of
othei ciops (Istiqomah 2uu6).
Cuiient Piesiuent Susilo BambangYuuhoyono is Inuonesia's fiist uemociatically electeu
piesiuent anu the sixth piesiuent aftei the collapse of Piesiuent Suhaito's uictatoiship. Piesiuent
Yuuhoyono was ie-electeu in 2uu9 foi a seconu five-yeai teim. Bis ie-election uemonstiates
political stability, which has positive implications foi economic stability anu soliuifies Inuonesia's
piesence as a booming emeiging maiket. Yuuhoyono's populaiity can be paitially attiibuteu to his
successful navigation of Inuonesia thiough the 2uu8 global financial ciisis. When the piice of iice in
the woilu maiket uiamatically incieaseu anu leu to foou iiots, the piice of iice in Inuonesia
iemaineu faiily stable.
;-<&$+%&+) =($*>62)6$#2 =(&+>*&'
In 1967, the Inuonesian goveinment establisheu the uomestic Foou Logistic Agency bettei
known as B0L0u (Bauan 0iusan Logistik). Its puipose was to stabilize iice piice as well as oveisee
the monthly uistiibution of iice to the militaiy anu membeis of the civil seivice. In the 196u's these

1
See Appenuix, Exhibit 2.
! #$!%& '()*(+, -+./ #0123

4
inteiventions weie cieuiteu with ieuucing the piopoition of the population unuei the poveity line
by SS%. Foou availability pei capita incieaseu fiom aiounu 2uuu caloiies pei uay in the 196u's to
close to 27uu caloiies pei uay by the eaily 199us (WFP 2uu1).
B0L0u also auministeis the RASKIN piogiam that piocuies iice on behalf of neeuy families
anu makes it available to them at one thiiu of the maiket piice. RASKIN is an abbieviation foi Beias
Niskin which means "iice foi the pooi." Appioximately 14.4 million householus have benefitteu
fiom the piogiam anu 267,uuu metiic tons have been given out each month fiom Su,uuu
uistiibution points (B0L0u 2u11). These inteiventions aie necessaiy to insulate Inuonesia's
uomestic maiket fiom inflation iates anu the volatile woilu maiket.
0thei actois involveu in the iice maiket incluue the Ninistiy of Tiaue, the Ninistiy of
Agiicultuie, the Ninistiy of Economic Affaiis, anu the Ninistiy of Iiiigation anu Public Woiks.
Continueu investment anu numeious goveinment piogiams uemonstiate Inuonesia's commitment
to agiicultuie anu, moie specifically, to iice anu its piice stabilization. Foi instance, because of
Inuonesia's vulneiability to natuial uisasteis, the Inuonesian goveinment has set a manuate to keep
six months woith of iice, a quantity sufficient to feeu the nation, in stoiage. Sixteen hunuieu stoiage
facilities aie uispeiseu thioughout the nation foi this puipose. When the uemanu foi iice exceeus
that season's haivest, anu necessitates the use of stoieu iice, the piice of iice goes up. This is when
the Inuonesian goveinment impoits iice to stabilize piices. The amount of iice impoiteu is caiefully
planneu uuiing the non-haivest season of iice. A iice impoit ban was put into place in 2uu7 anu
extenueu until the enu of 2u1u (uIEWS 2u1u). Inuonesia was self sufficient in iice uuiing these
yeais. Bowevei, uuiing that time, as a iesult of a goou bumpei ciop, a iice &?,-$) ban was also
enfoiceu in 2uu8. Such bans aie implementeu in oiuei to piotect uomestic piouuceis.
The extensive policies monitoiing the piice anu availability of iice only apply to commonly
consumeu white iice. Plain white iice is the staple foou that the goveinment is keen to iegulate.
Neithei B0L0u noi the Ninistiy of Agiicultuie is inteiesteu in becoming involveu with the oiganic
agiicultuie sectoi in geneial let alone the still miniscule sectoi of oiganic iice. Bi. Nohammau
Ismet, a senioi auvisoi at B0L0u, ievealeu that because oiganics account foi less than one peicent
of the agiicultuial sectoi, the Inuonesian goveinment is content to "leave oiganics anu oiganic iice
to the piivate sectoi" (B0L0u 2u11). Neanwhile, the Ninistiy uoes iecognize seven ceitification
bouies, six in }ava anu one in Sumatia. Nany faimeis have long been ue facto oiganic because
chemical feitilizeis anu pesticiues weie not available to them.
The goveinment's keenness to iegulate anu manage the iice sectoi has not been left without
any contioveisy. B0L0u has twice been accuseu of mismanagement of funus. Both scanuals
ieceiveu wiue meuia coveiage anu have aggiavateu the suspicions of the geneial public. In 2uuu,
B0L0u ueputy chief Sapuan was accuseu of (anu latei jaileu foi) oiueiing the uisbuisement of Rp
SS billion in B0L0u funus, which hau been eaimaikeu foi public aiu. Although the laige poition of
the funu was ietuineu, confusion anu uistiust towaiu the B0L0u have ueeply iemaineu anu the
mysteiy iemains unsolveu. Noie iecently, in 2uu2, 4u billion iupiah went missing fiom B0L0u's
RASKIN piogiam. Again, while piosecutions moveu foiwaiu, much of the money was ietuineu.
Neveitheless, both scanuals have bauly affecteu B0L0u's ieputation.
! #$!%& '()*(+, -+./ #0123

S
!;$>'>?&$*. 2%-,$@ >; 5%"&; A&%B*$#
Between 199u anu 2uuu the majoi cities in Inuonesia giew significantly. Bekasi, locateu
aujacent to }akaita, leu this tienu with an aveiage annual population giowth iate of S.19%,
incieasing its population by Su% ovei ten yeais (Fiiman 2uu7). }akaita, alieauy the laigest city in
Inuonesia, auueu moie than one million people ovei the couise of a uecaue. In 2uu9 }akaita was
home to 9.S million people, but an estimateu 26 million live in the metio aiea anu its suiiounuing
cities. }akaita anu many othei Inuonesian cities suffei fiom a lack of municipal infiastiuctuie, pooi
sewei systems, congesteu ioaus, anu a shoitage of mass tiansit.

This uibanization is likely to continue, with the giowth concentiateu in the peiipheiy of
laige cities anu in smallei cities on outlying islanus. These population shifts aie piojecteu to
accompany an inciease in the non-agiicultuial sectois as iuial populations seek employment in
cities. 0iban populations tenu to consume moie than iuial ones, anu this tienu will see
commensuiate incieases in piivate uomestic consumption. (Fiiman 2uu7)

8675:C3D 4E93E89F( 432!681 :91C43 86 867469:8!
The oiganic sectoi in Inuonesia has been seeing giowth in uemanu. With oiganic legumes
sales leauing the sectoi, uemanu foi oiganic iice has been incieasing as moie high-income
Inuonesians aie becoming health-conscious anu minuful of inteinational tienus, especially in the 0S
anu Austialia.
4%G&;>' 1*%$>H>'&$>-;
0iganic ceitifieis assess the piocesses anu inputs that occui uuiing piouuction fiom
planting to haivest. Each countiy iequiies its own ceitification stanuaius. To enable Bloom Agio to
expoit iice to uiffeient countiies, Emily neeueu to ceitify the Simpatik coopeiative unuei a numbei
of uiffeient inteinational oiganic stanuaius. The Simpatik faimeis went thiough a lengthy piocess
to ieceive euucation about oiganic stanuaius, mouify faiming to catei to the stanuaius, anu
complete a laige amount of papeiwoik.
Within Inuonesia theie aie seven bouies that pioviue oiganic ceitification baseu on local
oiganic stanuaius. To be ceitifieu as locally oiganic, agiibusinesses can go to any ceitification bouy
to iequest a ceitification test. 0ne of the ceitification bouies is BioCeit, which is also the only
Inuonesian bouy to ceitify both locally anu foi expoits to othei Asian countiies. BioCeit was
establisheu in Bogoi in 2uu2 as an association to pioviue technical assistance anu ceitification foi
small faimei gioups. In 2uu6, BioCeit joineu the Inuonesia 0iganic Alliance anu has been pioviuing
oiganic ceitification since then. Foi a piouucei to iequest oiganic ceitification fiom BioCeit, it fiist
neeus to be piofitable anu show accounting iecoius. BioCeit conuucts a thoiough annual inspection
of the piouuction piocesses on the faim. In auuition, piouuceis aie iequiieu to pioviue an annual
piouuction plan piioi to the beginning of eveiy inspection cycle. To suppoit its inspection activities,
! #$!%& '()*(+, -+./ #0123

6
BioCeit conuucts ianuom checks on finisheu goous in the maiket anu unannounceu inspections of
faims.
The cost of ceitification uiffeis among ceitification bouies. In 2u1u, BioCeit chaigeu Rp
1,Suu,uuu pei uay ($149) of inspection foi small piouuceis anu Rp 1,6uu,uuu pei uay ($184) foi
laige piouuceis. The numbei of uays iequiieu foi the inspection piocess uepenus heavily on the
aiea of aiable lanu anu numbei of faimeis. Foi a 2S ha faim with 1uu faimeis, it takes
appioximately seven uays foi BioCeit to complete the ceitification piocess.
As one of the fiist inteinational agencies foi inspection, ceitification, anu quality assuiance
of eco-fiienuly piouucts, the Institute foi Naiketecology (IN0) offeis ceitification foi oiganic
piouuction anu hanuling baseu on the Euiopean 0nion iegulation (EC) N 8S42uu7 anu (EC) N
8892uu8. Theii woiluwiue activities aie accieuiteu by the Swiss Accieuitation Seivice (SAS)
accoiuing to EN 4Su11 (IS0 6S), which is the inteinational stanuaiu foi ceitification. IN0 have also
been accieuiteu by the 0niteu States Bepaitment of Agiicultuie (0SBA) accoiuing to the Ameiican
National 0iganic Piogiam (N0P), anu offei ceitification baseu on the }apanese Agiicultuial
Stanuaiu (}AS) foi the }apanese consumei maiket. To expoit into the vaiious inteinational maikets,
foou piouucts woulu be iequiieu to unueigo stiingent checks so as fulfill the iespective
ceitification stanuaius.
3*$&>I 9;=>%-;<*;$
@-+'6%,)*-+ A$&+.'
In 2uu7, pei capita expenuituie on foou in Inuonesia was $Su7.S7 pei yeai. (Euiomonitoi
Inteinational 2uu7) The Inuonesian uiet ievolves aiounu iice anu most Inuonesians eat iice thiee
times a uay. Bue to its geogiaphy, theie is abunuant supply of fish in Inuonesia, making fish anu
othei seafoou ielatively affoiuable souices of piotein. Chicken anu goat aie othei populai pioteins,
but uue to the pievalence of Islam, poik is unpopulai outsiue of Bali, a piimaiily Binuu islanu. Neat
anu uaiiy piouucts aie less populai, although expenuituie on meat anu uaiiy piouucts has
incieaseu significantly ovei the last uecaue.
Nost Inuonesian families aie laige, anu those in uibanizeu iegions usually employ maius.
The piefeience foi fiesh foous is high, anu most consumeis puichase fiesh gioceiies iegulaily at
the wet maikets. Bowevei, with the intiouuction of oiganizeu ietail anu the giowing piesence of
hypeimaikets anu convenience stoies, an incieasing numbei of consumeis have begun to uo theii
shopping on a weekly basis, buying moie piocesseu foou anu packageu piouucts to eat in the uays
anu weeks aheau.
B&)#*2 C<&$<*&3
The maiket foi oiganic iice in Inuonesia iemains small but is steauily giowing. 0iganics
geneially commanu a Su to 4u% piemium ovei conventional piouucts, putting them out of ieach of
most Inuonesians.
! #$!%& '()*(+, -+./ #0123

7
The oiganic ietail sectoi in Inuonesia is concentiateu in }akaita, with smallei maikets in
Suiabaya anu on Bali. The Ninistiy of Agiicultuie estimates that up to 1S million people may be
willing to pay a piemium foi oiganic piouuce (Business Nonitoi Inteinational 2uu7). This numbei
may be oveily optimistic, though, as theie aie only 2u specialty stoies selling oiganics in }akaita,
anu the population of the }akaita Netio Aiea is appioximately 26 million people. 0f the stoies in
}akaita that iegulaily stock oiganic piouucts, five chains commanu most of the maiket shaie:
Bealthy Choice, Foou Ball, Ranch Naiket, Kem Chicks, anu Sogo Naiket. Bowevei, Bealthy Choice
iecently announceu that it woulu be closing opeiations. All ietaileis pieuict significant giowth, with
some estimates as high as Suu% ovei the next five yeais.

D*')-$7 -4 C$(#+*> B&)#*2 *+ E+.-+&'*#
Accoiuing to Riani Susanto, a pioneei in the oiganic inuustiy anu founuei of Bealthy Choice,
Apple Ciuei vinegai was the fiist oiganic piouuct solu in Inuonesia in 1999. In that yeai Riani
began impoiting oiganics fiom Austialia, the 0.S., anu othei countiies with moie matuie oiganic
maikets. In auuition to selling piouucts, Riani has also been a souice of knowleuge foi consumeis
on the holistic lifestyle anu iaiseu awaieness in hei stoies anu in the meuia about health anu
homeopathic issues. Foi this ieason, Riani has been an auvocate anu mentoi foi Emily as she
navigates the inuustiy. Riani anu ietaileis like hei weie the oiiginal moveis anu shakeis in the
inuustiy. 0f the ietaileis that have enteieu the space since 1999, about half aie similaily inteiesteu
in the holistic aspects of oiganic foou, while otheis aie puiely attiacteu by maiket's giowth
potential anu the high piice piemiums.

0J44A !234
9<>I+ :K$&;$-( 9;$%*?%*;*K%L !%$>#$*L &;. 2&<* 1@&;G*%
Emily giew up in a Chinese-Inuonesian family in }akaita. Bei fathei, a successful
businessman in the constiuction anu coal inuustiies, is a public figuie, a iole iaie foi a Chinese-
Inuonesian in mouein Inuonesian politics. Be is veiy active in iepiesenting Inuonesia in the
Association of Southeast Asian Nations (ASEAN).
As is the custom with many wealthy Inuonesian families, Emily was sent foi euucation in
neighboiing Singapoie. She then continueu hei highei euucation in Austialia anu the 0niteu States,
anu moveu to Singapoie to puisue hei caieei in enteitainment. 0pon ietuining to Inuonesia she
founu it haiu to fit in, anu labeleu heiself a "suffeiei of Thiiu Cultuie Kiu synuiome." The cultuie
anu noims in the conseivative Inuonesian society seemeu at ouus with the fiee spiiit she hau
become. In 2uu8 Emily founu hei calling when she stumbleu upon the stoiy of the Simpatik
coopeiative in cential }ava thiough a family fiienu ovei uinnei one night. Although the coopeiative
alieauy existeu, she aiiangeu theii tiaining anu ceitification in oiganic faiming anu impioveu the
coopeiative's inteinal goveinance. Capitalizing on hei family netwoik anu channeling hei
enthusiasm into the oiganic iice business, Emily convinceu the Ninistiy of Agiicultuie, Ninistiy of
! #$!%& '()*(+, -+./ #0123

8
Tiaue, Ninistiy of Finance, anu B0L0u to change the iegulations anu allow specialty iice - the type
of iice the coopeiative giows - to be expoiteu.
Emily launcheu Bloom Agio in 2uu8 with thiee goals: piomote sustainable agiicultuial
piactice, impiove faimei livelihoou anu income, anu fill the giowing niche maiket foi oiganic iice
in Inuonesia anu abioau.
As of the close of 2u1u, Bloom Agio hau expoiteu iice to the 0niteu States, ueimany,
Lebanon, Nauiitius, Singapoie, Nalaysia anu Bubai. In 2u1u, Bloom Agio expoiteu 7u metiic tons of
oiganic iice, anu by Febiuaiy 2u11 confiimeu oiueis hau jumpeu to 2uu metiic tons. The 0niteu
States, ueimany, Singapoie anu Nalaysia iemain the main uestination of expoits, anu in these
maikets Bloom Agio iice is solu unuei the impoiteis' bianus. In Lebanon, Nauiitius anu potentially
Canaua, Bloom Agio is expoiting unuei its own bianu name, SunQuatoi. Bloom Agio specializes in
inuigenous Inuonesian iice vaiietals, such as Reu Rice, Injin Black Rice, Sintanui Rice, anu Cheiang
Rice.
2


2
See Appenuix, Exhibit 8 foi types of piouucts expoiteu.
The System of Rice Intensification
In addition to being an organic and fair-trade product, Bloom Agros rice is produced through an innovative production method
that could be the standard for rice production across the world in near future.
The Simpatik Farmers cooperative grows rice using a method of production known as the System of Rice Intensification (SRI).
This system reduces inputs of fertilizer, seed, and water by up to 50%, while it increases yields by an average of 47% (Uphoff).
Whereas the Green Revolution of the 1970s and Golden Rice changed the inputs that rice farmers used, SRI represents a departure
from these top-down solutions to increasing agricultural production by changing the methods used to plant and grow rice, rather
than relying on new seeds or fertilizers. SRI achieves higher yields than conventional farming by:
Reducing the number of seedlings planted per hole
Spacing seedlings further apart
Planting young seedlings that have more root tendrils than older seedlings
Manually weeding paddies instead of relying on flooded land to control weeds.

The practice emerged in Madagascar in the 1980s through the work of local farmers and a Jesuit priest. Although SRI farming is a
significant change from conventional wisdom on rice farming, Indonesian farmers that adopt SRI eagerly share their techniques
for better yields with their skeptical neighbors. Some cooperatives in the countryside express their zeal by creating SRI
evangelization songs, spreading SRI to the uninformed.
The SRI methodology is not strictly an organic production method. Many farmers across the world who employ SRI methods also
use chemical fertilizer and pesticides to aid their production. However, the value of SRI-organic is that farmers increase their
yields and are also able to capture a higher price for their rice due to the premium associated with organic foods. The portion of
their rice that the Simpatik farmers do not sell to Bloom Agro is sold in the local market, where it is renowned for its high quality
and commands a premium price.
After adopting SRI farming in, the Simpatik cooperative has had an abundant supply of rice. Emily believes that rice supplies will
be sufficient to meet demand as she grows her business. Within the United States, one company, Lotus Foods, is beginning to
market SRI rice with the tag line More crop per drop. Similar to how fair-trade goods promised better labor conditions and more
supplier equity, Lotus Foods hopes to benefit from consumer awareness over global freshwater shortages, loss of biodiversity,
climate change, and genetically modified foods to create demand for SRI rice. As of 2011 their marketing campaign was just
beginning, and no results were available. Similarly, Emily is considering using SRI as a value-added feature of Bloom Agros
rice, both abroad and in the Indonesian market.
(For more information on SRI, see Appendix, Exhibits 3 and 4)
! #$!%& '()*(+, -+./ #0123

9

M%-.K'$>-; E&IK* 1@&>;
Bloom Agio is involveu in eveiy step of the value chain, facilitating tiansactions between
each playei within the chain. The cuiient iole of the company is the uistiibution of oiganic iice
thiough uomestic anu inteinational wholesaleis. Bloom Agio ueiives its value fiom being the
meuiatoi between the oiganic piouuceis anu the maiket.
Figure 1: Organic Supply Chain in Indonesia
F2--% =($-0' G6,,27 @1#*+
Bloom Agio woiks with the Simpatik Faimei's Coopeiative in Tasikmalaya, West }ava.
Simpatik gatheis some 2,Suu faimeis with an aggiegate lanu size of S4u hectaies that aie ceitifieu
oiganic. 0ne of Bloom Agio's fiist tasks in establishing the business was to obtain oiganic
ceitifications foi the faimeis. The piocess was a laige challenge foi Emily because it was expensive
anu uifficult to assemble anu tiain all 2,Suu faimeis unuei one stanuaiu. In auuition, almost all the
faimeis in the coopeiative uiu not ieau oi wiite English, the only language in which papeiwoik was
available. Emily expiesseu hei fiustiation at the piocess, saying, "Some faimeis uiu not even have a
signatuie!" Bloom Agio askeu Butch Nu0 BIv0S in }akaita foi help in oiuei to uevelop the
coopeiative's inteinal goveinance stanuaius, facilitate meetings, anu pioviue basic tiainings within
the coopeiative. 0vei the couise of a yeai, Simpatik ieceiveu the IN0 Faii foi Life ceitification
(Social anu Faii Tiaue), anu 0SBA, }AS, anu the Euiopean Commission oiganic ceitifications.
Auuitionally, the coopeiative's manuate anu inteinal laws weie set, anu tiaining on oiganic faiming
methous commenceu.
The faimeis of Tasikmalaya weie intiouuceu to SRI methous back in the 199us anu weie
among the pioneeis of SRI in Inuonesia. In 2uu7, Emily paiieu up with the faimeis of Tasikmalaya
to help them ieap the benefits of SRI by obtaining a highei piemium on theii piouucts.
Faimei's
Fielu
Simpatik
Faimei's
Coopeiative
Nill anu
Waiehouse
Bistiibutoi's
Waiehouse
( Libia Foou
Seivice)
Retail 0utlet
(Kimchik's,
Ranch
Naiket,
Bealthy
Choice)
Consumei
! #$!%& '()*(+, -+./ #0123

1u
By investing in theii tiaining anu ceitification, Bloom Agio secuieu exclusivity in
uistiibuting the coopeiative's piouucts unuei the oiganic labels.
S
Simpatik Faimeis often sell
excess iice in the local maiket, but aie not peimitteu to use the oiganic ceitification oi labeling.
0nuei the agieement between Bloom Agio anu Simpatik, Bloom Agio puichases the season's
output in fulfillment of inteinational oiueis anu uomestic uemanu. The IN0 Faii foi Life
ceitification manuates that the faimeis ieceive a piemium foi theii iice, which in Inuonesia is well
above the goveinment set piice.
4
Aftei fulfilling expoit oiueis, the faimeis aie at libeity to sell theii
suiplus haivest to the local maiket. Since the faimeis only have access to the oiganic 0SBA anu
IN0 ceitification unuei the Bloom Agio bianu, the faimeis usually sell theii iemaining ciop as
healthy iice, foi which they have become iegionally known.
S

Aftei haivesting, the iice ciop fiom the 2,Suu faimeis is tiansfeiieu to the mill in
Tasikmalaya at the coopeiative's heauquaiteis. The heau of the coopeiative, 0u Saiful Bahii, keeps
tiack of oiueis anu cooiuinates with Bloom Agio's Quality Contiol (QC) man on the giounu. Aftei
milling, packaging anu checking, Bloom Agio's shaie is stoieu at the waiehouse until the oiuei is
fulfilleu. Piesently the waiehouse is small, measuiing 1S meteis by 7 meteis, anu is immeuiately
aujacent to the mill. Thiough Emily's connections anu consistent piessuie on the Bepaitment of
Agiicultuie, she secuieu a giant foi the uevelopment of a new mill, the puichase of new machineiy
foi soiting anu packaging iice, anu the constiuction of a laigei waiehouse. These new capital
auuitions will inciease piouuctivity in the milling anu packaging phases, anu will allow piouuction
to be scaleu up to fulfill moie oiueis.
As cleai fiom the supply chain uiagiam in Figuie 1, Bloom Agio uoes not maintain any
physical iole in the chain. Cuiiently, it owns no waiehouse oi offices. 0pon oiuei fulfillment, the
oiuei is tiansfeiieu to the next link in the chain, with Bloom Agio only cooiuinating the tiansfei.
Foi inteinational oiueis, Bloom Agio secuies lanu tianspoit fiom Simpatik's waiehouse to the Poit
of }akaita, wheie the iice is uiiectly loaueu on the vessel foi shipment to the client. Foi the
uomestic maiket, Bloom Agio cuiiently tianspoits its output uiiectly to the uistiibutoi's
waiehouse. Libia Foou Seivice, a uistiibutoi of fine impoiteu goous, is uistiibuting Bloom Agio's
SunQuatoi bianu in }akaita, anu has plans to uistiibute it in Bali at a latei uate. This is an example
of Emily's ability to leveiage hei netwoik contacts. Libia Foou Seivice only uistiibutes impoiteu
foous, but Emily was able to capitalize on hei stiengths as a saleswoman, the quality of hei piouuct,
anu the Chinese-Inuonesian business community to become Libia's only local suppliei. Libia's enu
customeis aie ietail stoies in }akaita that catei piimaiily to }akaita's elite.



S
In 2u1u, Simpatik faimeis weie the only expoiteis of iice out of Inuonesia since the ban of 2uu7-8 aftei the
woilu foou ciisis.
4
Piices foi 2u11 weie set at aiounu 8Suu Inuonesian Rupiahs. See http:www.bulog.co.iueng
S
Rice faimeis aie tiaveling fiom acioss Inuonesia to leain fiom the Tasikmalaya faimeis about SRI anu
oiganic faiming methous. It shoulu be noteu that SRI is cascauing at a fast iate, mainly uue to the extia
piouuction output anu watei savings it biings.
! #$!%& '()*(+, -+./ #0123

11
F2--% =($- #' # "#>*2*)#)-$
0n the supply siue, Bloom Agio woiks uiiectly with the faimeis. Cuiiently, the company is
the sole uistiibutoi foi the Simpatik Faimeis' Coopeiative. The company plans to expanu its
coopeiation with othei faimeis engageu in SRI oiganic iice faiming in Tasikmalaya anu Bali.
0n the uemanu siue, Bloom Agio woiks closely with one majoi uomestic uistiibutoi, Libia
Foou Seivice, anu vaiious inteinational ones incluuing Lotus Foous in the 0niteu States anu
Countiy Faims in Nalaysia. Emily also has uevelopeu goou ielations with the ietail outlets in
}akaita. Thiough tapping into hei piivate netwoik of fiienus, Emily has also openeu uiiect ietail
oppoitunities with seveial uietitians in }akaita, who piesciibe Bloom Agio's piouucts foi healthy
uiet plans. Figuie 2 highlights Bloom Agio's supply-siue anu uemanu-siue ielationships.

Figure 2: Bloom Agros Supply Chain and Personal Relationship Network


Piesently, not having a waiehouse keeps costs low. Bloom Agio is woiking unuei a system
of }ust in Time (}IT) fulfillment wheie the company saves by not caiiying any inventoiy anu thus
avoius associateu costs with piopeity anu peisonnel. When Emily ieceives an oiuei, she passes it
along to Simpatik. }IT is iaiely useu in the foou inuustiy, uue to the faiming cycle, peiishablility of
foou items, anu the uesiie to avoiu foou shoitages.
Bloom Agio is cuiiently able to manage a }IT stiategy uue to small scale of the supply, anu
the small numbei of oiueis coming in. As the opeiations giow along with uemanu, Bloom Agio will
have to change supply chain stiategies, such as auuing peisonnel, waiehouses, anu caiiying
inventoiy to satisfy highei uemanu. In fact, the CE0 of Libia Foou Seivice believes that the giowth
! #$!%& '()*(+, -+./ #0123

12
of the oiganic iice maiket in Inuonesia is not a uemanu pioblem, but iathei a supply one. If theie is
enough supply, Libia Foou Seivice can ensuie uemanu giowth thiough vaiious maiketing
stiategies, as the company has been a tienusettei in the Inuonesian maiket with its vaiious foieign
bianus.
C&%G*$ A&%B*$ M%-H>I*
H&%-($#,1*>'
In teims of oiganic consumeis, only 1u% of Inuonesians shop in the westein-style gioceiy
stoies that caiiy oiganic piouucts. Bowevei, puichases in these stoies accounteu foi Su% of all
ietail sales in 2uu9 (EI0 2uu8). Wealthy Inuonesians anu expatiiates aie the main customeis in
these specialty foou stoies. Retail owneis estimate that the majoiity of theii customeis eain at least
SN-1uN Rupiah pei month ($S7S to $1,1Su).
6
Nost consumeis aie families with chiluien who
spenu an aveiage of $Suu to $Suu pei month on foou expenses. 0iganics caiiy with them a stiong
connotation of wealth, class, anu euucation. Neaily all oiganic packaging is in English, which
suggests that taiget consumeis have a stiong enough commanu of English to use the language when
making puichasing uecisions. Auuitionally, many stoies aie locateu in laige malls that house
upscale stoies anu iestauiants, making it possible to buy oiganic gioceiies in the same shopping
tiip as othei items. When families senu theii maius to buy oiganic piouucts, they give them
shopping lists with specific piouucts.
Some stoies, such as Kem Chicks, focus on specialty anu impoiteu foous in geneial, while
otheis such as Bealthy Choice caiiy mostly oiganic piouucts. Within the spectium of oiganic
piouucts, appioximately 8u% of piouuce comes fiom within Inuonesia anu the iest fiom abioau,
while the piopoitions aie ieveiseu foi packageu oiganic piouucts. Auuitionally, the uemanu is
highei foi oiganic piouuce than foi uiy goous. Retail owneis speculate that this is because
consumeis peiceive the piesence of chemicals anu pesticiues in theii vegetables as moie uangeious
than those in ceieals.
Two sectois of the customei base ueseive special attention. With iespect to theii size of the
national population, Chinese-Inuonesians anu expatiiates aie uispiopoitionately laige poitions of
the oiganic consumei base. Chinese-Inuonesian consumeis uemonstiate a highei than aveiage
concein foi health anu homeopathic lifestyles, wheieas expatiiates aie moie accustomeu to oiganic
ceitifications fiom theii home countiies anu the value pioposition of oiganics. Auuitionally,
Westein expatiiates shop at specialty stoies wheie they can finu impoiteu piouucts anu packageu
foous, anu many of these outlets also now caiiy oiganic goous. Nany wealthy Inuonesians who
have spent time abioau aie moie awaie of the oiganic movement anu believe in its benefits.
I6$>1#'*+( F&1#<*-$'
Rice is inuispensable on the table in Inuonesia. Inuonesians expect to eat iice at each meal
anu can unueistanu the uiffeiences that giain size anu textuie impait on iice when cookeu. This

6
0ne ietailei iepoiteu theii aveiage consumei income at SuN Rpmonth
! #$!%& '()*(+, -+./ #0123

1S
consumeis' connoisseuiship iepiesents a challenge foi many oiganic piouuceis, who must
vacuum-pack anu seal theii iice to pievent pests fiom nesting insiue of packaging.
7

Auuitionally, customeis geneially buy oiganic iice in smallei packages than conventional
iice, on the oiuei of 1kg foi oiganic veisus Skg oi moie foi conventional. The uiffeience in
quantities puichaseu is in pait uue to the uiffeiences in the iice vaiieties. Nany of the oiganic iice
bianus on shelves aie specialty iice vaiieties, such as ieu iice, biown iice, oi black iice. These
vaiieties tenu to have bettei nutiitional content than plain white iice, which is a key value uiivei
foi oiganic consumeis. Bowevei, consumeis inuicate that these types of iice taste uiffeient than
plain white iice, anu theiefoie they uo not view specialty iice as a staple foou in the same way that
they view white iice. Foi this ieason, most families tenu to consume specialty, oiganic iice at a
slowei iate than plain iice.
I$&4&$&+>&'
Initially, customeis iecoveiing fiom illnesses anu those with uoctoi-iecommenueu uiets
fueleu the uemanu foi oiganic piouucts in Inuonesia. The maiket foi oiganics has since expanueu
anu meuically focuseu customeis have become a smallei poition of the customei base. At most,
they aie half of the customei base in Bealthy Choice, anu a much smallei peicentage in othei stoies.
Both customeis anu ietaileis asseit that the piimaiy value uiiveis foi oiganic customeis
aie the nutiitional benefits of oiganic iice, the health benefits of chemical anu pesticiue-fiee foou,
anu the impioveu taste ovei conventional iice. Auuitionally, the oiganic anu natuial lifestyle is
becoming tienuiei among wealthy Inuonesians. It is ieceiving moie attention in the piess as
westein health anu nutiition conceins spieau to Asia.
Bespite the uemanu foi the benefits of oiganics, consumeis aie not necessaiily conceineu
with oiganic ceitification stanuaius. Retail stoies use ceitifications as a way to souice oiganic
piouucts, but customeis uo not consiuei ceitifications as an impoitant factoi in making puichasing
uecisions anu uo not seek out ceitifications in stoies. Bowevei, they uo look foi some inuication
that a piouuct is oiganic, such as a label on the package that says "0iganic," oi "1uu% 0iganic," oi
the iesults of a chemical anu pesticiue iesiuue test. Some of these lab tests aie conuucteu by
fictional entities. Auuitionally, the Inuonesian goveinment uoes little to enfoice ceitification
stanuaius. Foi example, one of the most populai oiganic iice bianus featuies the 0SBA logo on its
packaging, howevei the fine piint ieveals that it is the plastic packaging that is appioveu by the
0SBA, not the "oiganic" iice insiue.
Effoits to euucate consumeis about the value of ceitifications have not been successful.
Although one oiganic ietailei cieateu a chait explaining the uiffeient ceitifications, customeis
founu the infoimation confusing, saiu that they all lookeu the same, anu came to flooi staff anu
management foi auvice on which piouuct to buy.

7
Nost conventional iice is fumigateu to mitigate pest pioblems, howevei fumigating oiganic iice woulu
nullify the ceitification, so most oiganic iice is solu in vacuum packeu packaging wheie piouuceu in tiopical
climates.
! #$!%& '()*(+, -+./ #0123

14
This ieliance on flooi staff foi auvice is an impoitant inuicatoi of the penchant foi
consumeis to tuin to ietaileis foi help when selecting bianus. Customeis believe the infoimation
they heai fiom specialty gioceiy stoies, anu if the stoie suggests that it is healthy anu woith the
money, they aie moie inclineu to pay the piemium. They uepenu heavily on stoies anu flooi staff to
pioviue piouuct infoimation anu navigate the lanuscape of competing piouucts. Customeis tiust
that ietaileis have uone an appiopiiate job of scieening piouucts, so that a piouuct that appeais on
the shelf must be healthy, nutiitious, anu ieputably oiganic.
Although customei euucation about ceitifications has been unsuccessful, some ietail outlets
have hau luck with euucating them on othei topics. Ranch Naiket staiteu a campaign to explain
why piices foi oiganics weie highei than those of conventional foous, anu consumeis took to the
infoimation well. Similaily, customeis iesponueu well to in-stoie cooking uemonstiations of iice
anu othei oiganic piouucts.
When consumeis ueciue between oiganic bianus, the thiee most impoitant factois aie:
piice, taste, anu nutiitional content. Cuiiously, although customeis cite nutiition as a ieason foi
puichasing oiganics, most aumit to not checking nutiition infoimation on the package.
In contiast to theii counteipaits in the 0niteu States, oiganic consumeis in Inuonesia uo
not show any piefeiences foi enviionmental conceins, faimei equity, watei savings, biouiveisity,
oi climate change. Some consumeis showeu appiehension ovei uenetically Nouifieu foous. 0ne of
the value uiiveis of SRI in the Ameiican maiketplace is its enviionmental benefits anu
sustainability. Bowevei, Inuonesian consumeis seemeu to show a lack of piefeience foi piouucts
that aie saiu to be moie sustainable. 0n the othei hanu, expatiiate consumeis uo value these things
anu aie moie familiai with enviionmental conceins anu the concept of faii tiaue goous. As a
possible ieason, the heau of one oiganic ietail chain saiu, "We have so much lanu in Inuonesia, it's
not like in Euiope." A consumei commenteu, "We have so much watei on }ava, too much watei -
we'ie not veiy conceineu with iice that uses less watei." Similaily, most Inuonesian consumeis aie
not conceineu with iecyclable packaging oi with ieuucing waste.
A&%B*$>;G
Ranch Naiket, Kem Chicks, Sogo Foou Ball anu Bealthy Choice - the leauing specialty foou
stoies in }akaita - have a total of about 2u stoies. Cuiiently, Bloom Agio's piouucts aie in Kem
Chicks anu Sogo Foou Ball. Bowevei, one of Emily's conceins was that the SunQuatoi iice was not
easily viewable by the consumei. In its cuiient packaging, the iice itself was only visible if a
consumei pickeu up the package anu tuineu it on its siue. Kem Chick's best-selling iice is solu in a
bag with a cleai winuow in fiont allowing the consumei to see the piouuct without iemoving the
package fiom the shelf.
8

Emily feels stiongly that Bloom Agio's inteinational ceitifications shoulu make its piouucts
the most uesiiable among oiganic iice consumeis. Bowevei, all outlets ievealeu that consumeis aie
unawaie of ceitification bouies anu have nevei askeu foi specific ceitifications on theii piouucts.

8
See exhibit Appendix, Exhibit 5
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1S
Consumeis iepeateu that they piimaiily puichase oiganic piouucts foi chiluien anu the elueily, as
well as foi those iecoveiing fiom illnesses.
Buiing one meeting with a Canauian uistiibutoi who Emily hopeu woulu uistiibute hei
piouuct, an inteiesting scenaiio playeu out. The uistiibutoi, a twenty-yeai veteian of the Canauian
oiganic inuustiy, expiesseu ieseivations ovei Bloom Agio's packaging. Be iecognizeu that the iice
was not visible but also that the excess packaging, an elaboiate, hanumaue bag, woulu be vieweu as
excessive by his consumeis. Emily took offense to his iecommenuations anu latei expiesseu a
highei inteiest in only selling the uistiibutoi hei iice if he also took hei SunQuatoi bianu. These
scenaiios uemonstiateu that Emily uiu not have a complete unueistanuing of consumei
piefeiences.
In iesponse to consumeis' pooi ieactions towaiu Bloom Agio's piouucts, Emily planneu to
conuuct iice tastings anu taste compaiisons in the stoies wheie SunQuatoi iice is solu. In }anuaiy,
Emily helu a uiscussion with a }akaita-baseu cateiei about the possibility of supplying iice to the
cateiei as pait of theii nutiition meal package. The cateiei's main clientele incluue expatiiates,
celebiities, anu membeis of }akaita's wealthy uemogiaphic. Biawn into the health benefits of
Bloom Agio's iice anu the compatibility of the iice with the cateiing company's nutiition anu health
meal packages, the cateiei ueciueu to puichase oiganic iice fiom Emily.
In Inuonesia, theie aie ovei thiity bianus of oiganic anu specialty iice. The most
competitive type of iice in both the oiganic anu specialty sectois is ieu iice, with the most populai
bianu selling at 2S,uuuRpkg ($2.6S). The seconu most populai bianu of oiganic iice sells foi
29,9uuRpkg ($S.SS). The Bloom Agio iice sells between 28,Suu Rp anu S2,Suu Rp kg ($S.28 anu
$S.7S). The majoiity of competitoi's oiganic ceitifications aie uubious, but nonetheless they use
them as a ciitical component in theii maiketing anu bianuing stiategies. Nost competitois'
packaging featuies a cleai plastic winuow that allows customeis to see the iice easily.

0I--< !G%-( 4?*%&$>-;&I 1@&II*;G*#
Bloom Agio is still in its infancy. Since 2uu8, the company has not changeu stiuctuially,
basically consisting of Emily heiself. As she has successfully manageu a }ust in Time system in hei
logistics, thus avoiuing any investment in infiastiuctuie, so has she manageu the opeiations of hei
company to incui as few costs as possible. Foi example, Emily has maue use of the family's
housekeepei foi papeiwoik anu simple accounting, anu has iecently hiieu a local man in
Tasikmalaya foi quality contiol.
9





9
The iole of this peison is closei to geneial fixei than the aveiage Quality Contiol peison. Inuonesia is
famous foi the fixeis, which help get things uone easiei anu fastei.
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16
Figure 3: Emilys Activity as a share of time (in percent)












The scope of woik that Emily peifoims is oveiwhelming. Nost of Emily's time is spent on
geneial management, incluuing netwoiking anu goveinment lobbying. Bei lobbying has yielueu
goveinment suppoit foi SRI, fiom the Piesiuent's speech suppoiting SRI to the small giants foi a
new mill anu vacuum packaging machine foi Simpatik. Naintaining hei wiue netwoik of business
owneis, goveinment officials, jouinalists, expats, anu membeis of the Chinese-Inuonesian
community is exhausting.
Logistics anu supply chain management is seconu on Emily's piioiities anu occupies 2u
peicent of hei time. Pushing the expoit foims, ceitification uocuments, anu lab iepoits thiough the
necessaiy goveinment ministiies is a piocess that still has not been systemizeu oi automateu. The
stiess of managing the }ust in Time supply chain is eating up time anu eneigy.
Naiketing anu Sales come next in piioiity. In teims of maiketing, Emily uiiects the upuates
to hei website, the uevelopment of new packages foi SunQuatoi by the aitisan faimeis in
Tasikmalaya, anu the upcoming consumei euucation anu tasting sessions to be conuucteu at the
ietail outlets of Kem Chicks anu Ranch Naiket. Though the local uistiibutoi, Libia Foou Seivices,
fulfills uomestic oiueis, Emily still has to establish ielationships with buyeis, follow up with Libia
on sales anu oiueis, anu fulfill hei inteinational oiueis anu sales tiansactions peisonally.
Since the faimeis became oiganizeu unuei Simpatik anu theii tiaining by BIv0S, Emily has
been spenuing less anu less time managing laboi ielations. She still cooiuinates with BIv0S on
auuitional tiaining anu with BioCeit foi the annual oiganic anu faii tiaue inspections at the faims
Su%
- Netwoik Naintenance
2u%
- Logistics
12%
- Naiketing
8%
- Sales
7%
- Buman Resouice Nanagement
S%
- Finance anu Accounting
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17
anu mill. Emily also has to manage piice negotiations with faimeis, as global anu uomestic piices
change. The new piice ceiling set by B0L0u foi 2u11 has iisen, anu Tasikmalaya iice piices have
maintaineu theii piemium ovei commouity iice uue to the iegion's ieputation foi giowing quality
iice. This maiket piice inciease has tiiggeieu new piice negotiations foi Bloom Agio. Tension
management between Emily anu the coopeiative is anothei challenge that is being auueu to Emily's
plate of activities.

1461J5:846( 0J44A !234 A4E862 N43F!37

In 2u1u expoits accounteu foi 9u% of sales, anu Emily expoiteu foui containeis.
16
Noving
foiwaiu Emily hopes to expoit one containei pei week, anu wants to change hei sales mix to 7u%
expoit anu Su% uomestic. Between hei cuiient state anu hei uesiieu state lie many challenges.
Emily is conceineu about the futuie iole of the goveinment in iice policy anu woiiies that expoit
peimission may be ievokeu if a new ciisis comes along. She is conceineu that customeis may not
value hei iice as much as othei uubiously ceitifieu bianus. She feais that she will not have the
capacity to fulfill moie oiueis, but is also conceineu that new staff she may biing on will not be able
to navigate the peisonal ielationships that she has uevelopeu. Above all, she is not suie how to sell
moie iice in ietail enviionments wheie she cannot peisonally inteiact with each buyei.












16
0ne shipping containei holus 18 tons of packageu iice. It is possible to ship less than a containei, but
shipping costs aie optimizeu when shipping a full containei.
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18
!MM9678O
9P@>">$ Q( A&? -H 8;.-;*#>&
Source: http://www.travelblog.org/Maps/map-of-indonesia-id.gif

Exhibit 2: Private Consumption Trends

Source: EIU Country Report, November 2010
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19

9P@>">$ R( :38 S>#$-%+
These piactices emeigeu out of Nauagascai in the 198us. In 1961 A }esuit piiest, Fi. Benii
ue Laulani, S. }., aiiiveu in Nauagascai anu was conceineu with how the local population coulu
boost its iice piouuction without uepenuing on exteinal inputs such as seeu oi feitilizei. In auuition
to his concein ovei the poveity facing Nalagasy faimeis, many faimeis weie conveiting moie anu
moie iainfoiest lanu into iice piouuction uue to theii low yielus. 0vei twenty yeais, Fi. Benii anu
the local faimeis hau conuucteu seiies of simple expeiiments to assess how watei levels, spacing of
plants, weeuing, anu age of plantings woulu affect yielus. The cential tenets of SRI emeigeu fiom
the iesults of theii expeiiments. Piesently, faimeis on six continents have been using SRI methous
to piouuce moie iice on the same amount of lanu with fewei inputs.
Source: The Origins of the System of Rice Intensification. http://sri.ciifad.cornell.edu/aboutsri/origin/index.html

9P@>">$ T( :38 A*$@-.-I-G+
A piominent SRI specialist at the Coinell Institute foi Inteinational Foou, Agiicultuie, anu
Bevelopment states:
"The methous iaise, concuiiently, the piouuctivity of lanu, laboi, capital anu watei, without
tiaueoffs, something nevei seen befoie. SRI piactices achieve uiffeient anu moie piouuctive
phenotypes fiom any genotype of iice by pioviuing a bettei giowing enviionment in which
the plant can expiess its genetic potential. SRI is best unueistoou as pait of a giowing
movement in the agiicultuial sectoi towaiu what can be chaiacteiizeu as agioecological
innovation. This stiategy seeks to capitalize on syneigies among species anu oiganisms
when these aie pioviueu with optimum giowing conuitions. Conventional agiicultuial
piactices, favoiing monocultuie, seek to maximize piouuction of single species, one at a
time, taking them out of the context of theii natuial enviionments, changing that
enviionment by ploughing, feitilization, iiiigation, etc" (0phoff)

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2u
Source: http://www.Bloom Agro.com/SRI.html





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21
Exhibit 5: Packaging of Organic Rice Brands

Source: Authors
The seconu fiom the left is the Bloom Agio package cuiiently on sale in Inuonesia. The
fouith fiom left is a new packaging unuei uevelopment. Key uiffeiences fiom the cuiient one aie
the visibility of the iice anu a non-ieusable bag. The package on the fai iight is the Bloom Agio iice
solu in Nalaysia unuei a uiffeient bianu name. The package is a simple caiton package that houses
the vacuumeu iice bag. Note that the iice is also visible neai the bottom, a common featuie in all the
packages of the competitois.









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22
9P@>">$ U( 0I--< !G%- N&>% H-% J>H* M%-H>I*

Fair for Life Certification
Certified Operator
(Certification
Applicant) Simpatik Farmer Cooperative Production Unit
Place Tasikmalaya
Country Indonesia
Contact Bloom Agro.com, emily@Bloom Agro.com
Type of Operation Smallholder Production
Details on Operation Production and processing by the cooperative
Certified Products Rice
Certification
Programme IMO Social & FairTrade Certification

Social Issues (Smallholder Groups)
Chapter Content of the IMO Social & Fair Trade Programme Rating Norm
3.1.1a
Transparent Administration and Relation with Farmers
FARMER GROUPS 19 16
3.1.2 Pricing and Producer Payments 18 14
3.1.3 Non-discrimination and Gender Aspects 11 10
3.1.4 Internal Control System 24 24
3.2.1 Child Labour and Young Workers 21 16
3.2.2 Working Conditions Producer Farms 51 44
3.3.1 Basic Labour Rights Group Staff 33 32
3.3.2 Employment Conditions Group Staff 37 32
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2S

Total Score Social Issues (Smallholder Groups) 214
Minimum Points for Certification Social Issues (Smallholder Groups) 169
Points Reached Last Year (Social Issues, Smallholder Groups): - n/a

Fair Trade Issues
Chapter Content of the IMO Social & FairTrade Programme Rating Norm
4.2.1 Trade Relations 21 20
4.2.2 Additional FairTrade Obligations Producer Groups 31 28
Total Score Fair Trade Issues 52
Minimum Points for Certification Fair Trade Issues 43
Points Reached Last Year (Fair Trade Issues): - n/a

Environmental Issues
Chapter Content of the IMO Environmental Programme Rating Norm
3.4.1 Internal Monitoring Environmental Aspects 4 4
3.4.2 Environmental Performance Producers 27 20
3.4.3 Environmental Performance Processing 25 22
Total Score Environmental Issues 56
Minimum Points for Certification Environmental Issues 32
Points Reached Last Year (Environmental Issues): - n/a

Social Impact
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24
Social Impact &
Special
Achievements
Gapoktan Simpatik Kabupaten Tasikmalaya is a
cooperative of smallholders and medium-sized family
producers. It has agreed with PT. Bloom Agro to develop
its production and processing of rice as a social project for
the community in the project area. Women are supported
by getting the same wages as men. Furthermore, disabled
people are also supported by being offered an opportunity
to work within the operation.

Use of Fair
Trade Premium
No use of the Fair Trade Premium yet since first year of
certification
Date of
Certification 13.07.2009
First 13.07.2009
Last Update

Source:Fair For Life
http://www.fairforlife.net/logicio/pmws/indexDOM.php?client_id=fairforlife&page_id=operators&lang_iso639=en
&company_id=94



















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2S
Exhibit 7: Growth Disparities Across Indonesia

Source: The World Bank, Connecting Indonesia: A Framework for Action. In-house presentation, delivered January 2011













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26
Exhibit 8: Bloom Agro Products
Source: www.bloomagro.com






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27










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29




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Su
References
Buieau of East Asian anu Pacific Affaiis, 2u1u. (2u1u). Backgiounu Note: Inuonesia. Retiieveu
Becembei 7, 2u1u fiom http:www.state.govipaeibgn2748.htm
"CIA Woilu Factbook: Inuonesia." Last mouifieu 7 Becembei, 2u1u.
https:www.cia.govlibiaiypublicationsthe-woilu-factbookgeosiu.html
"Consumei Lifestyles Inuonesia." Euiomonitoi Inteinational. 2uu7.
"Countiy Repoit: Inuonesia." The Economist Intelligence 0nit. Nov 2u1u.

"Countiy Repoit: Inuonesia." The Economist Intelligence 0nit. Nov 2uu8.
Fiiman, Tommy, et al. "The Bynamics of Inuonesia's 0ibanization: 198u-2uu6." 0iban Policy, 2S:4.
2uu7: 4SS-4S4
Istiqomah, Rice Naiket Integiation in Inuonesia: Effects of Tiaue Libeialization
"Inuonesia Consumei uoous anu Retail Repoit." The Economist Intelligence 0nit. 18 Naich, 2u1u.
"Key Sectois: Foou anu Biink. Inuonesia QS 2uu7." Business Nonitoi Inteinational. 2uu7.
"Nain Foou Relateu Policy Neasuies Asia." ulobal Infoimation anu Eaily Waining System
(uIEWS), 0niteu Nations Foou anu Agiicultuie 0iganization. 2u1u.
http:www.fao.oiggiewscountiybiiefpolicy_uetail.jsp.coue=IBN#IBN
Naitawijaya, Suiaui, anu Rogei B. Nontgomeiy. "Buieauciats as Entiepieneuis." F622&)*+ -4
E+.-+&'*#+ J>-+-%*> G)6.*&'9 4u (2uu4): 24S-2S2
NcLeou, Ross. "Suivey of Recent Bevelopments." F622&)*+ -4 E+.-+&'*#+ J>-+-%*> G)6.*&'9 44
(2uu8): 18S-2u8.
"The 0iigins of the System of Rice Intensification."
http:sii.ciifau.coinell.euuaboutsiioiigininuex.html
Simatupang, Pantjai, anu C. Petei Timmei. "Inuonesian Rice Piouuction: Policies anu Realties."
F622&)*+ -4 E+.-+&'*#+ J>-+-%*> G)6.*&'9 44 (2uu8): 6S-79.
0phoff, Noiman. "Responses to Fiequently Askeu Questions About The System of Rice
Intensification (SRI)." The Coinell Institute foi Inteinational Foou, Agiicultuie, anu
Bevelopment. http:sii.ciifau.coinell.euuaboutsiiFAQsFAQs.puf
"The Woilu Foou Piogiam in Inuonesia: An Exit Stiategy." The Woilu Foou Piogiam, Apiil 2uu1.
http:zunia.oigpostthe-woilu-foou-piogiamme-in-inuonesia-an-exit-
stiategy.iank=u&cBash=1uf7cbe29S7a7S8uSSa711aauSau8SSe

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S1
"The Bevelopment of the System of Rice Intensification (SRI) in Nauagascai." The Coinell Institute
foi Inteinational Foou, Agiicultuie, anu Bevelopment.
http:sii.ciifau.coinell.euuaboutsiioiiginCIP_0PWARB_SRICase.puf