Summary Results of the Terminal Evaluation
1. Outline of the ProjectCountry: The Republic ofIndonesia

Project Title: The Public-Private-Partnership Project for the
Improvement of the Agriculture Product Marketing andDistribution System

Issue/Sector: Agricultural
Development, Public Private
Partnership

Cooperation Scheme: Technical Cooperation

Division in Charge: Economic
Development Department

Total Cost (at the time of the Terminal Evaluation): JPY410
million

Period of
Cooperation

Partner Country’s Implementing Organizations: DGH, DINAS

February 2016
-March 2021

Supporting Organizations in Japan: IMG Inc., Task Co., Ltd.
Related Cooperation: None

1-1 Background of the Project
Modern retail and food service industries, such as hypermarkets, convenience stores, restaurants andfast food shops, are expanding rapidly in the urban areas in Indonesia where most of the middle-income
groups reside. The use of modern shops is becoming common mainly among younger generation, thoseunder thirty years old, who comprise more than 50% of the total population and the middle-income
segment.
Another factor that influenced the changes in modern market preference is the increasing of income.
Personal disposable income in Indonesia has been increasing recently in line with the macro-economic
growth. The share of middle and high-income groups (those with annual disposable income perhousehold more than USD 5,000 and less than USD 35,000), who have strong consumption rates,
increased from 5.8% of the population in 1990 to 57.7% in 2010 and is expected to reach 73.5% by2020 . Due to these changes in the income structure and an increasing diversity of food preferences, thefood market (both processed and fresh food) in Indonesia has been expanding rapidly. Suchdiversification includes a tendency to prefer healthy, environmental-friendly, safe and high quality food;an interest in new types of food as seen in a boom in western and Japanese food; and the use of fast foodand processed food that shortens cooking times. The rapid increase in vegetable and fruit imports
indicates the increasing number of consumers seeking high-quality vegetables and fruits. Food
expenditures in Indonesia increased by 48% in the four years from 2005 to 2009. Should this trend
continue, the size of the food market will reach IDR 1,925 trillion by 2020.
However, the modernization of the agriculture distribution system and food market in Indonesia is
not advancing as fast as in other major ASEAN countries. The share of modern retail of total food sales
remains low and traditional retail such as public markets (pasar) and family-owned small shops andvendors still account for the majority of sales. The distribution problem for traditional markets ischaracterized by complexity and high costs, which are mostly attributable to the involvement of many
middlemen. Lack of sanitation is also a problem with traditional wholesale and retail markets. Modern
retailers who intend to continuously procure products of a certain level of quality and safety have toindependently identify trusted business partners. Furthermore, underdeveloped cold chains and transport
infrastructure make quality control of the fresh food difficult. As a result, retailers prefer to import1

high-quality horticultural products from overseas despite the fact that domestic agriculture producers
have the ability to produce such products.
Difficulties in accessing modern markets demotivate farmers from producing safe and high-quality
horticultural products as they are not able to sell their products with the price that compensate for the
extra production costs and labor. In this regards, establishing distribution channels between farmers andmodern markets specifically for safe and high-quality horticultural products will lead to positive
outcomes including the enhancement of farmers’ incomes and motivations, stable supply of safe andhigh-quality horticultural products to the food industry, meeting the needs of high and middle-income
consumers, and resulting in increased direct investments and overall business activities in the sector.
Against this backdrop, in August 2013 the Government of Indonesia requested the Government of Japan
to implement a technical cooperation project to support the establishment of supply chains of safe andhigh-quality horticultural products. Based on the Record of Discussions signed between the Indonesian
Ministry of Agriculture (MOA) and JICA on the 25th of September 2015, JICA contracted theimplementation of the Project to joint venture of IMG Inc. and Task Co., Ltd.
This terminal evaluation was conducted to evaluate and confirm the achievement of project activities,
output, and project purpose based on the Project Design Matrix, as well as to make suggestions towards
the remaining period of the project implementation.
1-2 Outline of the project Super Goal: Modernized production & distribution systems of safe & high-quality agricultural
products that lead to an increase of farmers' incomes are developed for the farmers' groups in WestJava Province.
 Overall Goal: Modernized production & distribution systems of safe & high-quality agricultural
products that lead to an increase of farmers' incomes are developed for the farmers' groups at themodel sites in West Java Province.
 Project Purpose: Modernized production & distribution systems of safe & high-quality agricultural
products that lead to an increase of farmers' incomes are developed for the target farmers' groups at
the model sites in West Java Province.
 Output Output 1-1: Technique to produce and cultivate safe and high-quality agricultural products is
acquired by the target farmers.
 Output 1-2: Capacity to plan and carry out cultivation according to market needs is attained by thetarget farmers.
 Output 1-3: Target farmers' groups' marketing channels are developed.
 Output 1-4: Target farmers' groups' access to finance is improved.
 Output 2: Managerial capacity of government officials who promote modernized production &distribution systems is strengthened.
 Input Japan side: Total cost of input: JPY410 million
Dispatch of experts: 12Budget for operational cost: JPY96.9 million

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
Trainees in Japan: 41 (including 9 representatives of farmer groups)
Provision of equipment
Indonesia sideAssigned counterpart personnel: 59Budget for operational cost in Indonesia: JPY5.6million
Provision of project office

2. Composition of the Terminal Evaluation Team
Members

Evaluation
periodName

Position

Organization

Ms. Keiko MIZOETeam Leader

Director, Agricultural and Rural
Development Group 1, Economic
Development Department, JICA

Dr. Keishiro
ITAGAKI

Food Value Chain

Counsellor, Nippon Foundation

Dr. Akira
KAMIDOHZONO

Commercial
agriculture

Senior Advisor, Economic Development
Department, JICA

Ms. Mihoko
SAITO

Cooperation
Planning 1

Deputy Director, Agricultural and Rural
Development Group 1, Economic
Development Department, JICA

Mr. Atsumu
YAMAGUCHI

Cooperation
Planning 2

Agricultural and Rural Development Group
1, Economic Development Department,
JICA

Ms. Wakako
MATSUURA

Evaluation Analysis

ACCESS Advisory Japan

Mr. Ahmad
Widodo Heru

Division of Planning, Secretariat of
Directorate, General of Horticulture,
Ministry of Agriculture

Ms. Novida Siti
Jubaedah

Division of Planning Secretariat of
Directorate General of Horticulture,
Ministry of Agriculture

August 31, 2020 to September 18, 2020

Evaluation scheme: Terminal evaluation

3. Summary of the Terminal Evaluation Results
3-1 Achievement of the project(1) Summary of Inputs
Japan side
1) Dispatch of Experts
In total, twelve(12) Japanese experts have been dispatched in the following two (2) managerial
positions and ten (10) areas of expertise in the Project.
 Management positions (2): Team leader/ Sub-Team Leader
 Areas of expertise (10): Marketing/Product Development/Faming Technology/Promotion of
Farmers’ Groups/Public Private partnership/Access to Finance/Post-harvest Management/ProductMarketing and Distribution/Capacity Building/Impact Analysis

3Total inputs of the human resources of the experts as of 31 August 2020 amounted to 60.78 man-months(M/M)1 since the beginning of the Project. The list of Japanese experts is as below.
Experts Assigned to the Project (2016, Start-up Phase)
Responsibilities

Name

Team Leader / Marketing / Product Development

MORI Shinichi

Sub-Team Leader / Marketing

NISHIMURA Tsutomu

Farming Technology

MORITA Tateo

Promotion of Farmers' Groups

MATSUMI Yasuko, KAJITA Mio

Promotion of Farmers’ Groups / Public Private Partnership

SHIMIZU Toshihiro

Access to Finance

YONEYAMA Akiko

Post-harvest Management

TANAKA Shunsuke
Experts Assigned to the Project (2017-2020)

Responsibilities

Name

Team Leader / Product Marketing and Distribution /Capacity Building

NISHIMURA Tsutomu

Public Private Partnership

MORI Shinichi

Farming Technology / Post-harvest Management

MORITA Tateo

Farming Technology

YAMAZAKI Masaru

Promotion of Farmers’ Groups / Public Private Partnership

SHIMIZU Toshihiro

Access to Finance

YONEYAMA Akiko

Impact Analysis / Product Marketing and Distribution

SUENAGA Jumpei

ICT

TAKEUCHI Tomonari

E-Commerce

KITANO Masato

2) Training in Japan
Trainings in Japan was held three times in 2016, 2017, and 2018. In total, 32 counterpart (C/P)
personnel and 9 representatives of the target farmer groups were trained for two weeks in Japan on themodernized production, marketing, and distribution of high-quality agriculture products.
3) Equipment
Equipment necessary to enhance the function of the Sub-Terminal of Agribusiness (STA) in the firstyear and to improve the effectiveness of the trial projects were procured for STA and several farmergroups. Major pieces of equipment include fruit and vegetable washer, and brush roller root fruit
washer/peeler. As of the Joint Terminal Evaluation, all equipment is being used.
4) Budget for Operational Cost for the Project Implementation
As of the Joint Terminal Evaluation, about 96.9 million yen has been spent for local cost including
renovation of building and procurement of equipment, recruitment of local staff, and organization of

1 1 M/M is equal to 30 working days of one project personnel.

4seminars. A total of 10 field staff were recruited in the course of the Project implementation, including
one project coordinator, one secretary, two field coordinators, and six field staff.
Indonesia side
1) Assignment of Counterpart Personnel
A total 59 personnel were assigned to the Project including from DG Horticulture, Secretariat of DG
Horticulture, DG Fruits and Floriculture, DG Horticulture Protection, DG Horticulture Seedling, DG
Processing and Marketing of Horticulture Product, DG Vegetables and Medicinal Plants, DINAS ofWest Java Province, Bogor District and City, Sukabumi District and City, Bandung District, West
Bandung District, Cianjur District, and Garut District.
2) Budget for Operational Cost for the Project Implementation
As of the Joint Terminal Evaluation, about 5.6 million yen (787 million IDR) has been spent for local
cost including the expenses for JCC and travel cost for the counterpart personnel to go monitoring or
attend meeting.
(1) Achievement of the output
Output 1-1: Technique to produce and cultivate safe and high-quality agricultural products is acquiredby the target farmers.
For Output 1-1, the Project conducted two rounds of trial projects annually (one in the dry season andthe other in the rainy season), during which time farmers learned and practiced improved cultivation
techniques for the selected commodities introduced by the Project. The Project introduced improved
cultivation techniques for selected fruits and vegetables to participating farmer groups, which
contributed to increase quality and quantity of the target farmer groups yields. Furthermore, with a view
to supporting farmers who intended to cultivate new marketable varieties, and considering modern
markets’ high demand for Japanese vegetables, the Project imported Japanese vegetables’ seeds fromJapan and registered four varieties of Japanese vegetables (mizuna, Momotaro tomato, nasu, and piman)
in Indonesia. The Project also built partnership with a number of private companies, especially Japanesecompanies, including PT. Calbee Wings Food (CWF), UNITIKA LTD., Asahi Biocycle Co., Ltd., PT.
Takiron Indonesia and Shimota Nougei Co., Ltd., introducing new and advanced agricultural techniques
and inputs from Japan. Hence, the Project achieved the target set out for Output 1-1.
Output 1-2. Capacity to plan and carry out cultivation according to market needs is attained by thetarget
The Project introduced the planting calendar to improve the field management of the target farmergroups. The planting calendar indicates the detailed procedures for the cultivation (i.e. seed sowing,
seedling sterilization, land preparation, pesticide application, fungicide application) and the timing foreach process. This practice was new to most of the farmer groups and they introduced the planting
calendar for the first time. The planting calendar contributed to the effective field management by thefarmer groups and contributed to improve quality and quantity of the production.
Although the target stipulated in the indicator was met, there are also some challenges in fully achieving

5the objectives set out in output 1-2. The indicator “1-2-1. planting calendar is recorded by 60% of thetarget farmers who have completed the trial project on cultivation technique” may not necessarilyreflect the level of capacities to plan and carry out cultivation according to market needs, as set out in
Output 1-2. In order for farmers to be able to plan and carry out cultivation according to the market
needs, it is essential for farmers to have capacities to fully understand the market demands and plan theharvest times and the expected production volumes accordingly. Therefore, it is indicated that the
Project partially achieved the target set out for Output 1-2.
Output 1-3. Target farmers' groups' marketing channels are developed
The Project, together with the DGH, held four business forums inviting private companies (supermarket
chains, food service industries, and major exporters and traders, etc.), farmer groups and financial
institutions in order to promote dialogues and exchange of information on market channels. The
activities to connect farmer groups to the market was intensified in the second half of the Project, as the
Project focused on improving agricultural techniques in the first half of the Project.
While the indicators suggest that the market channels have been developed, many farmer groups still
face challenges in creating long-term business relationships with the market. The main reasons for thisare the difficulties in supplying quality vegetables in a steady manner. To address these challenges, it isimportant to further enhance farmer groups capacities in producing vegetables following the market
demand. Marketing skills, including business negotiation and quality control, are also required toestablish long-term business relationships. Hence, it was evaluated that the Project partially achieved
the target set out for Output 1-3.
Output 1-4. Target farmers' groups' access to finance is improved.
To improve farmers’ independence by facilitating the access to finance, the project targeted Kredit
Usaha Rakyat (KUR), a small scale finance scheme provided by the Government, and facilitated thefinancial service providers and farmers groups to access KUR. The Project collaborated with BankBTPN and supported farmer groups to have KUR from BTPN, and a total of 50 farmers received a total
amount of IDR 853 million through two rounds of applications. However, BTPN could not move on to
the third round due to the management decision to stop additional disbursement of KUR as part of its
corporate restructuring process. As the disbursement was limited to 50 farmers only, the Project did notachieve the target set out for Output 1-4.
Output 2. Managerial capacity of government officials who promote modernized production &distribution systems is strengthened.
From 2016 to 2018, the Project implemented three trainings in Japan on modernized production,marketing, and distribution of high-quality agriculture products, including cooperative system of Japan
Agriculture (JA), by inviting Indonesian government officials and representatives of the target farmergroups. A total of 32 government officials and nine representatives of selected farmer groups
participated in the training in Japan for two weeks. Farmers who attended the trainings in Japan werestrongly motivated and became active participants of the Project. They still remain as the Project’s core6

members.
Also, a total of 45 events related to agricultural distribution and marketing have been organized by the
DGH and DINAS during the course of the Project period and 32 projects that can contribute to themodernization of production and distribution systems were proposed or implemented by DGH and
DINAS. It was observed that some participants from the government officials also showed their higher
motivation and stronger engagement in the Project activities after participating in the training in Japan.
While the Project contributed to increase capacities of the government officials, the Joint Terminal
Evaluation Team assessed that Output 2 is partially achieved because managerial capacities inpromoting modernized production and distribution systems require not only capacities to support
farmers with agricultural techniques, but also capacities for disseminating market information or
facilitating linkages between farmer groups and markets. Though officers of DGH, International
Cooperation Bureau, General Secretariat of Ministry of Agriculture, and DINAS attended several key
activities in project implementation, it is difficult to conclude that they have already attained thesecapacities and institutionalized the mechanism to develop their own activities.
(2) Achievement of Project Purpose
Project Purpose: Modernized production & distribution systems of safe & high-quality agricultural
products that lead to an increase of farmers' incomes are developed for the target farmers' groups at themodel sites in West Java Province.
The target indicators of the project purpose in PDM, “Improved production and management techniques
are applied by 70% of the target farmers at their own field(s).” and “Distribution and marketing
channels that allow agricultural products to be sold to modern markets is developed at 70% of the target
farmers' groups.” were sufficiently met. Nonetheless, it is still difficult to say that the project purpose
will be fully achieved by the end of the Project. While a certain level of improvement in production
techniques was observed, the marketing capacities of the target farmers still need to be strengthened torealize stable and continuous business relationships with modern markets and achieve the project
purpose.
3-2 Summary of the Evaluation Results
1) Relevance: High
Indonesia’s Long-Term Development Plan (RPJPN 2005-2025) aims to establish a solid economic
structure in which the agricultural sector will become the base of the economy to produce efficient andmodern products. Based on the Long-Term Development Plan, the National Medium-Term
Development Plans (RPJMN) of 2015-2019 and 2020-2024 were developed as the third and fourth
medium-term plans during the Project period. RPJMN 2015-2019 specifically indicates the importanceof developing agribusiness, strengthening village-level organizations for commodity production, andstrengthening logistics. The Project's basic policies were aligned with RPJMN. Based on RPJMN
2015-2019, the Agriculture Strategic Policy 2015-2019, was formulated by the Ministry of Agriculture,included 5 main target areas:
Maintenance of national food securityIncrease in competitiveness

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


Maintain agro-resources and availability of agriculture facilities and infrastructure
Increase agro-human resources and improve quality/capacity of resource persons
Realize efficient, effective, and primary service-oriented bureaucracy

The Project mainly addressed to increase competitiveness of the farmer groups in target areas byintroducing cultivation techniques and supporting production of quality vegetables. Hence, the Projectis relevant to the priorities set out in the Agriculture Strategic Policy 2015-2019. Also, the current
RPJMN 2020-2024 makes “strengthening of economic resilience for high quality growth” as thenational priority. The Agriculture Strategic Policy 2020-2024 prioritizes “increased availability, accessand quality of food consumption”. The main target areas are as follows:
Improved consumption quality through safety, fortification, and bio-fortification of foodIncreased availability of agro-product foodIncreased productivity and welfare of agricultural human resources
Increased productivity and continuity of agricultural human resources
Improved management of national food system
Furthermore, in Japan's Country Assistance Policy (September 2017), one of the priority areas (medium
goals) is to provide “support for safe and fair society though the balanced development”, which
encourages improvement of quality of life by supporting not only major cities but also ruraldevelopment. As the Project targets the establishment of agriculture product marketing and distribution
systems by linking the farmers in West Java Province to the modern market in Jakarta and other large
cities, it is relevant to the Japan’s Country Assistance Policy.
In terms of the relevance to the needs of the target regions and groups, many farmer groups in the target
region face difficulties in producing agricultural products which meet the increased demands of themarket. The food market, including fresh and processed foods, continues to expand along with the rapid
growth in imports as consumers diversify their diets and change their food preferences due to raisingincome level. Consumers, especially those living in large cities such as Jakarta and Bandung, are moreconcerned about food safety and quality. The Project tried to address this gap by introducing cultivation
techniques and developing marketing channels, which would contribute to the stable supply of safe andquality horticultural products to the growing markets. Thus, the relevance of the project is regarded ashigh.
2) Effectiveness: Relatively high
The Project achieved the targets of output 1-1, 1-2, 1-3 and 2. It was confirmed by the Terminal
Evaluation Team that many farmers expressed their satisfaction on the improvement of production
techniques, which resulted in higher yields and/or improved quality of the commodities. On the other
hand, several points could be improved for the indicators stipulated in the PDM, specifically indicators
for the project purpose, output 1-2, and output 2.
For the project purpose, the Terminal Evaluation Team observed that the logic on how the project
purpose could lead to the overall goal was not clearly defined. The only difference between the project
purpose and the overall goal is the scalability – increasing the number of beneficiary farmers in thetarget areas. The overall goal aims that the achievement of the project purpose goes beyond the “target”

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farmer groups at the model sites, although the scope of the expansion is not clearly defined in theindicators. The achievement of the project purpose is defined by two indicators: “improved production
and management techniques are applied by 70% of the target farmers” and “distribution and marketing
channels that allow agricultural products to be sold to modern market are developed at 70% of thetarget groups”. It is difficult to say that, by achieving only these two indicators, the beneficiaries of the
Project will expand beyond the target farmer groups in the model sites. The same question applies to thelinkage between the overall goal and the super goal. Therefore, effectiveness of the project is regarded
as relatively high.
3) Efficiency: HighThe quality, quantity, and timing of inputs by both Japanese and Indonesian sides were appropriate toaccomplish project activities. In particular, the Project implementation structure, which placed the field
staff in three layers, contributed to high efficiency of project implementation to cover a large project
area with limited resources. In terms of cost, DGH and DINAS allocated separated budget to conduct
additional activities and programs to ensure sustainability of the Project. In this regard, the input fromthe Indonesian side is also considered as appropriate. Also, with regard to the “important assumptions”
for the process connecting project activities to project outputs, emergence of COVID-19 since early2020 was clearly an unexpected challenge. Still, the Project amended the R/D to extend the Project
period and adjusted the activities accordingly, which resulted only in some operational delay but not insignificantly negative impacts. Therefore, efficiency of the Project is regarded as high.
4) Impact: Moderate
Several cases of ripple effects were reported, in which non-target farmers learned from the target farmergroups or DINAS about the cultivation techniques transferred by the Project. With additional
mechanism to disseminate the outputs of the Project, it could be expected that the number of the
impacted farmers will increase. Also, while the outbreak of COVID-19 posed unprecedented challenges
to farmers in Indonesia, some farmers could increase resilience by working with E-commercecompanies, which rapidly expanded under the COVID-19 situation. The improved production capacity
assisted by the Project enabled the target farmer groups to join the E-commerce businesses.
Furthermore, the Project attracted media attention and it was reported in both Indonesian and Japanese
media over the course of the implementation period, which contributed to increasing awareness of thecooperation relationship between Japan and Indonesia. Lastly, no negative impact on gender,
environment, etc. were observed. Hence, impact of the Project is regarded as moderate,5) Sustainability: Moderate
Sustainability of the Project is assessed by perspectives of 1) sustainability at policy level, 2)sustainability at institutional level, 3) sustainability at technical level, 4) financial sustainability.
Overall, sustainability of the Project is moderate because of the following reasons:
Policy Sustainability
Policy sustainability of the Project is high:As described previously, enhancing capacity of farmer groups and improving quality of horticultural
products are in line with the policy priorities of the government of central, provincial, and district level.
Therefore, the sustainability at policy level is regarded as high.

9Institutional Sustainability
Institutional sustainability of the Project is relatively high:
DGH has continuously shown a sense of ownership throughout the project implementation. Also, some
DINAS such as Sukabumi or Bandung actively followed up on the Project, including initiating
programs by allocating budget to provide continued support for farmers. However, not all DINAS has
shown its responsiveness, especially where the original staff was replaced by new staff. With regards tothe farmers’ institutions, including farmer groups, associations, or cooperatives, additional capacity
building is required to ensure project sustainability. It was found that managerial capacities are still
limited in many farmer groups, except for large scale cooperatives. Although it was not directly
addressed in the Project activities, it is ideal for the Project to support institutional capacity building of
the farmer groups.
Technical Sustainability
Technical sustainability of the Project is moderate:
Due to the limited numbers and availability of extension workers, technical transfer to extension
workers was not fully achieved. Some farmers group, especially those with large scale will be able tocontinue the newly learned techniques in a sustainable manner. However, as mentioned above, there is a
gap among the farmer groups. Relatively smaller scale groups may not be able to keep up the
production techniques learned through the Project. To address the gap, it would be important to avoid
possible disengagement of those smaller scale farmers by supporting the institutional capacity of the
farmer groups which enables farmers to support each other within the groups. Also, technicality on
marketing side still needs to be addressed. The target farmer groups still have some areas for
improvement in marketing skills, including market analysis and business negotiations. To ensure theProject technical sustainability on both production and marketing sides, further capacity development of
the target farmer groups is required.
Financial Sustainability
Financial sustainability of the Project is moderate:
In line with the National Medium-Term Development Plan (RPJMN) 2020-2024 which states the supply
chain project as one of its priority, the DGH and DINAS have allocated the budget for continuous
implementation of project and project-related activities. It would contribute to the financial
sustainability of the Project. With regards to financial sustainability among farmers, many farmergroups expressed their intention to continue their newly learned agricultural practices at their own cost
after the Project ends. However, due to capacity differences among farmer groups, some farmers haveenough resources to purchase sufficient inputs but others do not. Establishment of market linkages
based on the financial self-sufficiency is essential for farmers to continue the Project deliverables. To
figure out the actual financial situation, cost-benefit analysis considering all related costs needs to be
done. Also, the challenge of late payment when selling the products to modern markets, which almost
all the target farmer groups mentioned, need to be further addressed. As of the Joint Terminal
Evaluation, the Project could not develop stable and continuous relationship with financial service
providers (FSPs) on this matter.
3-3 Major factors that contributed to achieve the project purpose(1) Factors related to planning10

It was confirmed by the Terminal Evaluation Team that many farmers expressed their satisfaction on the
improvement of production techniques, which resulted in higher yields and/or improved quality of thecommodities. On the increased cultivation techniques (Output 1-1), it was observed that technicalassistance provided by Japanese experts with high agricultural skills contributed to the significant
improvement of the cultivation techniques of target farmer groups. Working closely with the private
sector, especially from Japan, also enabled Indonesian farmers to have access to new and advanced
agricultural inputs.
On farmer groups’ capacity to plan and carry out cultivation according to market needs (Output 1-2), theTerminal Evaluation Team found that the implementation of planting calendars contributed to theimproved the field management of the farmer groups. Further support in using the planting plan by theend of the Project is expected to strengthen the planning capabilities of farmer groups to meet market
demand.
On developing marketing channels (Output 1-3), the Project was effective in connecting farmer groups
to modern markets in Jakarta, especially linking farmer groups with Japanese supermarkets to sell
Japanese vegetables. The Terminal Evaluation Team observed that markets channels were diversified
through the Project, shifting from predominantly traditional markets to modern markets, including
E-commerce. The Project’s support in facilitating business networking, including through businessforums and negotiating several business meetings together with farmer groups, was also found effective
to achieve output 1-3
On enhanced capacities of government officials (Output 2), it was pointed out that training in Japanstrongly encouraged the participants to be proactively involved in the Project activities. The Project’s
support led to the numerous programs initiated by the Indonesian partners in both central and regional
level.
(2) Factors related to implementation
In order to conduct a regular monitoring of the field activities taking place in the large area of the
project sites and respond to issues in an efficient manner, the Project team established theimplementation structured which enabled the close monitoring of the farmer groups. One field staff wasallocated in each District/City to monitor the field activities. Above field staff, two field coordinators
were assigned to provide the technical support and monitor the progress of the activities. They also
share information with DINAS and extension staff, as well as establish connection with local supply
chain actors. To act as an overall project manager, the Project Office was established in Jakarta. The
Project office held weekly meetings with DGH to exchange information and report the Project’s
progress. Trust with the farmer groups built through the close monitoring contributed to theachievement of the project output.
3-4 Major factors that hampered to achieve the project purpose(1) Factors related to planning
As described in the section of effectiveness, several points could be improved for the indicators
stipulated in the PDM, specifically indicators for the project purpose, output 1-2, and output 2. Eachindicator needs to be logically stipulated in PDM.

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In order to achieve overall and super goals, additional mechanism would be required to disseminate theProject activities to other areas. It may include strengthening capacity of government officials
especially at the regional level (DINAS). This point could be included as one of the indicators of the
project purpose. It is expected that the Project’s achievements will spread to other farmer groups tosome extent without additional intervention by the government if the farmer groups could proactively
learn from the “good models” developed by the Project and by entering into supply chains initiated by
the leading/core farmer groups. However, this still requires certain mechanisms, especially at the
district level, to achieve the overall and super goals within its timeframe.
Also, developing and maintaining marketing channels were mentioned as the biggest challenges whichtarget farmer groups face at the time of the Terminal Evaluation. It is thus essential for the Project tocontinue addressing the marketing capacities of the farmer groups, including ensuring stable supply,
quality management, and basic skills such as cost-benefit analysis, market identification, negotiatingskills, and/or paralegal training (basic course on legal documents and procedures and businessnegotiations), to realize the solid and long-term relationship with the target markets.
(2) Factors related to implementation
While the above-mentioned outputs made considerable achievements, the component of financial
access, Output 1-4, was not achieved as only 50 target farmers used financial services facilitated by the
Project, as opposed to the target of 150 members. While the difficulties in achieving the Output 1-4 was
mainly due to the unforeseeable changes in the business operations of BTPN, the following could beconsidered for the future activities to minimize such risks:First, some areas for improvement were observed in the selection process for partner financial service
providers (FSPs). Generally speaking, there are two points to consider when selecting an FSP partner:
1) understanding and commitment by the FSP on the Project goal and purpose, and 2) financial stabilityof the FSP. Regarding the former issue, it is essential to confirm the commitment to the Project with theentire institution, starting with the board of directors. Signing of a Memorandum of Understanding(MoU) between the Project and partner FSP is a common procedure in many projects. The MoU should
be reviewed and approved by the board, and ideally signed by the chairperson, although theCEO/executive director can also sign on behalf of the institution.
Second, the Project could map out all FSPs operating in the target areas, not limiting itself to the FSP
providing KUR, before determining which FSPs are best suited to be the Project’s partners. Then, theselection could be done with a fair comparison using the above-mentioned criteria. For the future
project, the above points should be considered when selecting the financial service providers.
3-5 Conclusion
The Project has contributed significantly to improve the productive capacities of the target farmergroups in the model sites in West Java Province. The Project covered a large area with various farmergroups, diverse in their size, organizational capacities, and agricultural techniques. The Project took a
flexible and efficient approach to address various capacity gaps presented by the farmer groups. During
the six trial projects that were implemented, advanced agricultural techniques were introduced by the12Japanese experts which led to the increased yields and productivity of target farmer groups. Close
monitoring by the Project expert team enabled farmer groups to have frequent consultation with the
Project field staff and Japanese experts on the cultivation techniques, thus reducing the risks of poor
harvest. The trust built between the Project expert team and the farmer groups led to the highacceptance rate for the newly introduced cultivation techniques in their own fields.
During interviews conducted for the Terminal Evaluation, without exception all farmer groups statedthat the Project has helped them to increase their capacities in producing good quality vegetables. Many
farmer groups also found new markets, especially modern markets in Jakarta, and diversified theirmarket channels.
The remaining challenges of the Project include strengthening the marketing capacities of the farmergroups. While many farmer groups acquired skills and confidence in producing high quality fruits andvegetables, many of them still have difficulties in cultivating crops according to the demands from themarket and in supplying to the market in a stable manner. During the terminal evaluation, the need tostrengthen marketing skills, such as cost-benefit analysis, effective planning for cultivation, market
analysis, and business negotiation were confirmed. These needs will be reflected in the designing of the
Project’s Phase 2, which has been requested by the Government of Indonesia and approved by theGovernment of Japan and planned to start in 2021.
To ensure the sustainability of the Project, it is expected that Indonesian partners, including DGH and
DINAS in target sites, take a proactive role in disseminating good practices obtained through the
Project. It is also expected that some leading farmer groups will take active role in disseminating the
agricultural techniques acquired during the Project to other farmer groups, in order to strengthen thehorticultural value chain in West Java Province.
3-6 Recommendations
Based on the findings of the Joint Terminal Evaluation, the Terminal Evaluation Team (hereinafterreferred to as “the Team”) would like to make the following recommendations to be implemented by theend of the Project with a view to ensuring the Project’s sustainability and achieving the overall goal.
(1) Categorize the Project’s target farmer groups by their characteristics and identify patterns and goodpractices
The target farmer groups of the Project were very diverse in their size, markets and productive
capacities. To analyze the activities of the Project, the Team requests the Project experts team tocategorize the Project’s target farmer groups, especially those who participated in the trial projects in
2019-2020, by their size, geographical advantages/disadvantages (i.e. proximity to the market,
topography, altitude), organizational structures (i.e. cooperatives, associations, farmer groups),
cultivation capacities (i.e. appropriate use of agricultural techniques/inputs/skills), total production andsales structures, and target markets (i.e. selling their products to suppliers to supermarkets, foodindustries, traditional markets). This information will be a useful guidance to identify good practices
and lessons learned from the Project.
(2) Support farmer groups in conducting cost-benefit analysis on agricultural inputs

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It is important for farmer groups to acquire skill to conduct accurate cost-benefit analysis in order tomake production and marketing strategies according to the market needs. In this regard, the Teamsuggests the Project expert team to support farmer groups in conducting cost-benefit analysis of eachcrops based on the current level of production. Cost-benefit analysis could be introduced especiallywhen expanding the size of the production beyond the sites of trial projects (100 m2).
(3) Jointly with DINAS, review and propose the indicators for the overall goal and specify the target
farmer groups
An overall goal is to be achieved by the Indonesian side after three years from the end of the Project. As
explained previously, the only difference between the project purpose and the overall goal of the Projectis the scalability – scope of the beneficiary farmers in the model sites. However, since the indicators of
the overall goal do not define the scope of the target farmer groups, they could be read as to empower
the “entire” farmer groups at the model sites. Therefore, the Team suggests that the Indonesian side and
the Project expert team propose more clear indicators, if necessary.
(4) Establishing a plan to disseminate good practices to other farmer groups
It is expected that DGH and DINAS will take a leading role in disseminating good practices identified
through the implementation of the Project to other farmer groups who did not participate in the Project.
Continued implementation of the follow-up activities such as supporting farmer groups’ trial projects
would be a valuable support to expand the impacts of the Project beyond the target farmer groups. The
Team suggests, especially to DINAS, to consider creating a plan, with budget allocation, to disseminate
good practices to achieve overall goal of the Project.
(5) Considering key points for further dissemination
Through the implementation of the Project, some important points were identified to increase theproductive capacities and the marketing skills of farmer groups. The Team recommends DGH and
DINAS to take into consideration the following points when implementing their own activities.
1) Successful cultivation techniques by some farmer groups should be showcased to other farmers toincrease their motivation. Many farmers will only be convinced to try new techniques after
confirming the results of such techniques.
2) Close monitoring of farmer groups by field staff/extension workers is required to increase theirskills. One of the reasons for the success of the Project was the close monitoring conducted by thefield staff, which contributed to the increased communication between the farmer groups and the
Project team and resulted in quick responses to troubles such as pests and diseases. While limited
number of extension workers is the common challenges in all DINAS, effort should be taken to
mobilize the extension workers as much as possible.
3) Technical support to the farmer groups should be customized as much as possible since each farmergroup has different capacity and needs for the assistance. Group trainings will be efficient but may
not address diverse needs of farmer groups. In this regard, it would be useful to assess the capacityof the farmer groups and tailor the technical support to extent possible to maximize the impact.
Categorization of the farmer groups mentioned in the recommendation (1) will be useful inputs forsuch assessment.
4) Partnership with private sector should be explored not only for the marketing component but also
for the cultivation techniques and access to finance. It would be useful to support leaders and14

selected members of relevant farmer groups to strengthen negotiation and financial skills such asaccounting, since many farmers face difficulties in agreeing business terms with the private sector.
5) Cropping patterns and/or planting plans based on the market demands should be developed by
farmers groups to supply products in continuous manner. The Project’s activities in supporting
target farmer groups to develop planting plans could provide useful inputs to DGH and DINAS tocontinue this activities in their own programs.
3-7 Lessons learnt(1) Taking comprehensive approach to address both productive and marketing capacities
Since horticultural products face significant price fluctuation and frequent changes in market demands,horticultural farmers should improve their skills in business management and market development, in
addition to the cultivation techniques. This would allow farmer groups to adjust their production and thesales based on the market demands. Necessary skills also include capacities in preparing well-plannedplanting patterns, which would enable farmers to have more predictable and stable production. In thisregard, it is necessary to take comprehensive approach to address both productive and marketing
capacities when supporting the horticultural farmers.
(2) Creating Win-win relationships with private sector
The Project worked closely with the private sector, especially from Japan, and introduced new andadvanced agricultural techniques to the target farmer groups. Working with Japanese companies also
provided opportunities for those companies to explore possibilities of doing business in Indonesia bytrying their agricultural inputs/equipment in Indonesian context. Stable relationships could be built only
when a project offers mutual benefits and create win-win situations between farmers and the private
sector.
(3) Analyzing market demands when selecting the products
Information on the market demands is extremely important when selecting crops for cultivation,
especially when crops are new to the target market. The Project introduced new products, Japanesevegetables, to Indonesian markets given the growing demand for the value-added vegetables by the
emerging high- and middle-income population. While Japanese vegetables brought high potential to thefarmer groups to differentiate their products, issues such as consumer education, socialization of buyers,
and marketing strategies become key factors for the successful introduction of such special crops.
(4) Working closely with various departments in the counterparts
The Project worked closely with the various departments in DGH for the implementation of theactivities. For example, the Project worked with the Directorate of Horticulture Seedling in DGH andthe seeds for selected Japanese vegetables were smoothly registered. When a project has a plan to
introduce new crops, it is effective to involve a seed-related department from the beginning sinceobtaining quality seeds is essential for the sustainable production. By working with the various partners
within the main counterparts, the Project could increase effectiveness and efficiency of the Project.

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