Healthy cooperative and farmers with organic rice production Koperasi Serba Usaha Andalan Tani Organik Mbay (KSU Atom) is a cooperative of rice farmers located in Mbay District, Flores, Indonesia. Atom was first established as an association of organic rice farmers in 2009 with the purpose of providing a better market access for rice farmers in Mbay. In 2014 Atom Association changed its status into a producer cooperative and in 2016, Atom further incorporated itself into a Koperasi Serba Usaha (multi-purpose cooperative) and works with 854 farmers of which 91 paid the entrance and savings fee.
  
The primary business of Atom is purchasing non-certified white and red rice. In 2016, Atom purchased 14.8 tons of rice, sold 11.4 tons of rice to consumers and earned an estimated margin of Idr 14,935,514 . Aside from selling rice, Atom also sells organic fertilizer and operates a small warung (restaurant) on a profit-sharing basis at its office premises.
  
The main focus till now of the cooperative has been on training of farmers in organic growing of rice. This to promote organic production and to increase the number of farmers. In general farmers experience the health advantages to grow organic rice, though the extra work should be remunerated with higher margin than the conventional produced rice.
  
The cooperative has 5 staff, next to 5 board members and 5 supervisory board members. Although everyone is doing their utmost best and feels very committed to the cooperative, no clear job descriptions are in place. As most cooperatives also no strategic plan nor business plan have been developed yet.
  
The cooperative has a bookkeeping in place in Excel, though limits to cashbook. This limited bookkeeping system combined with the no financial audit makes it difficult for Agriterra to get an accurate picture of Atom’s financial situation.
  
In terms of governance, both Board and Supervisors are enthusiastic and open for new ideas. A governance health check was organized and both board and supervisors admitted the weak points of Atom and expressed their willingness to improve.
  
In order to make the cooperative a well running cooperative. We suggested the cooperative to undergo the following development:
  
Year one (Oct – Dec 2017):
  
Focus will be on the improvement of the bookkeeping system. With implementation of a bookkeeping system it will be more easy for board and supervisory board to monitor the progress and current situation of the cooperative. A training in financial management will help everyone to understand better the importance of good financial bookkeeping.
  
As it is important that board and supervisory board as well as management understand their position and roles, a governance training will be carried out. This will also give better understanding the parts which have to be changed in the bylaws.
  
The activities will consist of:
  
• Implementation of bookkeeping system
  
• Financial management training
  
• Governance training
  
Year 2 (Jan – Dec 2018)
  
With a bookkeeping in place it, it will be good to have a financial audit carried out. Not only will this give a clear starting point of the balance sheet, but also a clear message to the members that the financial data is transparent.
  
To get the members more lined up, two trainings will be carried out in which we will train the trainers to secure that more members will benefit of the trainings. One training will focus on producing of organic fertilizer. Although staff and members have been trained in organic fertilizer, new techniques can improve the nutrition of the fertilizer and have a larger impact on the produce. Different techniques will be demonstrated and practised to give options to the farmers. As the farmers don’t use pesticides to get rid of the weeds, it is a very work intensive process to get rid of the weeds in the field. Under the project the cooperative would like to buy a weeding machine to show farmers the advantages and to give them some experiences. A few machines won’t be enough, but it will be a trigger also for farmers to support the cooperative to make it possible to buy more weeding machines.
  
Another important training for the farmers is about cooperative principles. All farmers became once a member of the cooperative, but probably don’t think daily about the cooperative principles. But it is important that members also realise what their rights and obligations are.
  
To give the board and management a bit more guidance, we suggest to draft a strategic plan for the coming three years. This gives some clear direction for the cooperative where they are heading to. One of the most important things to be done is to secure that the rice is bought against a good price and larger quantities to secure a better margin for the farmers. During a value chain mapping training, the cooperative will get more insight where they are standing and what options they have. New buyers will be sought to secure stable and higher prices.
  
During the first year the (supervisory) board received a governance training. This will have given them more insight in what has to be done about governance in the organization. With the workshop of redrafting of the bylaws, the cooperative shall go through their bylaws and should adjust to make them in line with the strategic plan as well as new government regulations.
  
Activities 2nd year:
  
• Financial audit
  
• Training on organic fertilizer
  
• Cooperative principles training
  
• Strategic planning
  
• Marketing of product
  
• Redrafting of the bylaws
  
Year 3 (Jan – Dec 2019)
  
The year will start again with a financial audit, also for monitoring and evaluation purposes. As the cooperative would like to expand their assets and buy more machinery to support the farmers in their activities, a need for investment capital is required next to working capital. As it is difficult to obtain loans if no equity can be shown, farmers should be introduced to internal capitalization. After some internal training for staff, board and management, farmers will be informed about internal capital through socialization.
  
To be able to attract external finance, a bankable proposal has to be developed. This proposal will indicate the need for funding for investments in assets like warehouse as well as in machinery and truck. To secure that the cooperative will run well, job descriptions will be drafted of staff members.
  
Activities 3rd year:
  
• Financial audit
  
• Internal capitalisation
  
• Socialisation/training of farmer representatives
  
• Business planning/bankable proposal
  
• Job descriptions
  
During all the years, coaching will be ongoing. Frequent visits will be made to secure that training sessions will be followed up and problems stopping developments will be overcome. Yearly monitoring reports will be presented about the activities and developments of the cooperative.


In 2018, Agriterra will support KSU Atom in:
Implementing Zahir accounting system
Financial management training
Governance training
Training on financial procedures for staff


KSU Atom is a very new cooperative. Prior to becoming cooperative, they are an association. They did not have proper background nor knowledge about running a business organization. Thus this year goal is to improvement bookkeeping system and increasing knowledge of different roles and function within cooperative.