Seeking cheaper, better quality rice: the cooperative rice distribution project in Jakarta

We have published many blogs on civil society’s responses to the COVID-19 pandemic, writes blog series curator David Satterthwaite.

We are now planning a new series of blogs on this theme with the Asian Coalition for Housing Rights (ACHR). This is the first of these – and it summarises the experience of Jaringan Rakyat Miskin Kota (JRMK Network) in getting better cheaper rice when the pandemic hit.

This is a network of 25 large kampungs (informal communities) and six street vendors cooperatives in Jakarta. The JRMK Network is supported by the Jakarta-based NGO Urban Poor Consortium (UPC).

The context of the rice distribution project 

During the early months of the pandemic, Indonesia's urban poor had an especially hard time coping with both the health and economic aspects of the COVID-19 crisis.

With lockdowns, curfews and transport closures, public spaces used by many for their vending and earning were off limits, so the poor lost their income and means of supporting themselves. And there were no clear policies or programmes from the government to provide them with any welfare assistance in the pandemic crisis. 

At the same time, staple foods like rice, fish, vegetables and cooking oil became increasingly scarce in the local markets, and prices climbed rapidly. It got harder and harder for the urban poor to get essential foods to feed their families – especially rice – and hunger became a serious issue.

As rice became increasingly scarce and the prices went up, the quality of rice available in the markets went down. The national government has an aid programme for the poor which buys and distributes inexpensive rice during what it deems to be periods of greater need. But that rice is of very poor quality.

JRMK Network responds to the crisis 

All of the kampungs in the JRMK Network are fully registered as cooperatives, as part of their long and successful campaign to persuade the Jakarta municipal government to recognise these communities and provide them with collective tenure of the land they occupy now or have negotiated to relocate to nearby. 

When the pandemic hit Jakarta, the JRMK Network started right away to discuss how they could help their members get cheap and good quality rice, the primary staple food for Indonesians and essential for survival.

Through their partnership with the UPC and other activists, the network had links with farmers' networks in several parts of Java. We began contacting these networks to see if we could find a source of good quality rice that we could buy cheaply, directly from the farmers, and then sell at cost to network members. 

After gathering information about possible sources and prices in several areas, we asked the farmers to send rice samples for our members to try. The first farmers’ cooperative we approached in West Java sent a sample, but nobody liked it. The second sample came from the Kendeng rice farmers in Central Java, and everyone agreed that the quality of that rice was good.

Ms. Herdayati, a leader in the cooperative in Kampung Elektro, describes the rice-testing process: "I took the sample and went door-to-door, to members of the cooperative, and showed them the rice. They could tell that the Kendeng rice was a good rice.

"Later on, when I cooked some of the sample myself, I found that it was in fact very good rice.

"Later on, when I cooked some of the sample myself, I found that it was in fact very good rice. In Kampung Elektro, we ordered one ton [1,000kgs] of rice for our cooperative members in seven areas of the community. We even sold some rice to non-members." 

The cost of transporting relatively small quantities of rice from Central Java to inner-city Jakarta was very high, though, and could only be reduced by purchasing much larger quantities. But our cooperative members were experiencing serious problems of lost jobs and dramatically reduced buying power.

So even though the rice from Kendang was cheaper than the market price and of better quality, and even though we were buying it at cost directly from the farmers, many community members still couldn't afford it.

So the JRMK network crowd-sourced for donations locally and, along with some small donor funds, we were able to subsidise half the selling price of the rice to cooperative members and distribute 17 tons of rice during the worst of the lockdowns. 

Continuing the rice distribution programme after the subsidy 

After all the donations had been spent, the COVID situation in Indonesia was starting to improve, and people were able to earn again. The network continues to buy rice in bulk from the Kendeng farmers, but now we sell it to cooperative members without any subsidy. 

How the rice distribution works

• Buying the rice from the farmers: the capital we use to buy the bulk rice from the farmers, which has to be paid in advance, comes from the collective savings of JRMK member cooperatives. All the cooperatives operate community savings groups as part of their cooperative activities in the kampung. 
• Distributing the rice to the co-operatives: trucks from Kendeng deliver the order of nine or 10 tons of rice to one point – usually in one kampung. Then the network hires a few guys from one cooperative who form a ‘courier team’ to carry the rice from the drop-off point to each kampung. 
• Distributing the rice within the kampungs: the local cooperative then distributes the rice at several points within the kampung. Usually it's the women cooperative members who manage this part. Coop members come to purchase the rice in cash. They must bring their own bag or basket to carry the rice home, to avoid adding more plastic waste to Jakarta's already overloaded rubbish dumps, rivers and sea.
• Selling the rice to cooperative members: the network has set the selling price for the non-subsidised rice at a maximum of 10,000 rupiah (US$0.70) per kilo to keep this crucial staple affordable to the poor, with no profiteering. 

Achievements and difficulties 

The network has established a permanent working relationship with the rice farmers in Kendeng, and cooperative members get fresh, good quality rice at a much lower price than in the local market.

But as the network develops its plans to continue and expand, we face difficulties in managing fluctuating prices for rice and fluctuating incomes of co-operative members.

Because the rice from Kendeng is grown organically, without any chemicals or preservatives, and comes fresh from the farm, it has to be sold right away, and JRMK doesn't have a warehouse to store unsold rice. 

Eventually, the network would also like to make rice procurement and selling a business unit in each kampung cooperative, with the capital for purchasing the bulk rice coming from the cooperative, not from the JRMK Network. 

Strategy to strengthen the co-operatives

The rice distribution project is one of several initiatives the JRMK Network is using to promote the 25 cooperatives, which are still very new, as a self-managed and multi-sided support system which belongs to the community and exists to help make people's lives in the kampung better.

Other initiatives of the network also help persuade new members to join and see the cooperative as a larger support system – like the network's successful negotiations to get temporary building permits and residential zoning from the city, and the co-operative's housing upgrading project now beginning, with support from ACHR. Several co-operatives have other programmes to supply cheaper staple needs, such as eggs and cooking gas, to cooperative members. 

But expanding membership in the cooperatives is not easy. The internal politics in these large and long established kampungs is very complicated, with lots of overlapping and conflicting vested interests.

In Kampung Elektro, for example, only 150 of the 700 households in the community (21%) have joined the cooperative so far.

As Ms. Herdayati explains: "There are still a lot of local leaders in the kampung who resist the cooperative or see it as a threat to their patronage, and make it difficult for JRMK to organise and to bring more families into the cooperative."