ADB approves $85m loan to promote horticulture development in Indonesia

The Asian Development Bank (ADB) has approved an $85 million loan to promote the development and profitability of the horticulture sector in Indonesia.

The Horticulture Development in Dryland Areas Sector Project will improve the climate resilience, sustainability, efficiency, and profitability of horticulture production in dryland areas located in several provinces across Indonesia. An estimated 25,000 poor and near-poor farmer households, including 5,000 women farmers, are expected to directly benefit from the project.

“The project comes at an opportune time for Indonesia, which is experiencing growing domestic demand for horticulture products and increasing threats due to climate change,” said ADB Country Director for Indonesia Jiro Tominaga. “By helping boost the productivity and resilience of the horticulture sector, the project will help increase employment opportunities and encourage new businesses in rural communities.”

Indonesia’s horticultural sector faces several challenges, including access to quality and affordable seeds, inadequate infrastructure and technology, and insufficient logistics support. Improving horticulture in Indonesia is important to meet the country’s growing food needs and to help smallholder farmers profit from their plots of land. 

The project will build on past and ongoing agriculture initiatives in Indonesia supported by international financial institutions. It will introduce climate-resilient land, soil, and water management systems, establish a systematic process to engage with the private sector along the value chain, increase participation by women and youth in horticulture, and introduce digital services. 

The project will provide farmers with high-quality and certified planting material for horticultural crops that are suited for agroclimatic conditions at project locations. It will also introduce climate adaptive on-farm practices, including grants to farmers to purchase inputs and farm equipment to increase climate resilience.

Horticultural value chains and access to markets are expected to be improved under the project by establishing and strengthening micro, small, and medium-sized enterprises (MSMEs), promoting partnerships between MSMEs and the private sector, and investing in post-harvest facilities managed by farmers groups.

In addition, the project will introduce relevant government agencies to best practices in horticultural development, including mainstreaming climate change adaptation in horticulture.

The International Fund for Agriculture Development will also extend a $40 million loan to the project to be partially managed by ADB.