Value Chains in Aceh, Indonesia - Building Peace One Link at a Time

12 July 2011
ITC News

In post-conflict Aceh, Indonesia, a joint initiative between three United Nations (UN) agencies (the UN Development Programme (UNDP), the UN Environment Programme (UNEP) and UNCTAD, the UN Conference on Trade and Development) together with the district government of Aceh Selatan, is helping to revive economic activity by working with the value chains of culturally significant products and taking into consideration BioTrade principles and criteria.

UNCTAD’s BioTrade initiative is a unique approach to value chain development that supports economic growth in an environmentally and socially responsible manner by working with products and services derived from local, native plants and animals, and other nature-based businesses such as ecotourism.

With support from the Swiss State Secretariat for Economic Affairs, UNCTAD currently supports BioTrade programmes in 15 countries worldwide, including in Latin America, Africa and South-East Asia.

In 2009, UNCTAD and UNDP conducted an assessment and initial scoping mission which recognized that complementary programmes on reintegration and BioTrade were ongoing in Colombia, and that the potential existed for BioTrade to be introduced as a reintegration option in Uganda and Aceh, Indonesia. This work has been further incorporated as part of a UNDP–UNEP Joint Initiative on Disarmament, Demobilization and Reintegration and Natural Resource Management, also launched in 2009, which seeks to reintegrate ex-combatants in post-conflict areas through better understanding of the linkages between reintegration and natural resources.

A pilot project in Aceh Selatan, on the coast of Aceh Province, is the first funded joint project to officially link BioTrade with social and economic reintegration and peace-building programmes in communities affected by the conflict between the Free Aceh Movement and the Government of Indonesia that ended in 2005.

During the 15th and 16th centuries, Indonesia was famous for sought-after spices such as cloves, cinnamon, chilli, lemon grass, ginger, turmeric and nutmeg that sold for high prices on the European market. The topographic condition is particularly suitable for growing nutmeg trees and, as such, it is has been a historical and cultural commodity that has long generated an income for communities in the region.

The cultivation of nutmeg continues to be especially important in Aceh Selatan as it forms part of the biologically diverse forest gardens that have been tended by communities for generations. Today, nine of the 16 subdistricts in the area grow nutmeg, producing several products made from the nutmeg fruit and seed including sugared candies and syrup, spice and essential oil. Each of these products forms part of the overall value chain and is important to the economic livelihood of specific groups in the communities.

By supporting multiple aspects of the value chain through a holistic approach, the UN partnership with the local government hopes to target marginalized groups, including women, and to provide much-needed resources and technical assistance to strengthen the overall value chain through improved processing practices, quality standards and linkages to national and international markets. The UNDP team in Aceh Selatan is working through the local government to ensure that efforts to strengthen value-chain linkages are sustainable and integrated into governmental planning budgets in the coming years. Through the programme, UNDP also works with the local government to help communities solve issues such as replanting nutmeg in fields that have been affected by pests and disease in some parts of Aceh Selatan.

In line with the BioTrade principles and criteria, the Nutmeg Forum Aceh has been established to help increase nutmeg productivity and strengthen market demand. It will also help create social cohesion and synergy among local communities through partnerships between farmers, traders, government, community support officers and researchers.

Nutmeg Value Chains: 
A Gender-Responsive Process

In Aceh Selatan, the production of nutmeg candies and syrups provides an income for women-headed households including widows and female ex-combatants who are otherwise marginalized from economic activities. These women often work from home and sell their products to local markets. Nutmeg seeds are processed into spice or essential oil depending on their maturity and quality. For the women engaged in food processing and making beverages from nutmeg, the programme will provide skills training in modifying the shape and taste to better suit market demand.

Although both women and men often harvest and collect the nutmeg together, the distillation and selling of essential oils in Aceh Selatan is mostly done by men. Each point of the value chain (from collection, transformation and processing to packaging, marketing and distribution) will be addressed by the BioTrade programme to identify what is needed to improve the final product and maximize economic and social benefits for the producers and processors.

The UNDP, UNEP and UNCTAD partnership hopes to help communities in Aceh Selatan take part in an environmentally and economically feasible activity that contributes to improved livelihoods and provides much-needed support, especially for marginalized women. By working in accordance with the principles and criteria of UNCTAD’s BioTrade initiative, it is also hoped that growth in the nutmeg value chain will be sustainable from environmental, social and economic perspectives and will ultimately even support the protection of native biodiversity in Aceh Selatan.

It is anticipated that by the end of 2011, this model of working with natural resources through a value chain approach will be scaled up and applied to other conflict-affected districts in Aceh.

For more information about UNEP’s Biodiversity programmes and activities visit www.unep.org/themes/biodiversity/ and http://www.undp.or.id


Principles and criteria

  1. Conservation of biodiversity
  2. Sustainable use of biodiversity
  3. Fair and equitable sharing of benefits derived from the use of biodiversity
  4. Socio-economic sustainability (productive, financial and market management)
  5. Compliance with national and international regulations
  6. Respect for the rights of actors involved in BioTrade activities
  7. Clarity about land tenure, use and access to natural resources and knowledge