80% of all globally consumed cassia (or cinnamon) is produced in Kerinci, West-Sumatra, Indonesia. At the time being, however, this cassia is not processed in Kerinci. The raw material is sold to traders in Padang, who sell it on to processors in Jakarta, Europe or the US. Those then sell it to the end-users. As a consequence no added value remains in the area where the cinnamon was produced. The price for cassia is extremely low, and many farmers give up on cultivating cassia. If no measures are taken, cinnamon threatens to disappear from the Kerinci district after 30 years. To strengthen the farmers’ position on the market and make them more equal to other chain players, it is important that farmers get organized, through a Cooperative for instance.
Change is coming
Cassia Co-op SCE, a European trading company based in the Netherlands, wants to change the current situation. PT Cassia Co-op, the Indonesian branch of Cassia Co-op SCE, is setting up a processing and trading business in Kerinci. Their aim is to create an economically healthy company, which respects the environment and improves the position of the farmers in the cassia supply chain – not only today, but also in the future. The organization is thus pleased to have obtained an organic and Rainforest Alliance certification at the end of 2012. The cinnamon will now be processed and packaged on site and a direct connection between farmers and end-users will be made. All of that to improve the farmers’ income and capacities.