Policy and institutional infrastructure to support Agriculture Innovation SystemsAgroIndustry 4.0 conference

26 July 2018IPB, Bogor, Indonesia

Overview

• Project experiences. Supporting agricultural innovation in Indonesia• Agricultural innovation support arrangements in Australia• Glimpses of Digital agriculture in Australia

Australia – Indonesia collaboration

VALUE CHAINS

PRISMA helps spurgrowth along the value

chain by reducing constraints and barriers to

farmer productivity, performance and market

access.

IRRIGATION

TIRTA aims to increase access to water for poor farmers by encouraging

investment in water management by user

groups and the private sector.

FINANCE

SAFIRA focuses on agricultural value chain

financing to expand smallholder farmer’s

access to formal finance.

RESEARCH

ARISA tests ways to stimulate collaboration between industry and R&D in applying new

technologies to improve farmer competitiveness.

We are one of 4 projects aimed at helping to strengthen Indonesia’s Agriculture Industry

Collectively these projects are called AIPD - Rural

ARISA Applied Research on Innovation Systems in Agriculture

ARISA aims to:

• increase the number and volume of relevant innovations reaching smallholder

farmers in eastern Indonesia;

• support collaboration between research institutions and private firms to

commercially produce and disseminate innovations;

• identify insights for Indonesia’s agricultural innovation systems to achieve

longer term systemic change in institutions and policy; and

• achieve a 30% increase in the incomes of at least 10,000 smallholder farmers in

East Java, NTT, and NTB by the end of 2018

Timeframe

January 2015

to March 2019

Funding from Australia

$6.5M AUD DFAT and

$1.8M AUD CSIRO

ARISA’s partnerships

§ Partnerships between research institutes and the private sector also a critical

component of innovation (organisational and institutional innovation), and

§ Partnership with RISTEK DIKTI is important for learning and adapting at the system

level

We have 2 approaches to achieve this

1. Partnerships / Interventions

• ARISA has co-invested in 8 intermediation partnerships between Indonesian

agribusiness and public or private sector research organisations;

• The aim is to develop and disseminate new commercially viable products,

practices and technologies to smallholder farmers;

• CSIRO provides technical support, as required

Interventions(RI – PS partnership)

Led by INDONESIAN RESEARCH ORAGNISATIONS

$$

$$

INDONESIAINDUSTRY

AUST GOVERNMENT

- DFAT & CSIRO

+ in kind +

Interventions:

1. Beef (Sumbawa) – PT Dharma Raya, PEPEHANI, UNRAM (Sep 15)

2. Cassava (Jember) – PT BCM, local business owners, parent co-op, Uni of Jember (Oct 15)

3. Maize (Lombok) – Syngenta, (ACS Pty Ltd), UNRAM (Sep 15)

4. Sugar (Madura Is) – PTPN X (sugar miller), P3GI (Indonesian Sugar Research Institute) (Dec 15)

5. Dairy (Malang) – Nestle, Uni Brawijaya (April 16)

6. Integrated Pest Management of Shallots (East Java) – Nufarm, Sumitomo, PT Solbi, Uni of Gadjah Mada (Pilot Aug 15 – Apr 16, scale out Jun 16)

7. Pig (Timor) feeding in NTT

8. True Seed Shallot pollination – Pt EWINDO and ITB (Pilot Jun 17 to present)

2. Research & Capacity Building on agricultural innovation systems

• How effective are the interventions/partnerships in stimulating innovation, eg: what are incentives

needed, what are the barriers to adoption, what can we learn to inform future investment in market

led approaches?

• What impact are the interventions having at household level and what is the potential impact when

scaled out?

Our second approach

Planning Monitoring Evaluation and Learning (PMEL) tools used to track impact

The Donor Committee on Enterprise Development (DCED)

Standard is a framework which helps practitioners to articulate

the hypothesis clearly, and to systematically set and monitor

indicators which show whether events are occurring as expected.

This empowers programmes to learn and adapt based on the

monitoring data which they collect – which many would say is

simply good management.

The DCED Standard is designed for programmes that work with the private

sector and have donors that need some assurance that the programs are being

effective. https://www.enterprise-development.org/measuring-results-the-dced-standard/

How the DCED standard works

The DCED standard is a monitoring process for interventions with the private sector. It includes a focus on:

• Planning = Developing a results chains and business model at the start of each intervention as part of your planning process, with

indicator identification (ISD). It also requires baseline data collected at this stage to enable trend over time analysis

• M&E = Annual impact assessment that use the KPIs identified in the results chains to report against the below indicators

• Learning = Audits by independent people to provide assurance and learning that PM&E processes are being followed

Indicator Value cumulative

as at Feb 2018Number of farm households with increased net incomes 4,448

Increase in income % 178%Number of farming households who have adopted

the project innovation (use)5,772

Number of farming households who have been

exposed to the project innovation (access)12,428

Net attributable income increases of all of farm households IDR 128,479,973,590

Number of intervention partners (public sector and private sector) 16

Value of investment by private sector partners (incl. ISPs/ SMEs) in IDR 12,031,304,759

Value of investment of research institutions 3,783,943,340

Net Additional & Attributable Income Changes of farmer HH using project-supported innovations (impact)

In partnership with the Universities we developed Partnership Agreements.

1. A workshop (1-2 days) for each partnership to discuss and agree on roles, responsibilities,

contributions, risks, expectations, joint & individual objectives

• Results in a partnership agreement

• This facilitated process was used to build trust and institutional routines that supported innovation

2. 6- 12 months partnership reflection and learning activities

• Includes a discussion on both progress of activities in the partnership but also the institutional

arrangement agreed in the Partnership Agreement at the start. If necessary these are refined based

on the current situation.

• Desired result create sustainable partnerships that have resilience and are autonomous, scalable and

inclusive.

** PMEL tools to track progress

1. Dialogues with key industry partners to better

understand priorities and opportunities with the

private sector

2. A study of the local private sector context to assess

comparative advantage opportunities for the

universities within their local area

PMEL tools to understand the system challenges and opportunities

*** Insights from our the Comparative Advantage Study

Between May and August 2017, ARISA undertook a comparative advantage study to investigate the business landscape around

Lombok, NTT and the University of Jember (UNEJ) in Jember, East Java. The study found:

• A number of different market dynamics that influence a public research organisations ability to collaborate and with the private

sector and effectively commercialise its research and technology, including .

• a wide continuum of actors ranging from SME traders, with limited capability for technological upgrading to large state owned companies and

multi-nationals with technology readiness and social licence operate challenges.

• Highlighting the need for different intermediation opportunities strategies for different university contexts and partners.

• These strategies range from:

• Incubation programs to create new industries and technoprenures

• Bi-lateral partnerships to commercialise a technology through IPR or implementing contract research

• Pre-competitive collaboration or industry clusters for joined up-action that addresses industry challenges and priorities, emerging themes,

possible research and technology solutions, and strategies for testing, adapting and adopting new or novel solutions

• to name a few

• Examples of opportunities include, the seed sector in Jember, the Tourism and Seaweed sector in Lombok

3. Study tours of Australia to observe and learn about

intermediation and innovation in Australia for comparing and

contrasting with Indonesia and ultimately identifying new

opportunities

4. A learning exchange with other universities to better

understand strengths, weaknesses and opportunities for

intermediation within the Indonesian context to inform Draft

Intermediation Regulation

More PMEL tools to understand the system challenges and opportunities

Insights from our Study Tour in Australia

Agriculture is a significant component of Australia’s National Innovation System and it has a long history and strong

commitment to public research and extension, it:

• began approx. 100 years ago.

• has a revenue matching scheme where government funds are matched by industry levies

• in 2016-17 its levy system (funded in large by the rural industries) generated approx. $482.5 million

• Strong relationships between research organisations, government agencies and businesses. Involves related organisations

such as:

• banks and other financial intermediaries, including venture capital investors

• innovation intermediaries, trade and market access facilitators and other professional advisers

• rural representative and advocacy organisations, and

• agribusiness consultants. Source: Howard partners (2017) Performance review of the rural Innovation system: issues paper

How does this work in reality … policy environment

NATIONAL GOVERNMENT

Department of Industry, Innovation and Science (DIIS)

Department of Agriculture and Water Resources (DWAR)

Department of Education

Responsible for:

- Innovation Policy

- Industry Innovation Clusters,

eg Food

and

- CSIRO

Responsible for:

- Universities

Responsible for:

- Agricultural Policy

- Rural Research and

Development Corporations

How does this work in reality … Institutional arrangements

Rural Research and Development Corporations(RDCs)

$$

$$

GOVERNMENTINDUSTRY- DWAR

Industry Innovation Clusters(eg FIAL)

$$

$$

GOVERNMENTINDUSTRY- DIIS

EXAMPLES

Agroindustry 4.0 in Australia

• The digital revolution in agriculture is heralded as a ‘step change’ in the intelligent use of soil, crop and weather data for farm

management decisions to boost productivity and sustainability.

• Technology will continue to transform Australia and the global economy and Agriculture, one of Australia’s major economic sectors is not excluded from this

• The Prosperity through innovation strategy, by the Office of Science and Innovation Australia identifies that digital technologies will combine with asset-

intensive domains like agriculture to create more value for consumers and new methods for competing.

• CSIROs has responded to this emerging trend by established a Digital Agriculture program to explore R&D partnership to address national and global

agriculture challenges and opportunities through ICT enabled technologies, examples range from

• Climate App’s that use rainfall and weather data to help farmers adapt and manage to climate changes

• Precision agriculture that uses big data to de-risk digital agriculture for farmers

• Food providence, using ICT technology to improve supply chain integrity, biosecurity and increase consumer awareness and connection with the origin

of their food

• Apps to support extension education and awareness

A summary the key innovations and processes from a case study on agroindustry related innovation in Australia

Initiator Technological advances in data capture and analysis create opportunities for decision support systems.

Critical features The private sector has driven much of the application investment in data capture and proprietary use.

Role of research Development of platform science and application development

Operational alliances Mainly alliances between companies.

Strategic alignment of stakeholders at sector or national level

Weak alignment across stakeholder groups reinforces incumbent industry positions and limits creation and sharing of wider benefits.

Solution, product, or system innovation

Product and service innovations. Currently insufficient alignment to create system innovations; evidence of local or ‘service’ level innovation by discrete actors.

Scope of impact (and metrics) Sector wider impact potential but policy and institutional innovation still lagging.

• Constraints encountered and learnt lessons range from farmer acceptance, changes to existing decision making practices and changes to agricultural

knowledge systems; new ‘connectivity’ between multiple parties using, sharing and integrating data, to the importance of new regulations to address

concerns about privacy, data ownership and control

• It is still too early to tell how these developments will contribute to a broader, system-level and cohesive shift.

• But discrete improvements and novel responses are taking place in a broader setting of increasing private sector and R&D attention to

providing platforms for data integration and product development.

Findings from an case study

Thank youProf Andy Hall Commonwealth Scientific Industrial Research Organisation, Australia

26 July 2018Agroindustry 4.0 ConferenceIPB, Bogor, Indonesia