This document analyzes regulations on organic food in Indonesia and their impact on the organic supply chain. It finds that regulations have increased organic certification bodies and certified organic producers. However, many small organic farmers cannot afford certification, limiting supply. It recommends that the government help fund certification and adopt participatory guarantee systems to support small farmers while protecting consumers. Public education on certification importance is also key to developing the organic business in Indonesia.

1. ANALYSIS OF ORGANIC FOOD
REGULATION AND ITS IMPACT ON
ORGANIC SUPPLY CHAIN IN
INDONESIA
Ahmad Sulaeman, PhD
Department of Community Nutrition – Faculty of Human Ecology, Bogor
Agricultural University (IPB) Indonesia and Researcher at the Center for
Tropical Horticultural Study/Center for Tropical Fruit Study IPB
Presented at The International Symposium on Marketing and Finance of the Organic Suplly Chain, 23-26
September, 2012 Seoul, Korea
1

2. Outline
INTRODUCTION
ORGANIC FOOD MARKETING AND CONSUMER
PERCEPTION ON ORGANIC FOOD
REGULATION RELATED TO ORGANIC FOOD
AND ITS IMPACT ON ORGANIC SUPPLY CHAIN
CONCLUSION

3. Introduction
Indonesia “Go Organic 2010
significant achievements ;
increased consumer awareness, interest ,
and demand on organic food
the number of organic producer and
trader the width area of organic
the number of government budget for
organic agriculture development

6. Introduction ....,,,,,,continued
A lot of food products with organic
claim are available in the market.
From both locally grown and imported
Miss perception of consumer on
organic food
To protect both organic consumers
and producers government drafting
and formulated policies and regulation

7. Width Area for Organic
Agriculture in Indonesia
Type of organic agriculture area Width (Ha)
Certified Area 90 135.30
On going certification process area 3.80
Area with PAMOR certification 5.89
Area without certification 134 917.66
TOTAL 225 062.65
Source: IOA (2011)

8. ORGANIC FOOD MARKETING AND
CONSUMER PERCEPTION ON ORGANIC FOOD
Various marketing strategies:
(a) direct selling, door to door,
(b) through government institutions and
campuses,
(c) through religious organization
(church),
(d) through niche organic stores, and
(e) through modern market.

9. Different ways to convince consumers
(a) certifying the product through third party
certification and put logo “ORGANIC INDONESIA
on its label”,
(b) certifying through participatory guarantee system
eg. PAMOR Certification
(c) testing the product and put pesticide free claim on
the label and
(d) self claim on its organic status without any proof
but rely on consumer trust

11. Consumer perception
Poor understanding on organic food:
80% perceived as food that is free of pesticide,
preservative, and chemical.
Only8 .2 % perceived as food that is natural, free
preservatives, free chemical fertilizer, free pesticide,
free antibiotics, no additives, no GMO, safe, and
naturally grown and environmentallly oriented (Gantina
and Sulaeman 2006)
This fact is then well used by the producers and
traders to sell their products with high price
without any gurantee of its organic status except
free pesticide label only or self claimed organic.

12. Consumer knowledge on organic food
100
92.9
90
80
Percent
70
60
50
40
30
20
5.9
1.2
10
0
Kurang (<60) Baik (>80)
Level of knowledge
Source: Gantina and Sulaeman (2006)

13. Consumer Reasons for Buying Organic Food
87.1
90
80
70
60
Percent
50
40
30
7.1
20 2.4 2.4 1.2
10
0
For healthy To conserve environment
Attractive appearance and packaging Just wanto to try
Other reason
Source: Gantina and Sulaeman (2006)

14. Benefits Consumer looking for from
consuming organic food
74.1
80
60
40
Percent
18.8
20 4.7 2.4
0
Fulfill family nutrition need To maintain health
Curing disease/diet Other
Source: Gantina and Sulaeman (2006)

15. REGULATION RELATED TO ORGANIC FOOD
AND ITS IMPACT ON ORGANIC SUPPLY CHAIN
Food law No 7/1996
Consumer Protection Law No 8/1999
Government Regulation No 24/2008
regarding Food Safety, Quality and Nutrition
Goverment Regulation No 69/1999 regarding
Food advertisement and labeling

16. REGULATION RELATED TO ...........continued
Indonesian National Standard (SNI) on Organic Food
System (SNI No 6729/2010)
NADFC Regulation HK.00.06.52.0100 year 2008
concerning Control for Processed Organic Food
NADFC Regulation No HK.00/05.1.2569 year 2004
concerning Criteria and Management of Food Product
Assessment
MoA Regulation No 27/2009, then canged into No
88/2011 regarding Food Safety Control for exporting and
importing plant fresh produce
MoA Regulation (draft) on Requirements and Procedure
for the Implementation of Organic Agricultural System

18. Indonesian Organic Logo

19. Impact of Regulations
1. The growth of organic ceritification body
Accredited Organic Ceritification Insitution in
Indonesia
No Name of Institution Location
1 Biocert Bogor – West Java
2 INOFICE Bogor – Wet Java
3 Mutu Agung Lestari Depok – Wet Java
4 Sucofindo Jakarta
5 PT Persada Jogyakarta
6 LeSos Seloliman – East Java
7 LSO West Sumatera Padang – West Sumatera

20. 2. The number of certified organic producer increases
Organic Agriculture Producer in Indonesia in 2011
Source : IOA (2011)

21. The comparison of width area for
organic agriculture 2011
Source : IOA (2011)

22. Impact of Regulations...continued
3. The availability of organic certified product in
Indonesian market with the label of ORGANIC
INDONESIA increased the consumer trust

25. Challenges
Most of organic producers are small farmers or
household scale industries not afford for
organic certification
Very limited number of local produced organic food will
be available in the market affect supply chain
chance for imported product
Many organic items produced by smale scale
farmers/industries can not be sold as organic in spite of
having fulfilled the Indonesian Organic Standard will
rely on loyal customer trust eventhough without legal
organic label
There will be many foods claimed as organic with
fake organic certificates

26. Solutions
Need government hand and financial agencies to
help certification
Need more government budget to pay the third party
certification
Adopt other scheme of certification?
Internal Control System
Participatory Guarantee System
Second party certification by govenrment
Public campaign about the importance of
certification for both consumer and the
business

27. CONCLUSION
Business in organic food has been growing fast in
Indonesia and there is a trend that organic has become a
life style.
To protect organic consumer as well as to provide
protection and to develop organic farming, government
has established several regulation which will affect the
organic food supply chain.
To anticipate unexpected impact of those regulations on
organic supply chain, government and organic food
business player should take actions which may benefit
for both consumer and the business itself.

28. KAMSA HAMNIDA – THANK YOU
Further information:
Prof . Ir. Ahmad
Sulaeman, M.S., Ph.D.
Dept Community Nutrition – Faculty of
Human Ecology Institut Pertanian
Bogor, Kampus IPB Darmaga BOGOR
16680 telp. 02518621258/8629227,Fax
0251-8622276/8629227, HP
087874444468
email:
asulaema06@gmail.com