- The tea sector in Indonesia has historically contributed to economic, social, and environmental development. However, it has experienced a decline over the past decade in terms of output, employment, foreign exchange earnings, and incomes for small farmers and other stakeholders. If the decline in Indonesia’s tea sector and its competitive advantages continues, approximately 1 million families risk losing their primary source of income, and the country could forfeit over $100 million in foreign exchange earnings.
- A strategic development study employing SWOT analysis has identified four broad strategies to reverse the decline and enhance the competitiveness of Indonesian tea in both global and local markets. These strategies involve implementing a growth strategy through horizontal integration, including: (1) Improving productivity and quality; (2) Enhancing governance and strengthening partnerships; (3) Increasing market uptake, particularly in the domestic market; (4) Ensuring compliance with tea standards for local and global requirements.
- Three initiative action plans have been proposed to accelerate these growth strategies in enhancing the competitiveness of Indonesian tea for a sustainable industry. These include: (1) Formulating guiding principles; (2) Building a secure mechanism for sustainable financing (including both APBN and Non-APBN sources); (3) Requiring feasibility studies and collaborative partnerships for the implementation of strategic programs.
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