PROMOTING FAIRTRADE SYSTEM IN INDONESIA WITH THE AIM TO INCREASE COFFEE EXPORTS TO GERMANY: THE ROLE OF THE INDONESIAN GOVERNMENT

Abstract

This study analyses the dynamics of Indonesian coffee exports to Germany, emphasizing the role of the Indonesian government in promoting a Fairtrade system to enhance market access and competitiveness. Germany the second-biggest coffee importer globally and the largest inside the European Union represents an essential market for Indonesian coffee exports. Despite its promise, Indonesia encounters considerable hurdles, such as intense competition from Brazil and Vietnam, inadequate acceptance of sustainability certifications, and inefficiencies within the supply chain. The research utilizes a qualitative technique, integrating stakeholder interviews, an analysis of export statistics from 2013 to 2023, and an examination of governmental tactics. The results indicate that although Indonesia has premium coffee varieties like Gayo and Toraja, its export performance to Germany is erratic due to weak infrastructure, limited farmer capacity, and elevated certification prices. Moreover, Germany's inclination towards environmentally certified coffee underscores the significance of adherence to international standards such as Fairtrade. This study highlights the necessity of incorporating Sustainable Development Goals (SDGs) and Environmental, Social, and Governance (ESG) principles into Indonesia's coffee export policies. Initiatives to enhance training, optimize logistics, and expand the implementation of sustainability certifications are essential for augmenting Indonesia's market share. Furthermore, cooperation among the government, corporate sector, and international organizations is crucial to assist smallholder farmers and improve the overall value chain. By addressing these difficulties, Indonesia may enhance its standing in Germany's coffee market, improve the economic welfare of its farmers, and advocate for sustainable and equitable trading practices. This report emphasizes the essential importance of a strong Fairtrade system and sustainability-oriented measures for attaining enduring growth in the global coffee market.