Executive summary
Indonesia's agriculture drives the economy but faces environmental risks and low global value chain integration (World Economic Forum, 2024; Antara News, 2024).
Indonesia seeks to protect smallholder farmers whose livelihoods depend on exports to Europe from restrictive regulations (Erucative:2024).
According to our Co-founder and Board member, Ainu Rofiq, we ensure adaptability to global regulations like EUDR and other regulations by adapting our system to accommodate and achieve compliance with these regulations and bridging Indonesian agribusinesses with international stakeholders through compliance solutions, helping businesses stay competitive in global markets.
Indonesia's agricultural sector is vital to the nation's economy, serving as a global leader in soft commodity exports. According to Antara, the value of agricultural exports reached USD 52.9 billion, while imports totaled around USD 30.3 billion in 2023, indicating a positive trade balance in agricultural commodities (Antara: 2023).
However, it also faces significant environmental risks, such as deforestation and greenhouse gas emissions stemming from land-use changes. Despite its economic importance, the sector remains less integrated into global value chains compared to its regional peers (World Economic Forum: 2024). This is partly due to lower technological capabilities, which affect product quality and production efficiency, making it harder for Indonesian firms to meet international standards (Penerbit BRIN: 2022 & World Bank: 2022). To bridge this gap, Indonesia is working to protect smallholders whose livelihoods depend on exports to Europe, from restrictive regulations (Erucative:2024).
To address these challenges and explore the opportunities ahead, we invite our Co-Founder and Board Member, Ainu Rofiq, to share his insights. Leveraging his extensive experience in agribusiness innovation, Rofiq shares key strategies for navigating regulatory compliance and empowering smallholder producers to compete effectively in the global marketplace.
1.Q: Could you walk us through your journey in the agricultural industry? What experience, and inspirations led you to this field, and eventually founded Koltiva to achieve traceable and resilient supply chains?
(AR): My journey in the agricultural sector began in 2009 when I joined Swisscontact, an independent non-profit development organization dedicated to fostering sustainable economic growth through private sector-driven initiatives, aiming to enhance the quality of life in developing and emerging countries, especially in cocoa farming projects in Aceh. In my initial role, I was responsible for developing and managing a database system for data monitoring using an Access-based platform. While this marked my first professional involvement in agriculture, my roots in a farming family gave me a deep appreciation for the challenges faced by smallholder producers. This experience showed the immense potential of technology to address real-world agricultural issues and drive transformative change.
By 2012, as the project expanded across multiple provinces, it became clear that our desktop-based system was no longer sufficient to manage the growing complexity and scale. Recognizing the rapid advancements in mobile and web technologies, I envisioned a more robust system that could transform how agricultural data was collected, monitored & utilized. This idea formed the foundation of Koltiva, which I co-founded together with Manfred Borer and Furquonuddin Ramdhani in 2013. Since its inception, Koltiva has grown into a global leader in delivering technology-driven solutions tailored to the unique needs of agribusinesses to achieve the transparent and resilient supply chains, meet regulatory standards, support sustainability compliance, streamline operations, and thrive in global markets.
2.Q: What are the biggest challenges faced by agricultural companies, particularly SMEs, in meeting national regulations and international standards to access global markets?
AR: Agricultural companies, especially SMEs, face numerous challenges in achieving compliance. One major obstacle is the complexity of global supply chains, which require precise traceability and transparency. For example, companies need to ensure that raw materials are sourced legally and sustainably.
For smallholder producers, the challenges are even greater. Issues such as land legality, limited knowledge of sustainability practices, and the high cost of adopting necessary technologies make compliance difficult. Many smallholders struggle to invest in traceability systems or certification processes due to financial constraints. Additionally, their awareness of how these regulations impact their operations remains limited, making it even more challenging to adapt and compete in global markets. Furthermore, varying regulatory frameworks across countries add another layer of complexity for businesses looking to expand internationally.
3: Q: How does technology play a role in supporting compliance efforts in the agricultural supply chain?
AR: Our role is to facilitate a transparent and accountable agricultural supply chain. I believe technology is transforming regulatory compliance in several ways: transparency and traceability, risk management, automation and efficiency, and building trust by enhancing collaboration. We work closely with governments, NGOs, and businesses to provide solutions that ensure full traceability and help stakeholders meet evolving regulatory standards. It’s all about empowering local communities, enhancing supply chain integrity, and supporting long-term sustainability.
4. Q: How do technologies developed by Koltiva, such as KoltiTrace and our suite of digital platform, help agricultural companies ensure transparency, improve efficiency, and meet regulatory and international standards?
AR: Our technologies are designed to tackle these challenges comprehensively. KoltiTrace, provides end-to-end supply chain traceability by collecting, verifying and connecting data from producers, collectors, processors, manufactures, to the buyers through mobile and web platforms. By digitizing every step of the supply chain, agricultural companies gain a granular view of product origins and processes. This ensures adherence to regulatory requirements, such as the EU Deforestation Regulation (EUDR), by proving compliance with deforestation-free and sustainable sourcing practices.
Our technologies streamline complex supply chain operations, for instance, KoltiTrace ensures supply chain traceability, enables real-time monitoring and reporting, reducing manual errors, accelerating reporting processes, and enhancing decision-making processes. By combining advanced data analytics, geospatial mapping, and producers’ engagement tools, we bridge the gap between regulatory compliance and operational excellence. Our solutions help agricultural companies not only build trust with stakeholders but also contribute to sustainable development goals at a global scale.
In order to driving more impact, our ecosystem also uplifting smallholder producers' livelihoods and rural entrepreneurs with technology-powered solutions like capacity building, training & coaching with expert agronomists and field team through KoltiSkills, also KoltiHub enabling rural communities by facilitating financial services, quality inputs, to the single-origin crop trading opportunities aimed at improving efficiency and compliance.
Besides, Beyond traceability, these initiatives also improve livelihoods by enabling premium distribution, allowing smallholders to grow and scale their operations. By integrating these solutions, we help agribusinesses meet regulatory requirements, streamline operations, and create more sustainable growth opportunities.
5. Q: One of the key challenges for producers in Indonesia in regulatory compliance is land legality. With the acceleration of digitization and the growing need for robust regulatory compliance, how does Koltiva leverage technology to help small producers and businesses navigate complex due diligence requirements, including land legality, sustainability, and labor standards?
AR: Our approach involves providing end-to-end traceability solutions that address key regulatory concerns. We enable businesses and producers to conduct comprehensive due diligence by mapping their supply chains, verifying land legality, and ensuring compliance with sustainability and labor regulations, including those outlined in frameworks like CSRD and CSDDD.
With upcoming regulations and looming deadlines, the role of stakeholders in ensuring compliance becomes increasingly crucial. We collaborate with governments, NGOs, and businesses to provide solutions that enable full traceability and help stakeholders meet evolving regulatory standards. It’s all about empowering local communities, enhancing supply chain integrity, and supporting long-term sustainability.
One example is the EUDR Due Diligence Report Auto-Generation feature within KoltiTrace MIS, which streamlines compliance through a structured process:
1. Data Collection & Supply Chain Mapping
Businesses can achieve full traceability by mapping their supply chains and verifying land legality, allowing them to trace product origins down to individual plots. Through this system, supplier details, shipment records, and geographic data are collected to enhance transparency and ensure compliance with regulatory standards.
2. Risk Assessment & Compliance Validation
KoltiTrace MIS evaluates environmental, and deforestation risks based on sourcing locations while also assessing compliance with sustainability and labor regulations. The platform provides businesses with a comprehensive risk profile for each supplier and production area.
3.Automated Report Generation
The system automatically generates a structured Due Diligence Report, providing a detailed breakdown of key compliance metrics. Each report includes plot ID, geographic details, and EUDR compliance status, along with supplier and shipment data such as net mass, HS Code, and production details. It also outlines the methodologies used for compliance validation, ensuring traceability aligns with regulatory standards.
4.Compliance Monitoring & Decision Support
KoltiTrace MIS provides businesses with a comprehensive overview of supply chain risks and compliance gaps, enabling data-driven decision-making to proactively mitigate risks and ensure regulatory adherence. With customizable and in-depth reporting, the platform streamlines compliance processes, reduces administrative burdens, and enhances supply chain transparency—ultimately fostering a more sustainable and accountable industry.
Besides KoltiTrace, we offer KoltiSkills as an extension service for businesses needing additional support in sustainability and compliance. KoltiSkills provides supply chain mapping & verification** to trace product origins, training & coaching to build awareness and implement sustainable practices, and business support to strengthen key supply chain stakeholders. Additionally, it offers certification preparation for standards like Rainforest Alliance, RSPO, 4C, and FSC, ensuring businesses navigate compliance with ease and enhance long-term sustainability.6. Q: In the context of international regulatory compliance, how does Koltiva assist small producers in understanding and adhering to necessary standards, enabling them to not only meet global market requirements but also enhance their competitiveness?
AR: Our support for small producers begins with education and capacity building, working with the partners, such as the government and private sector to ensure effective collaboration at various levels to address compliance needs. We provide workshops, training sessions, and digital learning modules that simplify regulatory requirements and emphasize their practical applications. Additionally, we are actively involved in discussions on the National Dashboard developed by the government to strengthen alignment and implementation.
One key area is land legality compliance, which is critical for EUDR adherence. Producers must demonstrate legal land tenure to comply with international sustainability standards. In Indonesia, this includes obtaining certifications or licenses like Surat Tanda Daftar Budidaya (STDB). A smallholder cultivation registration document that serves as proof of legal land use and farm ownership. Our training supports producers in navigating the STDB application process, ensuring proper documentation and ongoing compliance. We also assist them in obtaining the necessary certificates, as many farmers in Indonesia lack proper documentation.
KoltiSkills offers Segregation Training as an extension service, supporting producers in complying with EUDR regulations. In Thailand’s rubber industry, for example, small producers must differentiate between deforestation-linked and non-deforestation-linked commodities to ensure supply chain transparency and regulatory compliance
To prevent non-compliant produce from entering the EU market, processors must ensure proper segregation throughout the supply chain. Implementing Segregation Training and Monitoring helps processors establish clear protocols, ensuring that non-compliant supply is identified, separated, and documented,minimizing regulatory risks and maintaining compliance.
7. Q: How does Koltiva help its partners and clients prepare for changes in international regulations, such as sustainability or food safety requirements?
We assist partners and clients in adapting to evolving international regulations through a combination of technological tools and tailored training programs.
Our platform, KoltiTrace MIS, offers monitoring and reporting capabilities, enabling businesses to track their compliance status and promptly make necessary adjustments.
We understand that some regulatory landscapes often require specific adaptations. Our product development is driven by these changing requirements, allowing us to customize solutions that align with various regulations. This flexibility ensures that our applications facilitate easier compliance, as they are designed to meet existing regulatory standards.
By integrating advanced technology with practical training, we empower clients to navigate complex regulatory environments confidently, ensuring they remain compliant and competitive in the global market.
In addition to our technological solutions, we conduct regular Capacity Building initiatives to raise awareness about evolving regulatory trends and provide practical compliance strategies. These efforts ensure that our partners are well-prepared to meet new requirements and capitalize on emerging opportunities.
For instance, to assist clients in achieving EUDR compliance, we focus on ensuring the segregation of the rubber supply through comprehensive dealer training and monitoring. This approach is crucial because dealers might not be aware of the segregation process and the factory’s requirements. Aligning expectations at the outset is essential for successful implementation.
As part of the Segregation Training, dealers receive an Approved Producer List and must purchase only from EUDR-compliant sources. If buying from others, strict segregation is required, and new producers must be reported for mapping and verification.
Non-compliance records in KoltiTrace document suppliers' training efforts, ensuring accountability and continuous improvement. Segregation monitoring follows, using a structured questionnaire to assess dealer compliance and guide corrective actions. A protocol is then established for ongoing improvement. These capacity-building efforts help partners navigate regulations, ensuring compliance and boosting global competitiveness.
8. Q: One of the key regulations, the European Union Deforestation Regulation (EUDR), was recently postponed. How does this postponement impact Indonesian agribusiness players? Is the delay in its implementation more of a challenge or an opportunity?
AR: The EUDR imposes stringent requirements to ensure that supply chains are deforestation-free. For Indonesian agribusinesses, this means increased efforts to map supply chain traceability, verify legal land ownership, and assess environmental impacts. While these measures are demanding, they also provide an opportunity to enhance sustainability and gain access to premium markets.
The delay in implementation offers additional preparation time for businesses to strengthen their systems and processes. However, for those who have already achieved compliance, the postponement may lead to a sense of underappreciation, as there are no immediate economic rewards for early adopters. However, now those companies are better positioned as they are more ready to address the requirements which could put them in a commanding position in the market. On the other hand, the extended timeline allows for more time to educate producers, refine traceability efforts, and improve market positioning, ultimately ensuring stronger and more sustainable compliance across the sector.
9. Q: One key requirement for smallholder compliance is the availability of legal documents related to their cultivation operations. In Indonesia, one of the main challenges is obtaining the Cultivation License (Surat Tanda Daftar Budidaya – STDB). How does Koltiva support smallholders in securing land legality through its digital solutions?
AR: Our product and service pivotal role in facilitating land legality through its advanced mapping services. Using GPS and polygon technology, we create accurate maps of farm boundaries and verify land ownership status. Our team also conduct ground-truthing to ensure its accuracy. This data will be crucial to use by the producers to apply for STDB.
In collaboration with local governments, we accelerate the registration process for smallholder producers. This approach not only helps producers achieve regulatory compliance but also enables them to access global markets and improve their livelihood.
As Indonesia’s agricultural sector remains a vital driver of the economy, its ability to integrate into global value chains and meet evolving regulatory standards will determine its continued growth and competitiveness. To explore how Indonesian businesses can navigate these challenges, Ainu Rofiq, our Co-Founder and Board Member has moderated BeyondTraceability Talks Session 1: Regulatory Compliance and Adherence to International Standards.
He led the discussion with seasoned speakers like Diah Suradiredja, Secretariat of the National Dashboard Development, CMEA, and Insan Syafaat, Executive Director of PISAgro. The session uncovered how to navigate global regulations such as EUDR, CSDDD, and CSRD to secure international market access. The panel also explored key policies from the Indonesian government that promoted sustainable practices across the supply chain and delved into actionable solutions through platforms like PISAgro. Attendees gained insights into how technology and partnerships helped producers meet regulatory standards and facilitated smoother market access.
Need expert insights? Connect with our expert today and stay ahead in sustainable supply chain compliance!
Writer: Kumara Anggita, Content Writer
Editor: Bobby Hermawan, Head of Digital Marketing and Daniel Prasetyo, Head of Public Relations and Corporate Communications.
About Writer:
Kumara Anggita, serving as Koltiva's dedicated Content Writer, brings a wealth of experience from her six-year tenure in journalism in the fields of humanities and lifestyle, as well as her role as a writer in the tech industry. Her deep-rooted passion for gender equality and sustainability spurred her to enhance her reporting and storytelling skills through the EmPower Media Bootcamp by UN Women. Now, Kumara utilizes her platform to advocate for sustainable practices and gender equality through her compelling writing.
Resources:
• Antara News. (2024). BRIN calls for agro-industry research to boost economic growth. Antara News. Retrieved from https://en.antaranews.com/news/320639/brin-calls-for-agro-industry-research-to-boost-economic-growth
• World Economic Forum. (2024). Sustainable trade: Opportunity for Indonesia’s growth. World Economic Forum. Retrieved from https://www.weforum.org/stories/2024/11/sustainable-trade-opportunity-indonesia-growth/
• Euractiv. (2024). Indonesia urges EU to rethink deforestation rules impacting farmers. Retrieved from https://www.euractiv.com/section/eet/news/indonesia-urges-eu-to-rethink-deforestation-rules-impacting-farmers/
• World Bank. (2022). Indonesia: Strengthening sustainability and competitiveness in the palm oil sector. Retrieved from https://documents1.worldbank.org/curated/en/099440012142242417/pdf/P1795561cfe1930181bb46180253f7faa21.pdf
• BRIN. (2023). Global Value Chain Impact on Indonesia’s Economy and the Way to Make It More Resilien. Retrieved from https://penerbit.brin.go.id/press/catalog/download/537/537/11648?inline=1
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