In 2023 we started a direct-trade pilot with 84 coconut farmers in North Sulawesi. Two years later, farm-gate prices are up 34%, deforestation-adjacent land conversion has stopped, and soil organic carbon has measurably risen.
The traditional chain
A coconut in Indonesia typically passes through five intermediaries between the farm and an international buyer: village collector → sub-district trader → district trader → provincial exporter → international broker. Each takes 8-15% margin. The farmer receives roughly 22-30% of the FOB price.
This margin structure creates a perverse incentive. Farmers cannot afford to invest in soil health, agroforestry replanting, or organic certification because the return on those investments is captured by intermediaries, not producers.
What we changed
The Nusawara direct-trade pilot bypasses three of the five intermediaries. Farmer cooperatives receive 62% of the FOB price. In exchange, they commit to:
- Zero conversion of primary forest within a 5-km radius
- Intercropping cocoa or vanilla in coconut groves for biodiversity and additional income
- Composting spent coir back into soil (rather than burning)
- Third-party soil sampling every 12 months
The first year I was skeptical. The second year I re-planted 400 trees and started composting. Now my son wants to take over the farm.
— Pak Rusman, Manado direct-trade cooperative
The data after 24 months
- Farm-gate coconut oil price: +34% (IDR 12,800 → IDR 17,150 per litre)
- Land conversion within program area: 0 hectares (vs regional average 1.8%/year)
- Soil organic carbon on program farms: +0.42 percentage points (measurable via wet oxidation)
- New saplings intercropped: 11,200 (mostly cacao, vanilla, and native shade trees)
- Cooperative membership growth: 84 → 217 households
Why buyers should care
For food, cosmetics, and personal-care buyers navigating the EU Deforestation Regulation (EUDR), direct-trade sourcing is no longer a marketing luxury — it's a compliance strategy. Nusawara's direct-trade coconut oil comes with plot-level GPS coordinates, chain-of-custody documentation, and independent verification that satisfies EUDR requirements as of December 2025.
The price premium (typically 8-12% over commodity-grade coconut oil) is more than offset by the reduced regulatory friction, the marketing story, and — increasingly — retail category access.
