I Made Supartha Utama

Perhimpunan Hortikultura Indonesia (PERHORTI)

Outlines

• About Bali

• The influences of tourism on agriculture

• Current agribusiness chains system

• Efforts in development and improvement

• Conclusion

Agriculture land 407,534 hectars; consists of 78,626 hectars paddy wet land and 328 908 hectars non-paddy land (BPS Bali, 2017

Total area of Bali is 5,637 km2 or 0.29% of total area of Indonesia.

http://www.bangkokpost.com/print/320828/

DEVELOPMENT UP TO 2016

• Tourits :12.8 mln (foreigners: 4.9 mln, domestics : 7.9 mln)

• 323 Star Hotels; 1798 Non-stars hotels

• 2223 restaurants

CONSEQUENCES

•Need more land for infrastructures and facilities

•Dramatically increase of land price

•Need more labor •Need more food and water

SIGNIFICANT CHANGES:

• Conversion of agriculture land increases (3,617 Ha / year during 2003-2013)

• Change in Life styles - Consumer habits

• Cost of living increases

OPORTUNITIES :

• Increase market demands • More alternative markets and

value crops • Encourage farmers more

productive

SIGNIFICANT CHANGES:

• Many varieties of cultivated crops

• Hybrid crops dominated • More than one species in

one family farms

PROBLEMS:

• Intensive use of agrochemicals • Loss of Local varieties • Inefficient and ineffective

agribusiness supply chains • Less value oriented

The changes of number of family farmers

Category Land Area (m2)

Number of Family Farmers Growth

2003 2013 Family Number % -1 -2 -3 -4 -5

< 1 000 134 375 72 855 -61 520 -45.78

1 000 - 1 999 53 540 54 783 1 243 2.32

2 000 - 4 999 132 027 133 185 1 158 0.88

5 000 - 9 999 102 007 90 830 -11 177 -10.96

10 000 - 19 999 53 372 43 528 -9 844 -18.44

20 000 - 29 999 11 343 8 846 -2 497 -22.01 >= 30 000 5 730 4 206 -1 524 -26.6

Total 492 394 408 233 -84 161 -17.09 Source: Agricultural Census Bali Province 2013

Change in Agriculture Land 2003-2013 Category land

area (Ha) Number of Family Farmers Growth

Growth of Land Area (Ha) 2003 2013 Number %

-1 -2 -3 -4 -5

<0.1 Ha 134375 72855 -61520 -45.78 (3,076.00)

0.1-<0.2 Ha 53540 54783 1243 2.32 186.45

0.2-<0.5 ha 132027 133185 1158 0.88 405.30

0.5-<1.0 Ha 102007 90830 -11177 -10.96 (8,103.33)

1.0-<2.0 Ha 53 372 43528 -9844 -18.44 (14,766.00)

2.0 - <3.0 Ha 11343 8846 -2497 -22.01 (6,242.50)

>= 3.0 Ha 5730 4206 -1524 -26.6 (4,572.00)

Total 492 394 408 233 -84161 -17.09 (36,168.08)

Source: Agricultural Census Bali Province 2013

Intensive use of agrochemicals

Siaka et al. (2014) reported that from 10 species of vegetables cultivated in Candikuning-Bedugul mostly contained heavy metals of Pb, Cu, Cr, and Zn with the level higher than the permissible-maximum limit regulated by FAO/WHO.

Manuaba (2008 and 2009) found the contamination of organic phosphate pesticides (dimethoate, Chlorpyrifos and profenofos), and carbamate (carbofuran and methomyl) in the lake of Buyan.

Those indicate that the farmers are trying hard to protect their crops and to secure production for family incomes, even though the adopted practices are endangering the environment, biodiversity and consumers, or are in contradiction with sustainable agricultural practices.

Dilemma of the agribusiness system, Consumer's demand and Gov. Regulation

Agribusiness System

Consumer ‘s Trend Global Trends and Gov.

Regulation Local Consumers Institutional

Consumers / Tourists

• Small scale actors

• Long distribution chains

• Less value oriented – short term transaction

• Production problems

• Biodiversity & Environmental Condition

More educated urban consumers • Intrinsic quality

dominant • Low price – high

quality •Convenient

market Less educated consumers • Buying decision

price dominant

• Knowledgeable • Need for Safe and

healthy food • Food safety

certification • Concern on

biodiversity and environment

• ISO 22000 Food Safety Management System in the whole supply chain.

• Growing of Non-Tariff Berries

• RI Laws No. 8 – 2012 for Food …. Related to food safety

• RI Laws No. 41 – 2009 about Protection of Agricultural Land for Sust. Food production

• RI Laws No. 13 – 2010 about Horticulture

• National Certification … PRIMA 1, 2 and 3

TREND IN URBAN CONSUMER DEMANDS

Dept of Industry and Trade, Bali Province (2016)

Intrinsic and extrinsic quality factors

dominant

Intrinsic quality Characteristics

dominant

Affordability and price dominant

Traditional Markets

Modern markets, International Hotels,

restaurants and international catering

services

Developing in some international hotels and

restaurants

• Farmers are mostly small scale, own 0.3-0.5 Ha land per family farmer.

• 75% of production to traditional markets and 25% to value markets

• Less of value orientation • Excessive use of man-made

chemicals for production • Declining biodiversity • Lack of farm labor

Current Agri-Business System: The case of cultivated vegetables in Bedugul area

Value Chain Orientation

No Evaluative criterion

Characteristics of chain activities

Least value orientation Greatest value orientation

1 Balance between price and

value Always price Usually price Usually value Aways value

2 Amount and type of

information shared

No significant information

shared Little information shared

Some information

shared Extensive information shared

3

Time orientation Short term, transaction to

transaction Short term, periodic

Short to medium

term Medium to long term

4 The nature of relationships Adversarial Occasionally cooperative Mostly cooperative Collaborative

5 Interactions between chain

members Transaction based

Mostly transaction

based

More relationship

based

Always relationship

based

6 Dependence in the chain Independence

Occasionally relies on

others Usually relies on others Interdependence

7 Power in the chain The individual has the power

The individual has the

power

Some recognition of the

consumer The consumer has the power

8 Orientation of chain

members Always self maximizing Self first, chain second Chain first, self second Always chain optimizing

Collins (2009)

Value Orientation on the Agribusiness System

Value Orientation of Agribusiness System

• Productions still use man-made industrial pesticides and fertilizers

• Value creations still need to be developed to make more efficient, effective, and environmental-friendly manners.

• Lack of facilitation by the government and related institutions with value creations in value chain approaches

Characteristic losses of distribution channels of Vegetables from Bedugul

• Channels 1-3 are less value oriented

• Channels 4-5 more value oriented

Utama and Kitinoja (2015)

Efforts in Development and Improvement

• A system approach in creating values by establishing integrated value chain systems inclusive for small-scale holders

• The growing concerns of the consumers related to food safety, eco-friendly production and the loss of biodiversity have to take as important considerations.

• Establishing farmers or community seed banks to safe local varieties.

A Concept Value Chains System Inclusive for Small Scale Farmers

Food Quality and Safety Assurance in A Value Chain System as an Important Part of Value Activities.

• Tourism has given impact on the agriculture sector • The current agribusiness chain systems are mostly still

less value oriented. • The agribusiness chains have to be develop in a value

chain system approach • The efforts that have been doing in the value chain

partnership program involving small scale farmers, intermediaries and market have been appreciated by all the chains.