Penjelasan Type Growth Strategies - DOC by gno14230

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									Annexes

1. Position papers
   a.      Shallots, Rofik Sinung Basuki
   b.      Hot pepper, Witono Adiyogo
   c.      Sweet pepper, Nikardi Gunadi
2. Project proposals (final drafts submitted to Indonesian and Dutch authorities for approval)
3. Itinerary Inception field visits and company workshop,
4. Programme inception workshop May 1, 2007 and list of participants
5. Presentations workshop
6. Study tour programme
7. Report of study tour on co innovation in the Netherlands
8. Terms of Reference inception phase: (Summary of agreements on the follow-up of the HORTIN programme)




                                                                                                      I
ANNEX 1. Position papers

a.    Shallots, Rofik Sinung Basuki




                                      II
                        Overview of Shallot Production Systems in Indonesia

                                                 By
                                        Rofik Sinung Basuki
                           Indonesian Vegetable Research Institute (IVEGRI)

Introduction

          The competitiveness of Indonesian’s shallot decreased in the last decade. Import of shallot
increased sharply, export was relatively stable and the price of Indonesian’s shallot became more and
more expensive in global market.
          Import of shallot increased from about 22000 tons (9.1 million US$) in 1993 to 42000 tons
(12.3 million US$) in 2003; exports increased slightly from about 5300 tons (1.5 million US$) in
1993, to 5400 tons (2.4 million US$) in 2003; and the price of Indonesian’s shallot was US$ 123
cheaper than that of imported shallot, but in 2003 it was US$ 154 per ton higher than that imported
shallot (Table1).

Table 1. Export and import of shallot in Indonesia, 1993-2003.
                    Export (E)                           Import (I)                 Price
          Volume      Value        Price     Volume        Value       Price     difference
 Year                                                                               (E-I)
           (ton)     (US$)      (US$/ton)      (ton)       (US$)     (US$/ton)    (US$/ton)
1993     5336.5 1541403 288.8               22252.9 9154800         411.4      - 122.6
1998     176.3     47306       268.3        43016.8 11499515        267.3      + 1.0
2003     5402.1 2421134 448.2               42007.9 12369945        294.5      + 153.7
Source: Dirjen Bin.Prod.Hortikultura (2004)

          The decrease of the competitiveness of Indonesian’s shallot could happen due to the
bottlenecks along its supply chains- from production, marketing to distribution – had not been solved
effectively and efficiently. This review intended to identify critical bottlenecks along the shallot
supply chains to enable researchers to design intervention, particularly technological intervention, in
order to increase the competitiveness of Indonesian’s shallot in global market, included in domestic
market.


Shallot production area


          In Indonesia, shallots were produced mainly in Java (79%) and Nusa Tenggara islands (12%).
From 33 provinces, Central and East Java were the main production centers, followed by West Java
and NTB provinces (Table 2) (Diagram 1).




                                                                                                    III
Table 2. Production of shallot in Indonesia, 2006.
                                                              SHALLOT
  No        PROVINCES             Harvested                  Yield            Production
                                    area
                                     Ha               %    (Ton/Ha)    %         Ton        %
   1    Nanggroe Aceh D.               1018           1.14      7.49 82.40         7621     0.94
   2    Sum. Utara                     1081           1.21      8.02 88.23         8666     1.07
   3    Sum. Barat                     2206           2.48      8.46 93.07        18664     2.31
   4    Riau                              0           0.00         0   0.00            0    0.00
   5    Jambi                           218           0.24      7.44 81.85         1621     0.20
   6    Sum. Selatan                      6           0.01       7.5 82.51            45    0.01
   7    Bengkulu                         63           0.07      3.92 43.12           247    0.03
   8    Lampung                          30           0.03       7.2 79.21           216    0.03
   9    Bangka Belitung                   0           0.00         0   0.00            0    0.00
  10    Kepulauan Riau                    0           0.00         0   0.00            0    0.00
        SUMATERA                       4622           5.19      8.02 88.23        37080     4.58
  11    DKI Jakarta                       0           0.00         0   0.00            0    0.00
  12    Jabar                         11501          12.92      9.82 108.03      112964    13.96
  13    Jateng                        27935          31.39      9.06 99.67       253140    31.29
  14    D.I. Yogya                     2494           2.80      9.45 103.96       23573     2.91
  15    Jatim                         25002          28.09    10.15 111.66       253758    31.37
  16    Banten                           34           0.04      4.68 51.49           159    0.02
        JAWA                          66966          75.24      9.61 105.72      643595    79.56
  17    Bali                           1190           1.34      8.33 91.64         9915     1.23
  18    N.T.B.                         9938          11.17      8.62 94.83        85682    10.59
  19    N.T.T.                         1035           1.16      4.25 46.75         4396     0.54
        BALI & N.T.                   12163          13.67      8.22 90.43        99993    12.36
  20    Kal. Barat                        1           0.00       4.8 52.81             5    0.00
  21    Kal. Tengah                       0           0.00         0   0.00            0    0.00
  22    Kal. Selatan                      0           0.00         0   0.00            0    0.00
  23    Kal. Timur                       34           0.04      4.78 52.59           163    0.02
        KALIMANTAN                       35           0.04      4.78 52.59           167    0.02
  24    Sul. Utara                      473           0.53      7.62 83.83         3604     0.45
  25    Sul. Tengah                    1221           1.37      7.09 78.00         8659     1.07
  26    Sul. Selatan                   2457           2.76      4.92 54.13        12088     1.49
  27    Sul. Tenggara                    82           0.09      4.24 46.64           347    0.04
  28    Gorontalo                       152           0.17      4.77 52.48           725    0.09
  29    Sul. Barat                      206           0.23      6.48 71.29         1334     0.16
        SULAWESI                       4591           5.16      5.83 64.14        26757     3.31
  30    Maluku                          361           0.41      1.05 11.55           378    0.05
  31    Maluku Utara                    113           0.13      1.92 21.12           217    0.03
  32    Papua                           102           0.11      3.10 34.10           316    0.04
  33    Irian Jaya Barat                 50           0.06      8.10 89.11           405    0.05
        MALUKU &
        PAPUA                          626   0.70              2.10 23.10          1316   0.16
        LUAR JAWA                    22037 24.76               7.50 82.51        165314 20.44
        INDONESIA                    89003 100.00              9.09 100.00       808908 100.00
Source: Direktorat Tanaman Sayuran (2006)




                                                                                                   IV
Diagram 1. Contribution of shallot production (%) by province

                            Shallot Production (% ) by provinces
                                         year 2006



                              10%            14%

                      11%
                                                                             West Java
                                                                             Central Java
                                                                             Yogyakarta
                                                                             East Java
                                                   31%                       N.T.B.
                                                                             28 other provinces
                        31%

                                        3%




Production of shallot


        With average growth of 6% per year, production of shallot increased from about 399 thousand
tons in 1989 to 809 thousand tons in 2006. The production jumped from 558 thousand tons in 1998 to
938 thousand tons in 1999 mainly due to increase of area. However, in general the increase of shallot
production was contributed by both the increase of area (average growth 3.3% per year) and
productivity (average growth 2.6% per year) (Table 3) (Graph 1).


Seasonal production of shallot


        Production of shallot in Indonesia followed a seasonal pattern. In the main production area of
Java and NTB, production of shallot was low from January to July; and was high in August to
September (Graph 2 and Table 4). At districts level, such as in two important districts shallot area of
Cirebon and Nganjuk, similar seasonal production pattern took place. Low production of shallot was
from January to June, and high shallot production was from July to September (Graph 3 and Table 5).




                                                                                                     V
Table 3. Production, harvested area and yield of shallot in Indonesia, 1989-2003.
 Year                      Production       HarvestedGrowthGrowth      Yield                                                    Growth
                                            area
                 (ton)          %           (ha)           %           (t/ha)                                                  %
 1989            399488         0           60399          0           6. 61                                                   0
 1990            495183         24          70081          16          7.07                                                    7
 1991            509013         3           70989          1           7.17                                                    1
 1992            528311         4           68913          -3          7.67                                                    7
 1993            564390         7           73977          7           7.63                                                    0
 1994            636864         11          84630          14          7.53                                                    1
 1995            592548         -7          77210          -9          7.67                                                    2
 1996            768567         30          96292          25          7.98                                                    4
 1997            605736         -21         88540          -8          6.84                                                    -14
 1998            558331         -8          78475          -11         7.12                                                    4
 1999            938293         68          104289         33          9.00                                                    26
 2000            772818         -18         84038          -19         9.20                                                    2
 2001            861150         11          82147          -2          10.48                                                   14
 2002            766572         -11         79867          -3          9.60                                                    -8
 2003            762795         0           88029          10          8.67                                                    -10
 2006            808908         6           89003          1           9.09                                                    5
  Av. growth              6.2 %                       3.3%                                                                 2.6%
Sources: Dirjen Tan. Pangan dan Hort. (1999); Dirjen Bin.Prod.Hort. (2004);
         Direk. Tanaman Sayuran (2007).

Graph 1. Production, harvested area and yield of shallot, 1989 - 2006

                     Production, area and yield of shallot (1989-2006)




                                                                                                                           Production (t)
   Value




                                                                                                                           Area (ha)
                                                                                                                           Yield (t/ha)
           1989
                  1990
                         1991
                                1992
                                       1993
                                              1994
                                                     1995
                                                            1996
                                                                   1997
                                                                          1998
                                                                                 1999
                                                                                        2000
                                                                                               2001
                                                                                                      2002
                                                                                                             2003
                                                                                                                    2006




                                                                                                                                            VI
Graph 2. Monthly shallot production in Indonesia, year 2004.

                                       Monthly shallot production (ton)
                                                 year 2004

          160000

          140000

          120000                                                                               SUMATERA
                                                                                               JAWA
          100000
                                                                                               BALI & N.T.
   Tons




           80000                                                                               KALIMANTAN
                                                                                               SULAWESI
           60000
                                                                                               MALUKU & IRJA
           40000                                                                               INDONESIA
           20000

                 0
                     Jan   Feb   Mar April May June July   Aug Sept Oct       Nov   Dec
                                                   Month




Graph 3. Monthly shallot production in Cirebon and Nganjuk districts, 2003-2004.

                                             Monthly Production (ton)
                                               Cirebon & Nganjuk
                                                   2003-2004
       20000


       15000
 Ton




       10000
                                                                                                     Average

          5000


             0
                     1      2      3     4     5      6     7    8        9         10    11    12
                                                       Month




                                                                                                               VII
Table 4. Monthly shallot production in Indonesia, year 2004

                                                                         Monthly shallot production (tons)

                            Jan        Feb         Mar           April         May         June         July        Aug         Sept     Oct         Nov       Dec
 SUMATERA              2381        2152       2414           1908          3681        2094         2056        3516        2781        2255     2155      2485
 JAWA                  52063       40013      25418          47402         51892       56726        61223       88944       107443      49971    25005     39045
 BALI & N.T.           3859        4908       4770           3555          10911       19005        5915        46697       23190       7605     3486      1558
 KALIMANTAN            26          0          12             0             0           0            0           0           0           0        0         0
 SULAWESI              1436        549        1745           4976          1161        697          1320        831         3199        4199     726       468
 MALUKU &
 IRJA                  164         30         226            135           36          21           13          25          396         83       196       11
 INDONESIA             59929     47651    34585              57976         67680       78542        70527       140013      137009      64111    31567     43567
Source: Direktorat Tanaman Sayuran (2007)
Table 5. Monthly shallot production in Indonesia, year 2003 - 2005

                                                                         Monthly shallot production (tons)

                       Jan        Feb        Mar         April       May             June         July         Aug         Sept         Oct          Nov       Dec
 Nganjuk district
 2003                1042.8 947.4       3875.1 1664.9               2083.1        1344.5      6530.5       23014.4        12887.5      856.5     8131.5    999
 2004                885       1988.9   1654.2 1314                 7901          3494.4      7909.9       33414.2        9058.1       9600.7    2557.6    363
 2005                334.8     8185.9   1756.5 977.5                1550          2296.1      20539.8      25608.2        999.9        13584.6   1466      6072
 Cirebon district
 2004                4000.6 4166.6      2669.8 825.2                700.2         2552.6      4081.7       3180.8         4699.7       4835.6    235.4     196.2
 2005                6064.2 3961        862.5    663.7              244.8         2890.8      4124         4037.8         4150.4       3076.9
 Average             2465.5 3850.0      2163.6 1089.1               2495.8        2515.7      8637.2       17851.1        6359.1       6390.9    3097.6    1907.6
Source: Dinas Pertanian Cirebon and Nganjuk (2006)




                                                                                                                                                                     8
Soil type and altitude of shallot area


        In Java, most of shallot production area was in lowland (< 200 m.a.s.l), and only a few in
medium (500 m.a.s.l – 1000 m.a.s.l.) and highland (> 1000 m.a.sl.) (Nurmalinda and Suwandi, 1995)
(Basuki et al. 2003).
        Agroclimatic characteristics of the main production area in lowland were as follow: :
       Low Altitude ( < 200m)
       Alluvial and Regosol soil types.
       Irigation is available
       Classification of climate according to Oldeman dan Irsal:
                C3 = 5 – 6 wet months and 4 – 6 dry months, or
                D3 = 3 – 4 wet months and 4 – 6 dry months, or
                E3 = 3 wet months and 4 – 6 dry months.


Crop rotation and intercropping


        In lowland area, as in Brebes, different crop rotation practiced by farmers. However, the
general crop rotations were that shallot was planted after paddy or sugar cane. Intercropping shallot
with red chili was also common. Paddy was planted from November to March, followed by shallot
from April to October.

Characteristics of farmers


        Survey data from Brebes showed that 80% of total respondents was a small farmer (farm size <
0.5 ha); about 13% of total respondents was medium farmers (0.50 ha - < 1.00 ha); and about 7% was big
farmers (1.00 ha – 4 ha) (Table 6). Although the percentage of big farmers was small, their land-
ownership was about 36% of total shallot area, compared to 80% of small farmers with land-ownership
was about 46% of the total shallot area.




                                                                                                     I
Table 6. Farm size, number of farmers and their contribution to the total area of shallot in Brebes, Juli -
          Oktober 2002.

                                                             Brebes - Jawa Tengah
Farmer category     Farm size                   Farmer respondent             Luas areal usahatani

                                             Jumlah           %           Luas (HA)      Pangsa area
                                                                                            (%)
Petani gurem        < 0. 2 ha                        11             37           1.750               13
Petani kecil        0.2 ha - < 0.50 ha               13             43           4.505               33
Petani Sedang       0.50 ha - < 1.00 ha               4             13           2.450               18
Petani besar        1.00 ha – 4 ha                    2              7           5.000               36
TOTAL                                                30             100       13.705                 100




Variety of shallot grown by farmers


        Farmers grew various varieties of shallot. Neglected that the varieties may had the same
genetics, at least 17 varieties mentioned by farmers were (1) Bangkok Warso, (2) Bangkok Madi, (3)
Timur, (4) Ilokos, (5) Pilipin, (6) Ampenen, (7) Kuning, (8) Kuning Bima, (9) Kuning Engkel, (10)
Kuning Tablet, (11) Kuning Sidapurna, (12) Kuning Gombong, (13) Kuning Rimpeg (14) Bima
Brebes (15) Bima Juna (16) Bima Curut, (17) Kuning Berawa, (18) Sumenep. Among them Ilokos and
Pilipin were imported varieties (Basuki et al.1997; Soetiarso, 1999 and Basuki et al., 2005).
        Farmers chose a certain shallot variety to grow based on various reasons. Survey conducted in
1997 (Basuki et al., 1997) showed that most farmers grew local variety of shallot namely Kuning
Rimpeg (Table 7). The reasons of farmers chose Kuning Rimpeg were as follow:
-   Big bulbs, round shape and red bulb color preferred by consumers.
-   the selling price was more expensive than that of other local varieties
-   could be stored from 3 to 7 months
-   easy to stored and to be used as seed
-   if the plant attacked by diseases, the product still could be used as seed
-   suitable for dry and wet planting seasons
-   earliness (50-55 days)




                                                                                                           II
Table 7. Variety of shallot planted in Larangan-Brebes, 1997.
                                     Dry season (n= 51)                 Wet season (n= 50)
                                               %                                   %
    1. Kuning Rimpeg           32               63               26                  52

    2. Kuning Berawa           9                18               4                   8

    3. Kuning Sidapurna        0                0                1                   2

    4. Kuning Tablet           0                0                1                   2

    5. Kuning Bima             1                2                1                   2

    6. Bima                    2                4                3                   6

    7. Bangkok                 2                4                5                   10

    8. Bangkok Warso           1                2                0                   0

    9. Kuning Bangkok          0                0                2                   4

    10. Pilipin                4                8                3                   6

    11. Engkel                 0                0                1                   2

 12. Timor                  0                   0                1                   2
Source: Basuki et al. (1997)

           The survey also showed that despite the yield of imported variety, Philippine, was higher than
those of local varieties, only a few farmers (8%) grew imported variety because the variety weaknesses as
follow:
-      long growing period ( 70 days)
-      have to buy new seed every planting (could not stored as seed)
-      Price was expensive.
-      Only suitable for dry planting season, in wet season easily attacked by diseases
-      Can be stored only 2-3 months, if longer than that would be rotten
           Further survey conducted in 2002 showed that most farmers (87%) in Larangan-Brebes grew
imported variety. The reasons were: (1) good quality of product, (2) high yield, (3) high selling price,
and (4) suitable for dry season (Table 8).




                                                                                                      III
Table 8. Varieties of shallot planted and its reason according to farmers, Larangan-Brebes, July 2002.
                                                        Variety planted and its reasons
                                                                     (n=30)
                                                Wet season 2002               Dry season 2001
                                             (planted in April/May)      (planted in July -August
                                           Variety      Reasons         Variety     Reasons
 Varieties planted:
 1. Engkel                                 24 (80%)                     2 (7%)
 2. Tablet                                 3 (10%)                      1 (7%)
 3. Bima                                   2 (7%)                       1 (7%)
 4. Kuning rimpeg                          1 (3%)                       0 (0%)
 5. Pilipin (var. import)                  0                            26 (87%)
 Reasons to chose the varieties:
 1. Can be used as seed                                 28 (93%)                    2 (7%)
 2. Can be stored from 3-4 months                       28 (93%)                    0
 3. Big bulbs, round and red                            17 (57%)                    26 (87%)
 4. High selling price                                  8 (27%)                     13 (43%)
 5. The product can be used as seed                     7 (23%)                     0
   although attacked by diseases at 40
   day after planting.
 6. Suitable for dry and wet season                     28 (93%)                    3 (10%)
 7. High yield                                          3 (10%)                     14 (47%)
 8. Tolerant to diseases                                20 (67%)                    2 (7%)
 9. Suitable for dry season                             0 0                         15 (50%)



Farmers’ preferences to characteristics of shallot variety


        Characteristics of shallot variety preferred by farmers in Brebes were early mature, high
yielding (10 -13 tons per ha), 8-10 bulbs per plant, round shape bulbs, big bulbs (2.5 cm - 3 cm
diameter), red skin color and strong aroma (Table 8).




                                                                                                     IV
Table 8. Characteristics of shallot variety preferred by farmers in Kemukten and Slatri, Brebes, 2005.
           Characteristics                      Kemukten                       Slatri
                                                  (n=28)                      (n=32)
                                           Frequency         %        Frequency           %
 Bulb shape:
 - round                                 13               46        16                50
 - oval                                  3                11        4                 12
 - other                                 0                0         0                 0
 Bulb size:
 - Diameter + 3 cm                       16               57        23                72
 - Diameter + 2,5 cm                     8                29        9                 28
 - Other                                 4                14        0                 0
 Bulb skin color:
 - Red                                   4                14        12                38
 - Old red                               22               79        17                53
 - Other                                 2                7         3                 9
 Bulb aroma:
 - Strong                                18               64        18                56
 - Medium                                9                32        14                44
 - No aroma                              1                4         0                 0
 Number of bulb per plant:
 - 5-7 bulbs                             10               36        17                53
 - 8-10 bulbs                            17               61        14                44
 - More than 10 bulbs                    1                4         1                 3
 Yieldper ha:
 - 10 – 13 tons                          18               64        25                78
 - 14 – 16 tons                          9                32        3                 9
 - 20 ton                                1                4         4                 12
Source: Basuki (2005)

Research on shallot variety

        In 2005-2006 agronomics experiments and farmers participatory research were conducted to
compare yield potential and to identify farmers preferences to ten local varieties compared to two
imported varieties.
        Results of agronomics experiment showed that the yield and percentages of big bulbs of
imported variety of Ilokos were higher than those of all local varieties (Table 9). Despite of that, most
farmers preferred to local variety of Bima Curut than that of Ilokos (Table 10). Farmers mentioned
that Bima Curut had a better quality than that of Ilokos in terms of red color of bulbs and stronger
aroma which made it easier to sell to the market. Besides that, farmers believed that by increasing
plant population - closer plant spacing - the yield of Bima Curut would increase. Farmers neglected
that increasing plant population will also increasing seed requirement, because most of them usually
produced their own seed.




                                                                                                         V
Table 9. Yield and percentages of big bulbs of shallot from local (lowland) and imported varieties in
           Brebes, October 2005.
                                                         Brebes District
                                         Kemukten Village                Larangan Village
             Varieties              Fresh Yield      Big bulbs      Fresh Yield    Big bulbs
                                       (t/ha)           (%)            (t/ha)         (%)
1. Bima Juna                       26.4 ef         31.6 c          20.2 cd        57.5 ad
2. Bima Curut                      26.8 ef         60.7 b          19.6 d         62.7 ab
3. Kuning Sidapurna                31.1 bd         35.3 c          22.2 bc        47.3 bd
4. Kuning Engkel                   23.4 f          21.8 c          21.0 ed        58.3 ac
5. Kuning Tablet                   32.4 ac         26.6 c          22.2 bc        50.3 ad
6. Bankok Warso                    25.3 ef         37.3 c          17.0 e         34.6 d
7. Tanduyung (imported variety) 35.2 a             39.5 c          24.6 a         41.7 bd
8. Ilokos (imported variety)       34.6 ab         85.7 a          23.6 ab        72.6 a
9. Timor                           27.0 ef         29.6 c          20.5 cd        54.3 ad
10. Bethok                         25.9 ef         34.2 c          20.5 cd        35.8 cd
11. Bauji                          28.0 de         23.4 c          21.0 cd        52.3 ad
12. Kuning Rimpeg                  28.8 de         34.5 c          21.2 cd        60.7 ab

Table 10. Farmers preferences to local and imported varieties of shallot in Brebes, 2005.
                                                              Farmers’ preferences
                    Varieties                       Kemukten (n=32)         Slatri (n=28)
                                                      Total score             Total score
 1. Bima Juna                                             21                       6
 2. Bima Curut                                            76                      73
 3. Kuning Sidapurna                                       9                      16
 4. Kuning Engkel                                         21                       1
 5. Kuning Tablet                                          9                      15
 6. Bankok Warso                                           0                       0
 7. Tanduyung (imported variety)                          23                      13
 8. Ilokos (imported variety)                             24                      32
 9. Timor                                                  0                       6
 10. Bethok                                                5                       4
 11. Bauji                                                 0                       0
 12. Kuning Rimpeg                                         4                       2




True Shallot Seed (TSS)


        The use of TSS – a botanical seed - as planting material is a radical concept of growing shallot
in Indonesia. The use of TSS may increase the competitiveness of Indonesian’s shallot in global
market. TSS have several advantages over conventional bulb seed those are reduction of seed cost,
TSS free from virus and other bulb- transmitted – diseases, produce healthy crops (Permadi, 1993;
Putrasamedja, 1994) and flexible to adapt a given crop rotation.
        In Indonesia (IVEGRI) research on shallot started in early 1990. However, the research still
limited to study on TSS production (open pollinated) from local shallot variety namely Bima (Sumarni


                                                                                                     VI
and Soetiarso, 1998; Sumarni and Sumiati, 2001) and bulb-set production (Sumarni, Rosliani and
Suwandi, 2001).
        Recently, a private sector promote the use of a commercial TSS progeny namely Tuk-Tuk.
However, the adoption of Tuk-Tuk was limited. Many farmers considered that the use of TSS was
impractical, labor intensive in the growing seedlings in nursery and transplanting the seedling into the
field, and many seedling dead after transplanting. Most importantly many farmers doubted that
growing shallot from TSS was more profitable than that from conventional bulb seed.



Pest and diseases


In the field
        Survey in 2002 showed that in dry season the main pest in Brebes, Cirebon and Nganjuk were
S. exigua and Liriomyza sp.; while in wet season the main diseases were Alternaria sp, Colletotrichum
sp. and Fusarium sp (Table11).
        It seemed, farmers in Brebes and Cirebon succeeded to control Liriomyza sp, because in year
2005 farmers in those locations perceived that Liriomyza sp no longer important pest (Table 12).




Tablel 11. Main pest and diseases of shallot according to farmers in Brebes, Cirebon and Nganjuk,
           2002.

       Pest and diseases                    Dry season                        Wet season
  (local and scientific names)   Brebes       Cirebo     Nganju    Brebes     Cirebon      Nganjuk
                                 (n=30)       n          k         (n=30)     (n=20)       (n= 10)
                                              (n=20)     (n= 10)
 Ulat bawang                     66 (II)      47 (I)     18 (I)    2          7            2
  (Spodopthera exigua)
 Kemreki                         13           9 (III)
 Thrips (Thrips tabaci)          3            3          2         1
 Orong- orong                    16 (III)     3          1
 Lalat (Liriomyza sinensis)      77 (I)       40 (II)    8 (II)    17         16           3
 Krapak/otomatis/tipes                        8                    34 (II)    18(II)
 (Colletotrichum
 gloeosporiodes Penz.,)
 Tol (Alternaria sp)             1            1          4 (III)   42 (I)     23 (I)       15 (I)
 Moler (Fusarium sp)             1            2          1         21 (III)   16 (III)     10 (II)
 Rotten root                                             1                    9            4



                                                                                                     VII
Table 12. The main pest of shallot according to farmers in Brebes (Brb) and Cirebon (Cir), 2005.
                              The most           The most           The most            Main pest
            Pest          frequent attacks    damaging the         difficult to
                              the crop             crops             control            (skores)
                                 (%)                (%)                (%)
                             Brb       Cir      Brb       Cir      Brb       Cir     Brb        Cir
                            n=50     n=50      n=50     n=50      n=50      n=50    n=50      n=50
 1   S. exigua            48         54      20         44      16         42      42         70
 2   S. mauritia          44         38      62         40      52         40      79         59
 3   S. litura            4          0       2          0       2          0       4          0
 4   Orong-orong          0          6       8          4       4          2       6          6
     (local name)
 5 Liriomyza sp.        4           2        8         10       14        6        13         9
 6 No answer                        0        0         2        12        10       6          6
Sources: Basuki (2005).

In the storage


        In dry season storage losses was about 7%, but in wet season storage losses increased
significantly up to 58% depended on the variety of the shallot (Table 13). In wet season, losses due to
diseases infected bulbs (21%-49%) were higher than those of losses due to insects (1%-16%) and
physiological losses (1%-6%) (Table 14).

        It was identified that the main diseases in the storage were Aspergillus sp. and , dan Fusarium
sp.; the main pest was Epistia sp; and physilogical losses were dry rot (keropos), sprouts and rooted
bulbs (Mussadad et al., 2006).

Table 13. Percentages of shallot losses in the storage after 2 months, Brebes, 2006.

                      Treatments                                         Total losses (%)

 Type of storage (A) :

      1 Smoked by fired-woods                                                  44.53
      2 Control                                                                50.44

 Varieties (B) :

      1. Bima juna
                                                                               35.84
      2. Bima curut
                                                                               47.69
      3. Kuning sidapurna
                                                                               49.06
      4. Kuning engkel
                                                                               45.76
      5. Kuning tablet
                                                                               47.04



                                                                                                      VIII
      6. Bangkok warso
                                                                              51.25
      7. Tanduyung
                                                                              46.53
      8. Ilokos
                                                                              57.32
      9. Timor
                                                                              58.03
      10. Betok
                                                                              44.35
      11. Bauji
                                                                              39.42
      12. Kuning rimpeg                                                       47.62




Tabel 14. Percentage of physiological, insects and diseases losses of shallot in the storage after two
          months, Brebes, 2006.

              Treatments                                          Losses (%)

                                            Physiological           Insects             Diseases

 Type of storage (A) :

      1 Smoked by fired-woods
                                                 1.42                 4.81                38.30
      2 Control
                                                 5.88                10.97                33.60
 Varieties (B) :

      1. Bima juna
                                                 1.59                13.24                21.01
      2. Bima curut
                                                 3.01                16.36                28.31
      3. Kuning sidapurna
                                                 3.22                 6.45                39.39
      4. Kuning engkel
                                                 3.68                 8.95                33.12
      5. Kuning tablet
                                                 5.82                 6.73                34.48
      6. Bangkok warso
                                                 5.83                 7.33                38.08
      7. Tanduyung
                                                 4.29                12.45                29.78
      8. Ilokos
                                                 3.00                 5.40                48.92
      9. Timor
                                                 1.47                16.49                40.06
      10. Betok
                                                 3.30                 7.80                33.25
      11. Bauji
                                                 2.97                 0.66                35.79
      12. Kuning rimpeg
                                                 5.74                12.25                29.62




                                                                                                         IX
Farmers control on pest and diseases

          To control pest and diseases in the field most farmers followed basic principles as follows:
-     In dry season focus to control the main pest, i.e. S. exigua. However, potential damages of crop
      attacked by other secondary pest even by diseases should be taken into account.
-     Insecticides more effective to contact or to control “baby larva” when they were still on the leaf
      surface not “adult larva” which already hide in the shallot leaf.
-     Should be aware to pest and diseases from neighbor plots since they might attack owned farm.
-     Several pest and diseases may present and attacked simultaneously.
-     Multiplication of S.exigua was very rapid, preventive control measure was safe.
-     Very often recommended dosages of pesticides were not effective, a higher dosage of pesticides
      was needed.
          Most farmers (82%) started to sprayed pesticides 10 -20 days after planting, 2-3 days interval
(85%), and stop spraying about 50-60 days after planting (83%) (Table 15). Most farmers using
pesticides mixtures of 2-3 pesticides and 4-5 pesticides (Table 16).

Tabel 15. Pesticides spraying in dry season, Brebes, 1997
                                                             Number of farmers (n=51)
    Spraying schedule                                                      %
    The first sprayed :

                    after planting (dap)         6                         12
    11 – 15 dap                                  25                        49
    16 – 20 dap                                  17                        33
    21 – 25 dap                                  3                         6
    The last sprayed:

    41 – 45   dap                                4                         8
    46 – 50   dap                                10                        20
    51 – 55   dap                                24                        47
    56 – 60   dap                                13                        25
    Spraying interval:

 2 days                                          7                         14
 3 days                                          24                        47
 2-3 days                                        12                        24
 3-4 days                                        3                         6
 2-4 days                                        2                         4
 3-5 days                                        3                         6
Source: Basuki et al. (1997)




                                                                                                         X
Table 16. Pesticides mixtures used by farmers in Brebes, dry season 1997 and 2002.
                                         2002 (n=24)*)              1997 (n=50)**)
  Pesticides Mixtures                                    %                           %
   Mixed of two pesticides :             2               8          9                18
   *1I+1F                                    1                          5
   *2I                                       1                           4
   Mixed of three pesticides :           9               38         19               38
   *1I+2F                                    3                        3
   *2I+1F                                    5                        14
   *3I                                       1                        2
   Mixed of four pesticides:             5               21         16               32
   *3I+1F                                    1                        4
   *2I+2F                                    3                        8
   *1I+3F                                    1                        4
  Mixed of five pesticides :             6               25         5                10
  *3 I + 2 F                                 4                          5
  *2I+3F                                     1
  *4I+1F                                     1
   Mixed of six pesticides :            2                8          1                2
   *3I+3F                                   1                           1
 Sources: *) Basuki et al. (2002);
         **) Basuki et al. (1997)
 Notes: I = insecticides ; F = fungicides .

Research on pests and diseases

        Most of research on pests and diseases were conducted to control Spodopthera exigua, Fusarium
oxysporum f.sp.cepae., Colletotrichum gloeosporiodes Penz. And Alternaria porr. Research covering
aspects of identifying agroclimatics condition those favored by diseases to develop, identifying
appropriate planting timing to reduce diseases incidences, identifying effective bio and chemical
pesticides to control main pest and diseases, identifying the effect of pesticides on the resurgence of
Spodoptera exigua Hbn. (Suryaningsih and Suhardi, 1990; Suhardi and Suryaningsih, 1990; Suhardi,
1996; Moekasan, 1998; Sastrosiswojo and Rubiati, 2001). Recently, research on the use of light-
trapping to reduce population of Spodopthera exigua had also been conducted. Much other research on
pest and diseases has not been reviewed yet.


Cost of production

        In shallot production, using local or imported seed varieties, the highest cost components was
labor cost (32%-46%) followed by costs of seed (22%-37%). Costs of pesticides (5%-8%) might be lower



                                                                                                    XI
than that of fertilizer costs (10%) or costs of pesticides might be higher (15% - 17%) than that of fertilizer
costs (10%-11%). Cost of production of one kg shallot using imported seed variety was cheaper than that
of using local seed variety mainly because the yield of imported seed variety was higher than that of local
seed variety. Apparently, shallot production using imported seed variety was more competitive and
profitable than that of using local seed variety (Table 17).


Table 17. Cost and benefit of shallot production using local and imported variety seed in Cirebon and
          Brebes, 2002.
                                    Cirebon                                Brebes

                       Local variety        Imported             Local variety        Imported variety
                       (Timur)              variety              (Kuning engkel       (Philippine)
                                            (Philippine)
                       Rp            %      Rp          %        Rp           %       Rp           %
 Costs
 Seed                  6366730       31     7896860      37      4780770      22      8380600      34
 Fertilizer            1955310       10     2058420      10      2446370      11      2451970      10
 Pesticides            1580490       8      1056370      5       3357530      15      4250340      17
 Labor                 9304710       46     9209180      43      9523500      44      7770480      32

 Land rent             1043750       5      1212860      6       1627800      7       1532740      6

 Total costs           20250990 100         21433690 100         21735970 100         24386130 100
 Returns
 Production (kg):      7848          100    10792        100     6741         100     9428         100
 - Sold (kg)           6243          80     10792        100     6741         100     9428         100
 - Kept as seed        1605          20     0            0       0            0       0            0
 (kg)
 Selling price         2678                 2500                 2826                 2847
 Revenue               21016940             26980000             19050070             26841516
 Cost per unit         2580                 1986                 3224                 2587
 (Rp/kg)
 Profit                234050               5546310              -2685900             2455386



Shallot trades


        During periode 1993-2003, Indonesia was a net importer of shallot (import volume > export
volume). With average growth rate of 8% per year, import of shallot increase from 22 thousand tons in
1993 to 42 thousand tons in 2003. Meanwhile, export of shallot increased slightly, from 5.3 thousand
ton in 1993 to 5.4 thousand ton in 2003 (Table 18). Considering the trend of import of shallot
increased it was predicted that in 2010 import of shallot will up to 78618.6 ton (US$ 23071042).




                                                                                                          XII
Tablel 18. Volume (ton) and value (US$) of export – import of shallot, 1993-2003.
                         Volume (ton)                               Nilai (US$)
  Tahun          Ekspor       Impor           Net           Ekspor        Impor              Net
  1993             5336.5      22252.9       -16916.4       1541403       9154800           -7613397
  1994             6843.3      15213.3        -8370.0       1775171       5963869           -4188698
  1995             4158.5      31616.2       -27457.7       1071889      11662148          -10590259
  1996             7171.0      42057.4       -34886.4       1620627      15646850          -14026223
  1997             3189.0      43083.6       -39894.6        778008      14380674          -13602666
  1998              176.3      43016.8       -42840.5          47306     11499515          -11452209
  1999             8602.7      35775.3      -35689.03       2770566       9067750           -6297184
  2000             6753.3      56710.8       -49957.5       1835233      12913800          -11078567
  2001             5991.5      47946.3       -41954.8       1670775      12475026          -10804251
  2002             6816.2      32928.8       -26112.6       2188967       9069031           -6880064
  2003             5402.1      42007.9       -36605.8       2421134      12369945          -10180978

Supply of imported shallot

       800

       700

       600

       500

       400                                                              Local shallot
                                                                        Imported shallot
       300

       200

       100

          0
              Jan Peb Mar Apr Mei Jun Jul Agu Sep Okt Nop Des


Diagram 4. Volume of local and imported shallot in

        Diagram 4 showed monthly supply of local and imported shallot in Central Market of Kramat
Jati (Pasar Induk Kramat Jati) in Jakarta. Supply of imported shallot was from January to May, and the
peak supply was in March-April. This figures showed that imported shallot entered Indonesian market
during the supply of local shallot was low as it was off-season of shallot.


Competitiveness of local shallot


        Since 1998, the competitiveness of local shallot decreased compared to imported shallot. The
price of local shallot became more and more expensive than imported shallot. In 2003, the price of
local shallot for export was US$ 448 per ton or about Rp. 4 034 per kg (1 US$ = Rp. 9000),
meanwhile the price of imported shallot was US$ 295 per ton or Rp. 2 651 per kg (Tabel 19). If the
price gap between local and imported shallot became bigger and bigger, in the coming years supply of
imported shallot would still increase.



                                                                                                       XIII
Table 19. Export and import price of shallot in Indonesia, 1993 – 2003
                     Export = E                           Import = I              Price gap
Year                                                                                (E-I)
             Ton         US$       US$/ton       Ton         US$      US$/ton
 1993        5336.5     1541403       288.8 22252.9         9154800      411.4          -122.6
 1994        6843.3     1775171       259.4 15213.3         5963869      392.0          -132.6
 1995        4158.5     1071889       257.8 31616.2 11662148             368.9          -111.1
 1996        7171.0     1620627       226.0 42057.4 15646850             372.0          -146.0
 1997        3189.0      778008       244.0 43083.6 14380674             333.8           -89.8
 1998         176.3        47306      268.3 43016.8 11499515             267.3             1.0
 1999        8602.7     2770566       322.1 35775.3         9067750      253.5            68.6
 2000        6753.3     1835233       271.8 56710.8 12913800             227.7            44.0
 2001        5991.5     1670775       278.9 47946.3 12475026             260.2            18.7
 2002        6816.2     2188967       321.1 32928.8         9069031      275.4            45.7
 2003        5402.1     2421134       448.2 42007.9 12369945             294.5           153.7
Source: Dirjen Hortikultura (2004)

Countries of destination for export of shallot from Indonesia.

        Most of shallot from Indonesia was exported to customers countries as Malaysia, Singapura
dan Taiwan. Only a small volume was exported to the Philippines, Holland, Hongkong, Vietnam and
United States. In 2000, ekspor of shallot to US and Vietnam slightly increased (Table 20). These two
countries needed to be studied further as potential market for export.




Table 20. Volume, value and countries for shallot export market from Indonesia, 1997-2000.
                             Volume (ton)                        Value (thousand US$)
                  1997     1998      1999       2000      1997      1998     1999      2000
 Australia        0.1      0         0          0         0.1       0        0         0
 Hong Kong        0        0         4.9        4.9       0         0        2.9       2.9
 Jepang           0        0         0          0         0         0        0         0
 Malaysia         2095.0 124.2       3405.2 2777.3 393.7            29.6     954.3     785.2
 Netherlands      0        0         52.0       0         0         0        40.9      0
 Philippines      0        0         80.0       20        0         0        28.5      0.6
 Singapore        405.2    36.7      2939.3 2534.5 215.1            14.0     1274.5 693.3
 Slovenia         0        0         0          7.3       0         0        0         10.4
 Taiwan           531.4    15.4      2097.2 1206.7 134.3            3.7      434.2     241.5
 Thailand         16.0     0         0          0         12.4      0        0         0
 Tunisia          23.9     0         0          0         4.0       0        0         0
 United States    17.4     0         0.2        106.3     18.5      0        0.4       92.4
 Vietnam          0        0         24.0       96.3      0         0        4.8       28.9
Source: Dirjen Bin.Prod.Hort (2001)




                                                                                                 XIV
         As shallot producer, Indonesia had to compete Thailand, Philippines, Myanmar and Malaysia
to get market share in global market included domestic and export market. In Taiwan, the market share
of shallot from Indonesia was about 87%. In the future Taiwan market should be managed well to
avoid loosing of the market share (Table 22)

Table 8. Import of frozen and fresh shallot in Taiwan, 1993-1997 (kilogram)
                  1993             1994                1995             1996              1997
 India                                                 34548
 Indonesia        2,632,255        1,615,689           1,149,128        1,055,562         2,826,069
 Japan                                                                  300
 Malaysia                                              24,940
 Philippines      109,240          164,800             63,600           20,000            9,000
 Thailand         21,656           81,360              414,083          243,158           18,900
 Viet Nam         21,515           10,240              747,989          190,654           403,075
 TOTAL            2,784,666        1,872,089           2,434,288        1,509,674         3,257,044
Sumber: http://www.fintrac.com- Fintract inc. 2002




Countries of origin of imported shallot in Indonesia


         Shallot was imported mainly from Thailand, Philippines, Myanmar dan Malaysia. Other
important countries were Vietnam, India, Singapore dan China (Table 21).

Table 21. Volume, value and countries of origin of imported shallot in Indonesia, 1997-2000.
                              Volume (ton)                             Value (ribu US$)
                 1998         1999           2000             1998       1999         2000
 China           2589.6       346.7          481.9            575.7      84.7         138.7
 India           84.0         1405.2         868.2            25.4       382.3        229.9
 Malaysia        16137.6      9738.9         5013.5           4526.2     2716.8       1115.2
 Myanmar         7478.6       908.2          13826.8          2448.2     151.0        3413.8
 Philippines     12951.6      6203.5         10409.1          2961.5     1129.5       2670.1
 Singapore       398.0        1170.4         308.0            114.1      315.2        85.2
 Thailand        1436.7       6032.0         23186.8          276.9      1333.6       4545.9
 Vietnam         503.8        9362.5         1589.2           125.5      2464.1       437.1
Sumber: Dirjen Bin.Prod.Hort (2001)



                                                                                                      XV
Exporter and importer of shallot from Indonesia .


        According to Indonesian importers and exporters (Table 22 and 23), shallot was imported as
fresh or consumption shallot from Philippines, India, Thailand, Taiwan and Vietnam to be sold as
fresh (60%) and seed after stored for about three months (40%). Varieties of imported shallot were
Ilokos, Tanduyung, Vietnam, and Sumenep.
        Fresh shallot of Philippines, Sumenep and Timor varieties were exported to Malaysia,
Singapore, Taiwan and Thailand. Usually, the bulb size of fresh shallot for export was big (diameter
was + 3 cm) and completely dried. However, information was obtained that sometimes shallot of
seed-bulb-size was exported, particularly to Taiwan and Thailand, to be used as seed and the product
would be re-exported to Indonesia. But, this information was difficult to confirm to the exporters.


Table 22. Type and varieties of imported shallot and shallot for export, 2002.

   Name of               EXPORT                                  IMPORT
   company         Varieties   Type            Varieties        Type     Sold in Indonesia
                                                                                 as
                                                                          Fresh     Shallot
                                                                         shallot     seed
 PT G.E          Philippines    Fresh        Illokos         50% fresh  50%         50%
                 Sumenep                     Tanduyung       50% seed
                 Timor                       Sumenep
 CV B.T          Philippines    Fresh        Illokos         Fresh            60%         40%
                                             Tanduyung
                                             Vietnam
 CV B.J          Sumenep        Fresh        Illokos         Fresh            60%         40%
                                             Tanduyung



Table 23. Varieties of shallot and countries of export market for shallot from Indonesia, 2002.
                                      EXPORT                                 IMPORT
 Name of company         Variety names Country of               Variety names     Country of
                                           destination                            origin
 PT G.E                  Philippines       Malaysia             Illokos           Philippines
                         Sumenep           Singapore            Tanduyung         India
                         Timor             Taiwan               Sumenep           Thailand
                                                                                  Taiwan
 CV B.T                  Philippines       Malaysia             Illokos           Philippines
                                           Singapore            Tanduyung         Vietnam
                                                                Vietnam
 CV B.J                  Sumenep           Malaysia             Illokos           Philippines
                                           Philippines          Tanduyung         Thailand
                                           Thailand
                                           Singapore



                                                                                                      XVI
Problems of import and export of shallot


        Exporters/importers faced no problem to import shallot, but to export shallot they got
difficulties to collect good quality of shallot from farmers (Table 24). The most important standard
quality of shallot for export was the big size of bulb. Exporters did not mention that pesticides residue
was also problem for export.



Table 24. Problems and solution on export and import of shallot according to importers/exporters,
         Cirebon, 2002.
                                 IMPORT                                EXPORT
 Name of company Problems              Solution          Problems             Solution
 PT G.E               None             -                 None                 -
 CV B.T               None             -                 Low quality of Improvement of
                                                         shallot              shallot quality
 CV B.J               Exchange rate None                 Low quality of No export
                      of US Dollar                       shallot
                      was unstable
                                                         Transport cost

                                                           Exchange rate
                                                           of US Dollar
                                                           was unstable


Time of import and export of shallot

        Import of shallot in Indonesia took place every month along the year of which the peak of import
was April to August (Table 24); whereas export of shallot were from July – December of which October-
November were the peak month for export (Table 25).


Table 24. Import of shallot in Indonesia, 1999-2000
                                         Import of shallot (tons) (%)
 Year      Jan    Peb    Mar    Apr    Ma Jun Jul Au Sep                 Oct    No     De    Total
                                       y                   g                    v      c
 1999      436    0      0      190    0    173 127 102 213              365    678    117   8804
                                6           5       1      3                           7
           5%     0%     0%     22     0% 20        14     12     2%     4%     8%     13
                                %           %       %      %                           %
 2000      122    813    870    515    718 216 135 857 879               109    953    131   2386
           0                    0      9    9       7                    6             0     3
           5%     3%     4%     22     30   9% 6% 4% 4%                  6%     4%     5%
                                %      %
 Averag 5% 2% 2%                22     15   15      10     8% 3%         5%     6%     9%
 e                              %      %    %       %
Source: ASIBSINDO (2001)



                                                                                                     XVII
Tabel 25. Export of shallot from Indonesia to Taiwan, 1997.
 0703102000 Shallots, fresh or chilled -- 1997 by month -- Kilograms
                      Marc                             Augu
          Jan. Feb.          April May June July              Sept. Oct.    Nov. Dec.r Total
                      h                                st
 Indones                                         59,84 243,0 488,5 672,82 950,8 410,8 2,826,0
 ia                                                  0     61     63      5     96    84      69
 Philippi                            9,00
                                                                                           9,000
 ne                                     0
 Thailan                                                18,90
                                                                                          18,900
 d                                                          0
 Viet                                      35,29 42,00 141,0 72,84           20,00 49,00
                                                                     42,940              403,075
 Nam                                           5     0     00      0             0     0
                                     9,00 35,29 101,8 402,9 561,4 715,76 970,8 459,8 3,257,0
 TOTAL
                                        0      5    40     61     03      5     96    84      44
Sumber: http://www.fintrac.com- Fintract inc. 2002




Marketing of shallot done by farmers

          Farmers might sold their shallot through (1) sold as standing crops (local terms: tebasan), (2) sold
during shallot was dried after harvest (local terms: larikan), and (3) sold by weight after shallot was dried
for 3 or 7 days. Among the options most farmers (90%) preferred to sell their shallot as standing crops
(Table . In this selling technique traders and farmers negotiate the total value of the standing crops using
their own skill to estimate the yield of the crop. To estimate the yield of the crop, common indicators used
were (a) visual performance of the plant leaf and bulbs, and (b) estimation of samples weight taken from
the farmer’s field.
          Farmers preferred to sell their shallot as standing crop because of the following reasons:
-     To save time and labor cost since the harvest of shallot was conducted by traders not by farmers.
-     To avoid cheating by traders in the market.
-     Farmers had limited skill in marketing.

Table 26 . Technique of selling shallot done by farmers in Brebes, July 2002

         Techniques of selling                  Number of farmers                    %
                                                    (n= 30)
    Sold as standing crops                27                              90
    Sold during shallot was drying        0                               0
    Sold by weight:
     - at farmer’s house                  1                               7
     - in the market                      2                               13



Farmers’ problems in marketing


                                                                                                          XVIII
        Farmers in Cirebon perceived that the main problems of shallot marketing were (1) low price

of shallot, and (2) percentage of weight deduction was too much (Table 27). Farmers in Cirebon did

not perceived imported shallot as problems because many farmers in this location got some advantages

from growing imported variety of shallot,i.e. credit for seed and availability of seed in case local seed

was not enough.



Table 27. Main problems of shallot marketing in Cirebon, October 2002
                                         Farmers opinion (n=20)
           Problems                  Frequency              %                          Score
 Imported shallot                 3                 15                           3
 Low selling price                18                90                           38
 Difficulties to sell             2                 10                           6
 Cheating in weight               4                 20                           7
 Percentage of weight             14                70                           38
 deduction in the market was
 too much
 Price fluctuation                1                      5                       3
 Too many broker                  1                      5                       2




Consumers’ preferences on shallot quality

Characteristics of shallot quality preferred by consumers from different socio-economics status were
the same, those were (1) big bulb, (2) round shape bulb, (3) Red-violet skin color, and (4) dried (Table
28). The characteristics of shallot, especially the size of bulb, determined the price of shallot and its
target market. The big size bulb (Grade I Super) was the most expensive one and usually for export
market, the medium size of shallot was for hotels and supermarkets, and the little       shallot was for
traditional market (Table 29).

Table 28. Preference of household consumers on quality of shallot, 1991.
 Attribute           High economic     Medium economic          Low economic            Ranking
 quality             class             class                    class
 Bulb size           Big               Big                      Big                     I
 Bulb shape          Round             Round                    Round                   IV
 Skin color          Red-violet        Red-violet               Red-violet              II
 Dryness             Dried             Dried                    Dried                   III
 Thickness of skin Thin                Thin                     Thin
 Hardness of bulb Hard                 Hard                     Hard
 Aroma               Medium            Medium                   Medium
Source: Ameriana et al. (1991)



                                                                                                     XIX
Table 46 . Grades, prices and target market of shallot, 1991
 Grade               Price            Target market            Forms    Variety
                     Rp/kg
 Grade I Super       400              export                   pieces   Bangkok
 Grade I             350              Supermarket, hotel       pieces   non Bangkok
 Grade II            280              Supermarket,hotel        pieces   non Bangkok
 Grade III           250              Tradional market         pieces   non Bangkok
 Grade IV            220              Tradional market         pieces   non Bangkok
 Grade V             200              Tradional market         pieces   non Bangkok
 Grade VI            150              Tradional market         pieces   non Bangkok
Source: Ameriana et al. (1991)




                                                                                      XX
Summary
 Shallot is very important vegetable for both farmers and consumers in Indonesia. Assuming

    average shallot on each farm is 0.25 ha, about 350 thousand farm families are estimated to be
    engaged in its production. Production of shallot is about 809 thousand tons; almost all of the
    production is consumed in the country; only 0.6% (5400 ton) is exported. Most probably Indonesia
    is the biggest shallot consumers in the world.
   Shallot production increases with the average growth of 6% per year due to the increase of area
    (3% per year) and yield (2.6% per year).
   Production of shallot was seasonal. A low production (off-season) was taken place from January to
    July and high production (in season) was taken place from August to September.
   In the period of 1993 – 2003, import of shallot increased drastically from 22 thousand tons in 1993
    became 42 thousand tons in 2003. The increase of import due to (1) lack availability of
    consumption shallot during off-season, (2) lack availability of shallot seed during dry planting
    season (in-season), (3) the price of shallot produced in the country was more expensive than that of
    imported shallot, and (4) production of shallot using imported shallot as seed were higher and more
    profitable than that of using local seed.
   The yield of local seed varieties were lower than that of imported seed variety,i.e. Ilokos. However,
    many farmers still preferred to local variety of Bima Curut than Ilokos because the quality of local
    shallot in terms of skin bulb color, taste and aroma were better than that of imported variety. Other
    advantages of local variety were that farmers could use seed of local variety for several planting
    season, but they had to buy a new seed of imported variety every planting season.
   Shallot production was labor intensive. The highest percentage of production cost were for labor
    cost ( + 40%) and seed cost (+ 30%)
   In dry season the main pest of shallot in Brebes, Cirebon and Nganjuk was S. exigua while in wet
    season the main diseases were Alternaria sp, Colletotrichum sp. and Fusarium sp.
   In shallot storage, the main diseases were Aspergillus sp. and Fusarium sp.; the main pest was
    Epistia sp; and physilogical losses were dry rot (keropos), sprouts and rooted bulbs.




                                                                                                     XXI
b.   Hot pepper, Witono Adiyogo




                                  XXII
   OVERVIEW OF PRODUCTION, CONSUMPTION AND DISTRIBUTION ASPECTS OF HOT PEPPER IN INDONESIA


Introduction

Hot pepper is an important and essential component in Indonesian diet. It is mainly consumed in fresh semi crushed form,
locally known as “sambal”. Hot pepper could also be categorized as an important commercial crop, since it is grown year-
round. It is cultivated mainly by small farmers both in highland and lowland areas under rain-fed as well as irrigated
condition. In 2005, it was cultivated on a total area of 103, 531 ha producing 661, 730 t of fresh weight with an average yield
of 6.39 t/ha.

Growing hot pepper is a labor intensive activity; it provides employment to families who are engaged in all aspects of the
enterprise: propagation, production, harvesting, marketing preparation and even selling. It is the only high value crop grown
in the rain-fed areas by a large number of poor farmers; therefore, all of its production and marketing aspects are crucial for
their livelihood. Hot pepper production is increasingly shifting from an essentially subsistence farming to a commercial
venture and becoming a source of revenue for thousands of families in urban, peri-urban and rural communities.

Despite the importance of hot pepper and its product in the Indonesian diet and their role in generating income for farmers
and other stakeholders in the food chain, not many studies were available on the issues in the hot pepper sector as the
commodity moves from the farm to consumers table. This study intended to fill this gap by conducting comprehensive
literature/desk study and to identify bottlenecks along the hot pepper supply chain.

Domestic Production

Hot pepper was mainly grown in Central Java, West Java and North Sumatra. More than 16% of hot pepper production was
harvested in Central Java, followed by 15.6% and 11.4% from West Java and North Sumatra, respectively.

Table 1 Hot pepper area and production by province, Indonesia, 2005

                                      Harvested Area                            Production                        Yield
    Province
                              (ha)                     (%)                (t)                  (%)                (t/ha)
East Java                     8,046                      7.8           60,747                  9.2                 7.55
Central Java                 16,461                     15.9           98,930                 15.0                 6.01
West Java                    15,600                     15.1          198,343                 30.0                12.71
North Sumatra                11,387                     11.0           93,003                 14.1                 8.17
West Sumatra                  5,244                      5.1           13,458                  2.0                 2.57
Aceh                          9,184                      8.9           31,791                  4.8                 3.46
Bengkulu                      7,402                      7.1           30,678                  4.6                 4.14
South Sulawesi                6,152                      5.9           30,168                  4.5                 4.90
            Sub-total        79,476                     76.8          557,118                 84.2                 7.01
Other                        24,055                     23.2          104,612                 15.8                 4.35
                Total      103,531                     100.0          661,730                100.0                 6.39
Source: Directorate General of Horticulture, 2006
Available data from the Directorate General of Horticulture basically cover the data for both hot pepper and chili pepper. The
data for these two crops were just available separately since 2003. The production of those two crops in Indonesia fluctuated
570 to 1,590 thousand t, while area under hot pepper and chili pepper varied from 142 to 194 thousand ha in 1990-2005.
The production reached the record level of 1,590 thousand t in 1995, especially because of the increase in yield. Table 2
shows that sustaining such sudden jump in production may, however, be difficult. Meanwhile, Figure 1 suggests that the
fluctuation of hot pepper and chili pepper production in 1990-2005 was mainly caused by the fluctuation of their yield. For hot
pepper alone, there was a decreasing trend in area, production and yield during the period of 2003-2005.




                                                                                                                           XXIII
Table 2 Area, production and yield of hot pepper and chili pepper in Indonesia, 1990-2005

             Year                             Harvested Area                                      Production                           Yield
                                                             Hot Pepper and Chili Pepper
            1990                                    162,283                                         569,604                              3.5
            1991                                    168,061                                         627,169                              3.7
            1992                                    162,519                                         703,799                              4.3
            1993                                    157,499                                         772,715                              4.9
            1994                                    177,639                                         724,445                              4.1
            1995                                    182,263                                       1,589,978                              8.7
            1996                                    169,764                                       1,043,792                              6.1
            1997                                    161,602                                         801,832                              5.0
            1998                                    164,944                                         848,524                              5.1
            1999                                    183,347                                       1,007,726                              5.5
            2000                                    174,708                                         727,747                              4.2
            2001                                    142,556                                         580,464                              4.1
            2002                                    150,598                                         635,089                              4.2
            2003                                    176,264                                       1,066,722                              6.1
            2004                                    194,588                                       1,100,514                              5.7
            2005                                    187,236                                       1,058,023                              5.7
                                                                        Hot Pepper
            2003                                115,233                                                 774,408                          6.7
            2004                                110,170                                                 714,705                          6.5
            2005                                103,531                                                 661,730                          6.4
Source: Directorate General of Horticulture, 2006


                                                                             Figure 1
                                   Area, production and y ield of hot and chili pepper, 1990-2005
                                    20




                                                                                                                             hcarea

                                                                                                                             hcprod
                                    10
                                                                                                                             harea

                                                                                                                             hprod

                                                                                                                             hyield
                         Value




                                     0                                                                                       hcyield
                                         90   91   92   93    94   95   96    97   98   99   00    01    02   03   04   05


                                         Year

International Trade

The total trade (import plus export) of Indonesia gradually increased from 7.9 thousand t worth US$ 5.1 million in 2001 to
13.7 thousand t worth over 11.6 million in 2005. From 2001 to 2004, the country generally remained in deficit in hot/chili
pepper trade, as quantity and value of imports were higher than the corresponding values of export. In 2005, however, the
deficit was only in quantity, when the country had a net import of over 2.4 thousand t, but gaining US$ 2.8 million (Figure 2
and 3).




                                                                                                                                               XXIV
                Table 3 international trades in hot pepper and chili pepper from Indonesia, 2001-2005.

                                                           Import                                      Export                               Total Trade                           Net Trade Balance
                   Year
                                     Quantity                            Value              Quantity               Value          Quantity                    Value              Quantity              Value
                                      (kg)                                ($)                (kg)                   ($)            (kg)                        ($)                (kg)                  ($)
                2001                 6,724,518                           3,980,278          1,267,757              1,089,305       7,992,275              5,069,583              -5,456,761          -2,890,973
                2002                 7,351,424                           4,197,151            641,953              1,201,285       7,993,377              5,398,436              -6,709,471          -2,995,866
                2003                 6,630,711                           3,046,224          1,577,512               941,613        8,208,223              3,987,837              -5,053,199          -2,104,611
                2004                 7,572,448                           3,097,134          1,879,374              1,581,358       9,451,822              4,678,492              -5,693,074          -1,515,776
                2005                 8,090,616                           4,407,360          5,617,739              7,210,822     13,708,355             11,618,182               -2,472,877           2,803,462
                Source: Directorate General of Horticulture, 2006

                                                                Figure 2                                                                                       Figure 3

                       Quantity imported and ex ported of hot/chili pepper, 2001-2005                                            Value of imported/ex ported of hot/chili pepper, 2001-2005
                          10000000                                                                                                8000000



                           8000000
                                                                                                                                  6000000


                           6000000

                                                                                                                                  4000000

                           4000000


                                                                                                                                  2000000
Quantity (kg)




                           2000000
                                                                                               Quantity imported                                                                              Value of imported
                                                                                                                     Value ($)




                                 0                                                             Quantity exported                        0                                                     Value of exported
                                     2001                2002     2003     2004    2005                                                      2001      2002       2003    2004    2005


                                                                  Year                                                                                            Year



                                                                                                                   Figure 4

                                                                                  Trend in import and ex port prices of hot/chili pepper, 2001-2005
                                                                                   2.0




                                                                                   1.5




                                                                                   1.0
                                        Price (US$/kg)




                                                                                     .5
                                                                                                                                                         Import

                                                                                   0.0                                                                   Export
                                                                                     2001           2002             2003        2004           2005

                                                                                                                     Year



                Indonesia exported high value of hot/chili pepper and imported low-priced ones (Figure 4). The difference reached the
                highest level in 2002 when export prices reached its peak and then declined to its lowest level in 2003, but then gradually
                increased in the following years. During the period of 2001-2005, export prices remained higher than the import prices. It
                implies that Indonesia should try to bring its export prices lower than its import prices to become competitive in the
                international market. This could be achieved by improving productivity in hot/chili production and efficiency in its marketing
                system.

                Climatic Situation

                The climate of hot/chili pepper production centers is tropical with annual average rainfall ranges of 1480-1790 mm. Most of
                the rains come in November-March, while July-September is almost dry. The dry spell is longer and more severe in East
                Java than in Central Java and West Java. Central Java usually experiences relatively higher rains during the rainy season
                compared to the other two parts of Java. Considering this climatic situation, November to April is considered as wet season,
                and March-October as dry season. The temperature in Central and Eastern Java ranges between 27-290C, while in Western



                                                                                                                                                                                                                  XXV
Java it is much cooler, ranging between 22-230C throughout the year (source: downloaded from
http://www.weatherbase.com/weather/city.). Therefore, upland hot/chili pepper production faces significantly low temperature
compared to the production in lowland areas. This implies that technology development for various eco-regions should take
such differences in climatic situation into consideration.

Farmer Characteristics

The age of hot/chili pepper farmers were ranging between 40-43 years and averaged ten years experience in growing this
particular crop. As compared to non-hot/chili pepper farmers, they have bigger family size, but their education level is quite
similar. Hot/chili pepper farmers spent almost the same time in agriculture as that of non-hot/chili pepper farmers. The farms
of the hot/chili pepper farmers were lightly smaller and more fragmented than that of the non-hot/chili pepper farmers. The
cropping intensity was higher, since most hot/chili pepper farmers cultivated more crops at a time using shorter duration
crops. However, the land use intensity was almost similar with that of the non-hot/chili pepper farmers.


Table 4 Characteristics of hot/chili pepper farmers in Indonesia

                                     Survey 1997             Survey 2000                        Survey 2002
        Characteristics              (West Java)            (Central Java)              (West, Central and East Java)
                                                                                   Hot/chili farmer      Non-hot/chili farmer
Age (years)                               42.1                     43.0                  40.0                   45.0
Experience (years)                                                                       10.3                   19.1
           1 – 10 years (%)               63.1                     50.0
           11 – 20 years (%)              22.4                     35.0
           > 20 years (%)                 14.5                     15.0
Family size (no.)                            -                        -                  4.54                   3.24
Education (years)                          6.8                      7.9                   7.3                    8.8
Farm size (ha)                                                                           0.56                   0.72
           Owned                        46.8%                    67.5%                   0.36                   0.50
           Rented                       53.2%                    32.5%                   0.20                   0.22
Number of fragments (no.)                 1.42                     1.61                  1.53                   1.35
Time spend in agriculture (%)             92.1                     94.2                  90.0                   89.1
Cultivated area (ha)                          -                       -                  0.49                   0.71
Land use intensity (%)                      96                      92                     94                    97
Cropping intensity (%)                     254                     277                   282                    177
Hot/chili pepper area (ha)                                                               0.38                     -
            Minimum (ha)            0.02 - 0.14                    0.22
            Maximum (ha)            0.07 - 0.28                    0.69
Hot Pepper Varieties

More than 70% of the production areas were planted by hybrid varieties, however, about 30% of these were planted with the
second year progeny of hybrid seed. Local and open pollinated varieties were grown only on 20% of the production areas.
The hybrid varieties were mainly concentrated in West and Central Java, while the majority of local and open pollinated
varieties were grown in the northern part of Central Java. The most popular hybrid varieties were TM 999, Hot Beauty and
Hot Chili. The most common open pollinated variety grown by farmers was Tit Super, while the most common local varieties
cultivated were Tit Segitiga, Tit Helm and Tit Randu.




                                                                                                                        XXVI
Table 5 Distribution of hot pepper varieties grown in some important production areas in Indonesia

                                                                                       Planted in
        Type            Name of Variety              A: Survey 2002                  B: Survey 2003                 C: Survey 2007
Hybrid               TM 999:Hung Nong           West Java, Central Java       West Java (Ciamis)                Central Java (Magelang)
                                                and, East Java
                     Prabu: East West           Central Java
                     Gada: East West            Central Java
                     Lado: East West            Central Java                  South Sumatra (Lampung)
                     Taro: East West            Central Java                  South Sumatra (Lampung)
                     CTH: Chis Tai              West Java                                                       Central Java (Magelang)
                     Super                      East Java
                     King Chili                                               West Nusa Tenggara
                     Hot Chili                                                West Java (Ciamis)
                     Hot Beauty                                               West Java (Ciamis), Central
                                                                              Java (Brebes), East Java
                                                                              (Banyuwangi), West Nusa
                                                                              Tenggara
                     Arimbi: Panah Merah                                      West Java (Ciamis), West
                                                                              Nusa Tenggara
                     Equator: Panah Merah                                     West Java (Ciamis)
                     TM 88                                                    West Nusa Tenggara
                     Inco 99                                                                                    Central Java (Magelang)
                     Indohot 99                                                                                 Central Java (Magelang)
Open Pollinated      Tit Super: East West       East Java                     Central Java (Brebes)             Central Java (Brebes)
                     Cakra: Cakra Hijau         Central Java
                     Selektani                  West Java, Central Java
Local                Tit Segitiga               Central Java                                                    Central Java (Brebes)
                     Tit Helm                   Central Java
                     Tit Randu                  Central Java                                                    Central Java (Brebes)
                     Cemeti                                                   West Java (Ciamis)
                     Tanjung                                                  West Java (Ciamis)
                     Sultan                                                   West Java (Ciamis)
                     Radio                                                    South Sumatra (Lampung)
                     Tampar                                                                                     Central Java (Rembang)
Source:
               2002: Socio-economic survey of the GTZ Project: “Development of locally adapted, multiple disease resistant, high yielding
                chili cultivar for targeted countries in Asia”, AVRDC.
               2003: Participatory rural appraisal for designing hot pepper ICM (Integrated Crop Management) technology, IVEGRI
               2007: Rapid rural appraisal for developing chili IDM (Integrated Disease Management) technology), ACIAR
Intercropping

Hot pepper was intercropped mostly with one other crop. As compared to local and open pollinated varieties, hybrid varieties
were more common to be planted as single crop. The hybrid varieties were intercropped with shallot, tomato, cabbage,
maize, eggplant and yard-long bean, while local varieties were mainly intercropped with shallot. In various regions, the extent
of intercropping might vary from 38% to 97%.




                                                                                                                                  XXVII
Table 6 Intercropping of hot pepper based on various surveys.

                    Intercrop                          A: Survey 1997              B: Survey 2002              C: Survey 2007
                                                              (%)                         (%)                         (%)
Hot pepper alone                                              30.6                         38.5                       34.8
Hot pepper with one other crop:                               62.3                         53.2                       62.0
    Tomato                                                                 -                        12.2                         9.6
    Maize                                                                  -                         0.8                         1.2
    Shallot                                                             58.4                        32.3                        43.3
    Cabbage                                                                -                         4.4                         2.3
    Other                                                                3.9                         3.5                         5.6
Hot pepper with two other crops:                                7.1                          4.8                       3.2
    Tomato and onion                                                       -                         1.6                           -
    Tomato and other                                                       -                         2.4                         2.6
    Other                                                                7.1                         0.8                         0.6
Hot pepper with three other crops:                                  -                        0.4                         -
    Tomato, onion and cabbage                                               -                       0.4                             -
Source:
          1997: Baseline survey for developing IPM (Integrated Pest Management) technology, IVEGRI
          2002: Socio-economic survey of the GTZ Project: “Development of locally adapted, multiple disease resistant, high yielding
              chili cultivar for targeted countries in Asia”, AVRDC.
          2007: Rapid rural appraisal for developing chili IDM (Integrated Disease Management) technology), ACIAR


Crop Rotation

A quite significant percentage of farmers practiced hot pepper – fallow – hot pepper rotation, and the majority of them
cultivated a single crop in one year leaving the land fallow during one crop season. However, some farmers planted two hot
pepper crops in a year. Tomato and shallot were considered as the most common crops cultivated in rotation with hot
pepper.




                                                                                                                             XXVIII
Table 7 Crop rotation of hot pepper

           Variety                                                          Crop Rotation

Hybrid                        Shallot (relay cropped with hot pepper) – tomato – shallot (relay cropped with hot pepper)
                              Tomato – hot pepper – tomato
                              Cabbage – hot pepper – cabbage
                              Corn –hot pepper – corn
                              Shallot – hot pepper – shallot
                              Hot pepper – fallow – hot pepper
                              Other (relay cropped with hot pepper) –fallow – other (relay cropped with hot pepper)
                              Hot pepper – other – hot pepper
                              Cucumber – yard-long bean – shallot (relay cropped with hot pepper)
Open pollinated               Shallot (relay cropped with hot pepper) – fallow – shallot (relay cropped with hot pepper)
                              Maize – hot pepper - maize
                              Paddy – hot pepper - paddy
                              Peanut – fallow – hot pepper
                              Mungbean – fallow – hot pepper
Local                         Shallot (relay cropped with hot pepper) – paddy – shallot (relay cropped with hot pepper)
                              Brassica – hot pepper – brassica
                              Cabbage – hot pepper – cabbage
                              Corn – hot pepper – corn
                              Paddy – hot pepper - paddy
                              Other – hot pepper - other
                              Hot pepper – fallow – hot pepper
Source: Various surveys


Cultivation Time

Most of hot pepper farmers sow in nursery seedbeds, and later transplant the seedlings in the fields. However, some farmers
frequently also purchase seedlings from the other farmers, since they consider that this is more practical and time-saving.
The improved varieties, both hybrid and open pollinated, mature in shorter duration, especially because they have shorter
harvesting span compared to local varieties. These varieties have also enabled farmers to grow hot pepper during the off-
season after they weigh the risks (reduced output vs. higher price).

Table 8 Cultivation and harvesting time by season and variety

                                         Wet season                                                Dry season
        Variety           Planting        Start of               End of            Planting          Start of       End of
                                         harvesting            harvesting                          harvesting     harvesting
Hybrid                         March               May                June                  June        August             October
Open pollinated                  April             June                July                 July        August             October
Local                         January            March                 July         September         November         February
Source: Various surveys




                                                                                                                            XXIX
Factors Affecting Variety Selection

The two most important factors considered by farmers in the selection of hot pepper variety were the market price of the
harvested fruit and its yield. They were then followed by the variety’s resistance to pest and disease. Some farmers even
considered seedling survival as an important criterion in deciding to use a particular variety. Other less important factors in
the selection of hot pepper varieties are reported in Table 9.
Table 9 Relative ranking of factors considered in the selection of hot pepper seed

                                          Survey 1997       Survey 2002                   Survey 2007 (Central Java)
            Factors                       (West Java)      (West, Central
                                                           and East Java)      Brebes             Magelang              Rembang
Market price                                  2                  1                1                     3                  1
Yield                                         1                  2                -                     1                  2
Disease                                       3                  -                2                     2                  -
Insect free                                   4                  -                3                     -                  -
Appearance                                     -                 -                -                     5                  5
Color                                          -                 4                -                     -                  -
Flesh thickness                                -                 5                -                     -                  -
Pungency                                       -                 3                -                     -                  -
Least replanted                               5                  -                4                     -                  3
Harvesting span                                -                 -                -                     4                  4
Source: Various surveys


Insects Problem

Aphids, mites and thrips were insects that had high relative importance in attacking hot pepper fields, especially during dry
season. It was also reported that in hybrid cultivation, the highest ranking insects were thrips and mites, while aphid was the
main insect in local. The estimates of average yield losses due to insect attack increased from 11% in 1993-1997 to 25% in
1998-2002.

Table 10Relative ranking of major insects reported in hot pepper fields from various surveys

                                 Insect                              Survey     Survey                      Survey 2007
                                                                      1997       2002
                                                                                               Brebes        Magelang     Rembang
Aphids (Aphis gossypii and Myzus persicae)                             1              3           -              -             3
Caterpillar (Helicovera armigera and Spodopthera litura)               -              4           -              -             -
Thrips (Scirtothrips dorsalis)                                         2              1           1              2             2
Mites (Polyphagotarsonemus latus)                                      -              2           3              4             -
White fly (Aleurodicus dispersus)                                      -              -           4              1             -
Dacus dorsalis                                                         3              -           -              -             -
Fruit fly                                                              -              -           -              -             1
Fruit borer                                                            -              -           2              3             -
Chrysomelid beetles                                                    -              -           -              -             4
White grub (Scarabaeidae larvae)                                     -              -             -              -             5
Source: Survey 1997 (West Java); Survey 2002 (West, Central and East Java); and Survey 2007 (Central Java)


Diseases Problem

Overall, viruses (Gemini virus), anthracnose and Phytophthora blight were the major diseases reported by farmers. Viruses
were problems in all hot pepper types; anthracnose infested large areas of hybrid fields, while Phytophthora blight heavily



                                                                                                                                   XXX
infested open pollinated and local varieties. Viruses were ranked to be the most devastating disease, and anthracnose got
the second highest rank, followed by Phytophthora blight and bacterial wilt. The estimates of average yield losses due to
disease attack increased from 29% in 1993-1997 to 38% in 1998-2002.

Table 11Relative ranking of major diseases reported in hot pepper fields from various surveys

                            Disease                               Survey        Survey                    Survey 2007
                                                                   1997          2002
                                                                                              Brebes          Magelang    Rembang
Viruses (Gemini virus)                                               1             1             2               1            2
Anthracnose (Colletotrichum acutatum, C. capsici and C.              3             2             1               2            1
gloeosporioides)
Phytophthora blight (Phytophthora capsici)                           -             3             3               3            3
Bacterial wilt (Ralstonia solanacearum)                              2             4             4               -                -
Source: Survey 1997 (West Java); Survey 2002 (West, Central and East Java); and Survey 2007 (Central Java)


Insect and Disease Control

All farmers applied chemical pesticides to control pests and diseases. A large majority of farmers applied mixture of
pesticides comprising as many as 2-6 different types.

Table 12Extent of pesticides use and their perceived effectiveness on hot pepper

              Control                        Survey 1997   Survey 2002                           Survey 2007

                                                                                 Brebes              Magelang            Rembang
Mixing pesticides (%)
        Always                                  68.7        40.0 - 70.0            76.3                56.4                20.6
        Sometimes                               19.6             -                 18.9                24.5                15.8
        Never                                   11.7        30.0 – 60.0            4.8                 19.1                63.6
Number of chemicals mixed                                      2-3                2–6                  2–4                2–3
       2 (%)                                    37.4            -                  -
       3 (%)                                    27.0            -                  -
       4 (%)                                    24.4            -                  -
       >4 (%)                                   11.2            -                  -
Effectiveness (%)                               82.0        64.0 - 71.0            70.0                75.0                70.0



Marketing

Marketing of hot pepper basically does not change much since 5-10 years ago. Here are some pointers of hot pepper
marketing synthesized from observation and estimates in the 2002 survey:
    Hot pepper produce was mainly sold to local trader or commission agents (72%), wholesale market at district level
       (17%), local market at sub-district level (7%) and farmer associations (4%).
    From the local trader, 74% of the produce was directly sold to the wholesalers at the province level and the rest to
       the wholesalers at the district level.
    Meanwhile, farmer associations sold to wholesalers at the district level, wholesalers at the sub-district level,
       wholesalers based at Jakarta, local trader and directly to consumers.
    The local market at sub-district level sold 60% to retailer, 24% to wholesaler at district level and the remaining 16%
       to processors.




                                                                                                                                  XXXI
                                                                     Producer

                                                 4%
              7%                                                                             72%
                                                                              17%
                                                              11%
                                       Farmer’s                                                 Local Trader/
              5%                      Associations                                             Comm. Agents

                                                                                 26%
                            27%            25%              32%                                                               74%



                                                                                             85%
                     Local Market                     24%           Wholesaler                                  Wholesaler
                      Sub-district                                   District                                    Province
                                                                                               15%

               60%                   16%                                                                       48%


                                                                                 28%                                 27%
                                      Wholesaler                                                   Processor
                                       Jakarta
                                                                         35%
                            37%                                                        25%                                    25%


                                                                                               75%
                                                 65%
                       Retailer                                      Vendor                                          Export




               35%                                                100%




                                                                    Consumer



                                     Figure 5 Hot pepper marketing channels in Indonesia

      The wholesaler at the district level sold 85% to the wholesaler at the province level and the rest to the processors.
      The wholesaler at the province level sold 48% to retailers, 27% to processors, and 25% to the exporters.
      The wholesalers in Jakarta sold 37% to retailers, 35% to vendors, and 28% to hot pepper processors.
      The processors sold the output mainly to exporters (75%) and the remaining 25% back in the wholesaler market.
      Retailers sold 65% to vendors and the rest directly to consumers
      The vendors sold all of the produce to the consumers.

All farmers were concerned about the competition in the supply of similar produce from other regions which tends to increase
price uncertainty. Uncertain market prices were the major marketing constraints expressed by quite large number of farmers.
Lack of price information and its unreliability and un-timeliness, even if there was any, were another important marketing
constraint.




                                                                                                                                    XXXII
Table 13Farmer’s perception about constraints on hot pepper marketing

No                                            Description                                   Survey 2000            Survey 2002
                                                                                                (%)                     %

1         Sometimes there is no choice of selling the produce to certain traders or              7.4                    12.0
          exploitative role of middlemen
2         Price uncertainty                                                                        -                    30.0
3         Price offered by traders tends to be low                                              69.8                     6.0
4         Price information is not reliable/accountable enough to be used as guidance for       47.3                    19.0
          bargaining
5         Selling produce directly to the market needs high cost and may not be feasible        58.6                       -
          related to the produce volume sold
6         Quality requirements asked by traders is occasionally difficult to satisfy            33.9                       -
7         Sortation and grading tend to be costly and reduce the expected profit                13.1                       -
8         Competition in the supply of similar produce from other regions tends to             100.0                       -
          increase price uncertainty
9         Weak bargaining power                                                                    -                     3.0
10        No farmer organization                                                                   -                     2.0
11        No market problem                                                                        -                    15.0
12        Others                                                                                   -                    13.0



Input Use

    Seed rate

Farmers applied higher seed rate for home-produced compared to purchased seeds, mainly because the former had better
germination rate and purchased seed was usually taken better cared of before packing.


Table 14Seed rate by source and hot pepper type

                                                  Seed rate (kg/ha)                                         Farmers using (%)
         Type                 Self produced           Purchased                 Average         Own-farm              Purchased seed
                                                                                              produced seed
Hybrid                            0.91                      0.26                   0.48                34                       66
Open pollinated                   2.55                      1.05                   1.89                56                       44
Local                             1.48                      4.95                   2.17                80                       20
Overall                           1.29                      0.86                   1.07                49                       51


    Fertilizer use

On average, 8.7 t/ha organic fertilizer (manure) was applied to hot pepper, especially when it was grown in highland areas.
Overall, about 279 kg/ha of all nutrients was also used. The amount of nitrogen was slightly higher than the other nutrients.




                                                                                                                                     XXXIII
Table 15Fertilizer use by hot pepper type

                                     Organic fertilizer (t/ha)                                     Total fertilizer nutrient (kg/ha)
         Type         Cattle          Poultry          Mixed              Total           N               P               K               Zn
                      manure          manure
Hybrid                  0.93              4.84             3.53            9.3            93              93              91              62
Open pollinated         0.00              2.76             1.84            4.6            67              40              52              19
Local                   2.83              2.84             0.63            6.3            81              44              50              13
Overall                 1.45              4.49             2.72            8.7            88              75              76              40



   Insecticide use

Nearly 31 liters-kg/ha chemical insecticides were used to control insect on hot pepper. Those chemicals were mostly mixed
as many as seven different types. On average, 21 sprays were applied on hot pepper.

Table 16Quantity of insecticide and number of sprays on hot pepper

        Type                 Insecticide (single)                        Insecticide (mixed)               Overall insecticide         Number of
                                                                                                            applied (kg/ha)              spray
                      Lt/ha         Kg/ha        Overall          Lt/ha           Kg/ha       Overall
Hybrid                 7.2           5.4            12.6          21.0             3.4         24.4                37.1                   21
Open pollinated       12.0            0             12.0          17.0             0.0         17.0                29.1                   29
Local                  8.5           4.0            12.5           7.6             2.4         10.0                22.5                   19
Overall                7.8           3.7            11.5          16.9             3.0         19.9                31.4                   21



   Fungicide use

On average, 59 kg/ha of chemicals were applied to control diseases in hot pepper. The quantities were highest for local
variety, but the number of sprays was highest in open pollinated variety.

Table 17Quantity of fungicide and number of sprays on hot pepper

        Type                  Fungicide (single)                          Fungicide (mixed)                 Overall fungicide          Number of
                                                                                                             applied (kg/ha)             spray
                      Lt/ha         Kg/ha        Overall          Lt/ha           Kg/ha       Overall
Hybrid                 6.2           7.3            13.5          32.0            14.7         46.7                60.2                   24
Open pollinated       10.7           3.6            14.1          12.9             7.1         20.0                34.1                   40
Local                  8.2           7.2            15.4          32.0            14.0         54.0                69.4                   39
Overall                6.6           7.1            13.7          31.2            14.2         45.4                59.1                   29



   Labor use

On average, 345 labor days/ha were used for cultivating hot pepper. More than one-half of labor went to crop management
activities, regardless of variety.




                                                                                                                                          XXXIV
Table 18Distribution of labor among different activity in hot pepper

        Type                             Percentage distribution                                          Total labor
                       Land          Management             Harvesting             Post-                   (day/ha)
                    preparation                                                  harvesting
Hybrid                   12.6                56.0              25.3                    6.1                     385
Open pollinated          14.1                55.4              24.7                    5.8                     330
Local                    13.3                54.9              25.4                    6.4                     265
Overall                  12.9                55.5              25.4                    6.2                     345



Hot pepper Yield

On average, per ha yield of hot pepper was 12.6 t, and hybrid type produced the highest yield. The yield of hot pepper under
irrigated condition was about double the yield under rainfed condition. Meanwhile, the yield and number of intercrops were
negatively correlated, regardless of hot pepper variety.

Table 19Hot pepper yield (t/ha) by irrigation and number of intercrops

        Type        Irrigated          Non-                           Number of crops intercropped                                 Overall
                                    irrigated
                                                      Zero                One                 Two               Three
Hybrid                  17.9          9.4             17.3                11.6                   8.9               4.5              13.9
Open pollinated         12.2          6.6             11.0                  -                     -                  -              11.0
Local                   11.2          3.0             11.1                 9.7                    -                  -              10.0
Overall                 15.6          7.3             15.6                10.4                   9.1               4.5              12.6




Cost and Factor Share

Data for the economics of hot pepper cultivation basically need to be updated (collected in the 2002 survey). However, the
data are still used in this overview since the available information is actually quite complete and comprehensive. It is
estimated that the current economics of hot pepper are roughly double their values in 2002.

Table 20Cost of production and factor share in hot pepper cultivation.
          Type          Cost of Production                                             Factor share (%)
                      Total         Per unit
                      (Rp.           output         Labor      Seed       Fertilizer     Irrigation    Pesticide         Others   Structures
                     000/ha)      (Rp. 000/kg)
 Hybrid               19,972          1.21           17          2              13           12           39               12         5
 Open pollinated      18,950          1.83           16          2              12           8            41               15         6
 Local                13,725          1.41           23          1              16           5            31               15         9
 Overall              17,791          1.30           18          2              14           10           37               13         6

Total per ha cost of hot pepper was lower in case of local variety, but per kg costs of local and hybrid varieties were quite
comparable. Even though per ha costs of open pollinated and hybrid were similar, per kg cost of open pollinated varieties
was higher than the hybrids because of the lower yield of the former. The factor share of chemicals was highest in all hot
pepper varieties. It is worth mentioning that seeds played the major role in productivity, but had the lowest factor share.




                                                                                                                                       XXXV
Economics of Hot pepper Cultivation

The benefit-cost ratios for local and open pollinated varieties were lower than that of the hybrid varieties. Although open
pollinated varieties had higher yield and higher prices than local varieties, its higher production cost produced B/C ration
similar to local varieties. However, higher yield and prices, despite higher production cost, gave higher B/C ratio for the
hybrid compared to local and open pollinated varieties.

Table 21Economics of hot pepper cultivation by variety

          Type                      Gross return                     Gross return                           B – C ratio
                                    (Rp. 000/ha)                     (Rp. 000/ha)                              (%)

Hybrid                                69,360                           45,618                                   251

Open pollinated                       40,850                           20,900                                   116

Local                                 29,541                           16,816                                   115

Overall                               54,999                           39,208                                   209


Major Constraints in Hot pepper Production

Insects or diseases were number one or two ranking constraints in all hot pepper varieties, except in local varieties where
low yield potential was the second ranking and insects the third ranking constraints. Difficulty in marketing was ranked as
third constraint in hybrid and open pollinated varieties. Unstable environment was ranked as fourth constraint in all except
hybrid varieties.

Table 22Ranking of major constraints faced by hot pepper farmers

Survey 2002 (West, Central and East Java)
          Type          Disease          Insect     High seed cost   Low yield      Environment           Market       Low price

Hybrid                      2              1              5                 -            -                  3                 4
Open pollinated             2              1              -              5              4                   3                 -

Local                       1              3              -              2              4                   5                 -

Survey 2003 (West Java)

                           Capital             Market price     Pest and diseases            Irrigation            Post-harvest

All types                       2                   1                   3                        4                        5




Hot pepper Processing

In the country, there were generally small hot pepper-processing units, as well as very large multinational hot pepper
processing factories mainly for exports. As indicated by processors, there were four hot pepper grades most common in
Indonesia. Hot pepper with dark red color, good pungency, less seeds and without any infection were considered high grade.
Based on their selection, small hot pepper with high pungency, good fragrance and lower price were given first, second and
third rank, respectively. The processors expressed their concerns about poor grading and quality supplied by farmers, price
fluctuation, inadequate supply and lack of capital. They also preferred to import hot pepper from India, China, Thailand and
Burma, which were cheap and of high quality.




                                                                                                                                  XXXVI
Hot pepper Consumption

   Per capita consumption

Based on the National Socio Economic Survey, during the period of 1990-2002, there was 8.58% increase in hot pepper per
capita consumption in Indonesia. The survey showed that per capita consumption of hot pepper were 1.14 kg/year (1990);
1.06 kg/year (1993); 1.03 kg/year (1996); 0.92 kg/year (1999); and 1.42 kg/year (2002), respectively.

   Demand elasticity

An increase in the price of hot pepper had very little effect on its demand. If prices were doubled, there would only be a 13-
14% decrease in the consumption of hot pepper. Conversely, a 50% reduction in hot pepper prices would increase
consumption by less than only two percent.

Table 23Consumer response to changes in hot pepper prices
    Change in price (%)                                     Percentage change in consumption
                                           Green                          Red                             Product
Increase in price
        110                                 -4.19                           -2.12                             0
        125                                 -4.59                           -4.70                           -0.07
        150                                 -5.80                           -5.58                           -0.08
        175                                 -7.62                           -8.64                           -1.98
        200                                -13.95                          -12.71                           -3.32
Decrease in price
        90                                    0                             0.24                              0
        80                                    0                             0.24                              0
        70                                  0.03                            0.29                            0.14
        60                                  0.05                            0.72                            0.95
        50                                  0.53                            1.56                            1.15




                                                                                                                     XXXVII
Summary and Research Implication

   Hot pepper is a high value commercial vegetable crop in Indonesia. Based on average hot pepper on each farm, over
    463 thousand farm families are estimated to be engaged in its production, and it can be speculated that a similar number
    may be engaged in the processing and marketing activities.
   Hot pepper production is a labor intensive and small farmer activity. Being small landholders, hot pepper farmers are
    engaged in more crop activities and attain higher cropping intensity. As alternative risk-covering mechanisms are not
    available, a large percentage of farmers use intercropping as a tool to cover risk, although the practice produces lower
    yield.
   Large quantities of insecticides and fungicides are applied both as single and mixed form. Despite high pesticide use, the
    average losses due to insects and diseases are still high. It is also associated with the increase in losses overtime
    despite the adoption of hybrid hot pepper varieties. These have made insects and diseases the most important constraint
    in hot pepper production.
   The use of hybrid varieties has provided higher yield, better quality attributes, and more economic viability than other
    varieties. However, underpinning financial constraints forced the farmers to use saved-seeds or self-produced seeds,
    which reduced quality, yields and economic viability. Responding to this situation, a less costly and low input-demanding
    improved open pollinated varieties that have high yield potential and desired attributes may help the majority of small-
    poor hot pepper farmers.
   Considering hot pepper as an integral part of Indonesian diet suggested by low demand elasticity, expansion in hot
    pepper production should be carefully planned. Incorporating consumer preferences in hot pepper varieties and
    improving the grading system will improve its price and enhance farmer income. Stabilizing hot pepper production by
    developing pest-resistant varieties and reducing environment stresses can reduce risks in hot pepper production.
    Reducing production cost through judicious use of inputs, especially fertilizers and pesticides will not only reduce the
    cash requirements and enable small farmers to engage in highly profitable hot pepper production, but can also reduce
    environmental costs.
   Linking hot pepper farmers with the market is critically important and needs more serious attention. Strengthening market
    infrastructure and information network can help to resolve some important issues, such as unpredictability of prices, lack
    of price information and exploitation by middlemen. Market improvements can help farmers supply hot pepper as desired
    by the consumers, and also improve their share in consumer price.
   Some bottlenecks tentatively identified for further research are:
                o Unavailability of a less costly and low input-demanding improved open pollinated varieties that have high
                     yield potential and desired attributes.
                o Low quality of hot pepper for processing that leads to higher dependence to imported raw materials.
                o Relatively low productivity and high production cost that lead to export prices of hot pepper remained
                     higher than the import prices (becoming uncompetitive in the international market).
                o Considering insects and diseases as the number one constraint in hot pepper production, no appropriate,
                     safe, and low-risk control method available yet, that can assure farmers to stop the excessive use of
                     pesticides.
                o Lack of post-harvest and processing activities at the farm-level that reduce farmer capacity of holding
                     output for a longer period. Hence, it reduces farmers share in the retail price of hot pepper and weaken
                     their bargaining power.
                o Lack of collaboration along the market chain, among different stakeholders, that hinders the effort to
                     increase efficiency in the market chain and to enhance the value of the products and services generated
                     along a market chain.




                                                                                                                    XXXVIII
c.   Sweet pepper, Nikardi Gunadi




                                    XXXIX
                       Sweet pepper production in Indonesia

                                            Nikardi Gunadi
                        Indonesian Vegetable Research Institute (IVEGRI)



Present state of knowledge

        Sweet pepper (Capsicum annuum L.) is thought to originate come from central and south
America where numerous species used centuries before Columbus landed on the continent. The
cultivation of sweet peppers spread throughout Europe and Asia after the 1500’s. The cultivated
Capsicum pepper is herbaceous, which is annual in temperate regions, but can be produce
continuous growth in tropical areas. The fruits of sweet pepper are the source of capsaicin, the most
commonly used spice in the world. Other cultivars are cultivated for production of the green or more
mature fruit, used in salads and as a cooked or raw vegetable. All capsicum fruits contain small
amounts of protein, fat and sugar. But have a large quantity of carotene and are excellent source of
vitamin C (up to 340 mg/100 g of fresh fruit) compare to oranges which has approximately only 146
mg/100 g of fresh fruit. Peppers also have about 94 mg/100 g of vitamin A, which is more than double
that found in oranges.
        In Indonesia, sweet pepper is one of the important vegetables produced under protected
cultivation. Most of the sweet peppers are cultivated by farmers using simple plastic houses, made
mostly from bamboo. In general, the productivity of sweet pepper is constrained by the adverse effects
of high temperatures on fruit set, and detrimental influence of low temperatures on fruit shape. For
                                                                     0
high yields of good quality fruit, the mean air temperatures of 21-23 C are optimal during vegetative
                        0
growth, followed by 21 C during the fruit growth period. In Indonesia, the sweet pepper plant is
                                                                                              0
suitable grown in the highland area where the air temperatures are relatively low, about 16-25 C.
Sweet pepper production using protected cultivation system is based on indeterminate cultivars in
which the plants continually develop and grow from the new meristems that produce new stems,
leaves, flowers and fruit. Indeterminate cultivars require constant pruning to manage their growth. In
order to optimize yield, a balance between vegetative (leaves and stems) and generative (flowers and
fruit) growth must be established and maintained.
         The formal data of the production area of sweet pepper in Indonesia is not available until
recently. The sweet pepper cultivation in Indonesia is initiated in the 1990’s and the largest production
area of sweet pepper is known located in West Java. The total production area of sweet pepper in
Indonesia is estimated about 70 ha, consisted of 26 ha in Pasirlangu and 5 ha in Cigugur, Lembang
(West Java), 1 ha in Garut and 1 ha in Cianjur (West Java), 15 ha in Nongkojajar (East Java), 2 ha in
Bali and 20 ha in Lombok.
        There is an increase demand for sweet peppers, which are cultivated under plastic house in
recent years. The increase demand for sweet pepper is occurred not only for local market but also for
export market. The increase demand for local market is related to the urbanisation, which is commonly
asked for commercially produced high quality products. The demand of sweet pepper for export
market is also increasing from time to time. Indonesia has exported the sweet pepper to Taiwan since
2000 and in 2001, the export value of sweet pepper to Taiwan was Rp 970 million with the volume of
105,124 kg. In 2002, the volume was increase to as many as 190,055 kg with the export value of Rp
1.78 billion and in 2003 until the month of August, the export value as much as Rp 1.5 billion with the
export value 156 ton. Unfortunately, the export to Taiwan was terminated due to the issue of the



                                                                                                        I
product from Indonesia was suspected to contain fruit fly which was not present in Taiwan before. At
present, the sweet pepper products from Indonesia are exported mainly to Singapore. Some sweet
pepper products are also exported to other countries such as Hongkong and Brunei. Nowadays a
maximum of 4 tons export quality sweet pepper can be exported per week, whereas the actual
requirement of these export markets is 10 tons per week. The volume of export products from
Indonesia could not fulfil the demand from Singapore. Based on this figure, there is an opportunity to
increase the volume for export market of sweet pepper from Indonesia.
       Results of the exploratory survey conducted in 2003 indicated that most farmer respondents
                                             2                                        2
used a plant population of three plants per m (59%), the others used four plants per m . The efficient
                                                                                             2
use of pesticides and nutrition were the reason to use a higher number of plants per m . Burned rice
husks in a plastic bag is the growth medium used. There were eleven varieties of sweet pepper
cultivated by the farmer respondents, but only two varieties were commonly grown by the farmers, i.e.
Spartacus and Edison (82 % each). Their adaptation to local conditions and yields were the main
criteria for the farmers to grow these varieties, besides other criteria like shape and size of the fruit.
The yields of sweet pepper varied between varieties. Edison, Capino, Spartacus and Manjalika were
the best varieties in terms of total fruit yield, which ranged from 1.5 to 3.0 kg per plant. As indicated by
most farmer respondents, they were not aware of a government extension program on protected
cultivation in plastic houses. Almost all sweet pepper farmers obtained the knowledge of the
production techniques from the agricultural store, where they buy their inputs. Unfortunately,
transferring the technology by this method resulted in very limited knowledge transferred to the
farmers. The farmer respondents indicated the need of information for the improvement in cultural
practices, including growing techniques, nutrition, pest and disease control, irrigation and planting
media. Other suggestions included non-technical aspects such as capital and marketing. The nutrition
management in sweet pepper cultivation in plastic houses varied between farmer respondents. In
general, the farmer respondents used ready made nutrition mixes, obtained from a shop or company,
dissolved in water by the farmer. The liquid is applied to the crop in a dosage ranging from 750 to
2,000 cc per plant per day. The time of application, in general, varies from three to five times a day. In
the dry season, the application interval is shorter as compared to that in the rainy season. Two
systems of nutrition application are used, i.e. drip irrigation and manual irrigation, using a plastic hose.
       The yields of sweet pepper in Indonesia at the farmer level are considered relatively low,
which ranged 3.0-3.5 kg per plant. In the Netherlands, with the controlled conditions in the glass
                                                                           2
house, the yields sweet pepper could reach as high as 25-30 kg per m with the growing period of 11
                                                                                                2
months. In Indonesia, the yields of sweet pepper at the research station were about 8-9 kg per m with
                                                                     2
the growing period of 7 months in 2005 and about 18-19 kg per m in 2006.
        In Indonesia, a plastic house made from bamboo is the common standard plastic house used by
most of the farmers. The plastic house made from bamboo is relatively cheaper than that made from other
materials such as wood and metal, beside that the bamboo material is easily available in most of the area
in Indonesia. However, the type of bamboo plastic house is considered heavy which reduce a lot of light
intercepted in the plastic house. Research results conducted in 2004 indicated that plastic house
construction affected the light intensity intercepted in each plastic house and the wood-metal type
plastic house intercepted 12.6% of light higher than that in the traditional bamboo plastic house. Fruit
weight and fruit number per plant of sweet pepper grown at the wood-metal plastic house were higher
than those of sweet pepper grown at the bamboo plastic house.




                                                                                                          II
Research results in the research station


1. The experiment to determine the effect of plastic house construction on the light intensity and
   micro climate condition in the plastic house and the response of sweet pepper grown in two
   different plastic house constructions, conducted in 2004 indicated
      Plastic house construction affected the light intensity intercepted in each plastic house and the
       wood-metal type plastic house intercepted 12.6% of light higher than that in the traditional
       bamboo plastic house.
      Fruit weight and fruit number per plant of sweet pepper grown at the wood-metal type plastic
       house were higher than those of sweet pepper grown at the traditional bamboo plastic house.
      Sweet pepper plant grown in rice husk gave higher either fruit weight or fruit number per plant
       than those grown in perlite.


2. The experiment to determine the effect of plant population and technique of fruit and side shoot
   selection on the growth and yields of sweet pepper grown in two different plastic house
   constructions, conducted in 2005 indicated
   
                                                                                                     2
       Plant population or plant density affected significantly the fruit weight and fruit number per m and
                                                                  2
       the crops grown with high population (8.3 stems per m ) had significant higher total fruit weight
                                                                        2
       than that of crops grown with low population (6.7 stems per m ).
   
                                                                                         2
       Significant effect of plant population was also indicated by fruit weight per m of class A (fruit
       weight > 200 g) and the crops grown with high population had significant higher fruit weight of
       class A than that of crops grown with low population.
      Fruit weight and fruit number per plant of sweet pepper grown at the wood metal type plastic
       house were higher than those of sweet pepper grown at the traditional bamboo plastic house.
      In terms of technique of side shoot pruning and fruit selection treatment, similar total yields
       were obtained between the two techniques, but the introduction system/technique (treatment
                                                                2
       B) gave significant higher weight of fruit > 200 g per m compared to those of the conventional
       technique applied by most farmers (treatment A). This experiment suggest that In order to
       obtain more sweet pepper fruit of > 200 g, introduction pruning system (B) should be applied.


3. The experiment to determine the effect of number of stems per plant and growing container of
   sweet pepper grown in two different plastic house constructions on the growth and yield of sweet
   pepper, conducted in 2006 indicated that
      Plastic house construction did not significantly affected the growth parameter and marketable
                  2                         2
       yield per m , however the yield per m of class A with fruit weight of > 200 g of crops grown in the
       plastic house without roof ventilation yielded higher than crops grown in the modified plastic
       house with roof ventilation
   
                                                                                                               2
       Number of stems per plant grown in polybag had a significant effect on marketable yield per m
                                 2
       and marketable yield per m of crops grown with 3 and 4 stems per plant were significantly higher
                                                                                                         2
       than those of crops grown with 2 stems per plant. On average, the marketable yield per m of
       crops grown with 4 and 3 stems per plant were 6.2 and 5.2% respectively higher than those of
       crops grown with 2 stems per plant
      Although the crops grown in polybag were significantly higher than those of crops grown in slab,
       the effect of growing container was not significant on the yield of sweet pepper. In order to
       increase the efficient use of sweet pepper seed



                                                                                                             III
       In order to increase the efficient use of seed, it is suggested that the sweet pepper crops cv.
        Ferrari should be grown with 3 or 4 stems per plant.

4. The evaluation of potential of natural enemies for thrips on sweet pepper conducted in 2005
   indicated that the use of M. sexmaculatus and Verticillium sp. could suppress plant damage due to
    thrips and could maintain the yield equal with insecticide spraying 2 times per week.

5. The experiment to determine a control threshold of Thrips parvispinus on sweet pepper conducted
    in 2005 indicated that the use of control threshold of thrips could suppress thrips population below
    the injury level, could reduce plant damage until lower than 10% and could reduce insecticide use
    of about 82-95%, and could maintain the yield.

6. The experiment to determine the technical and economical feasibility of IPM for controlling Thrips
    sp. in sweet pepper conducted in 2006 indicated that
       Releasing of M. sexmaculatus, spraying of V. lecanii and used of sticky traps could suppress
        thrips population below control threshold until 7 WAT.
       The use of control threshold could reduce the frequency of insecticide and fungicide spraying
        with 61% and 82.5% respectively
       Implementation of IPM technology could reduce pesticide residue on fruits below maximum
        residue level
       Implementation of IPM technology could maintain the yield equal with the yield from
        Conventional technology
       Implementation of IPM technology could reduce the pest control cost, therefore the profit was
        higher than that in the Conventional technology
       IPM technology can be implemented technically and economically.




                                                                                                     IV
Some problems may still be encountered in the sweet pepper production


   The yields of sweet pepper in general are considered relatively low
   Construction of plastic house appropriate to farmer needs and tropical climate conditions (including cheap
    and long lasting plastic covers)
   Poor cultivation techniques (planting distance, plant or stem population, pruning and fruit selection, growing
    media)
   Small average farm size
   Due to the requirement to relatively low optimum temperatures for growth (21-230C), the growing area is
    limited to the highland area with the altitude of more than 1000 m asl.
   Water and fertilizer management/strategy
   Plant size
   Pests (thrips spp) and bacterial wilt problems
   Residues of pesticides and pesticide usage
   Post harvest losses and quality
   Resistant varieties and variety for special demand
   Lack of capital and poor access to credit
   Taste of sweet pepper
   Marketing system and absence of efficient producers’ organizations

The opportunities for improvement of sweet pepper production under protected cultivation includes
   Innovative production systems for increased quality and production
   Optimal water and nutrient management
   Variety testing and evaluation
   Integrated Pest Management
   Storage, packaging and transport solutions for quality
   Special plastic covers (stabilized) and mild chemical for plastic covers cleaning
   Market segmentation (taste, colour etc)
   Branding




                                                                                                                 V
ANNEX 2. Project proposals (3)




                                 VI
        Horticultural Research Co-operation between Indonesia and The Netherlands
                                        HORTIN-II

1. Project title           :   Improvement of sweet pepper production technology to achieve
                               competitive supply chains

2. Project leaders         :   Nikardi Gunadi, Indonesian Vegetable Research Institute, Indonesia
                               E mail: ngunadi@bdg.centrin.net.id

                               Ruud Maaswinkel, WUR Greenhouse Horticulture, The Netherlands
                               E mail: ruud.maaswinkel@wur.nl

                               Marcel van der Voort, Applied Plant Research, The Netherlands
                               E mail: marcel.vandervoort@wur.nl

3.            Executing    :   Indonesian Vegetable Research Institute (IVEGRI)
agencies                       Jalan Tangkuban Perahu 517
                               Lembang, Bandung 40391
                               Indonesia
                               Tel.: + 62 22 2786245
                               Fax: + 62 22 2786416

                               WUR Greenhouse Horticulture
                               P.O. Box 20
                               2665 ZG Bleiswijk
                               The Netherlands
                               Tel.: + 31 317 485606
                               Fax: + 31

                               Applied Plant Research
                               Wageningen University and Researchcentre
                               P.O. Box 430
                               8200 AK Lelystad
                               The Netherlands
                               Tel.: + 31 320 291111
                               Fax: + 31 320 230479
4. Abstract                :   New techniques for cost-effective production of sweet pepper in plastic
                               houses will be tested, both under research and farmers’ conditions. The
                               aim of the project is to increase yields and to lower production costs. The
                               introduction of techniques of integrated pest management should result in
                               higher product quality and less residues. An economic analysis will assess
                               the impact of the work on farmers’ income.


5.   Participating organisations:
    Farmers group Suka Maju, Pasirlangu, Lembang.
    CV. Tirta Agri Kencana (Sweet pepper production and agro-supply company).
    Buana Tani (Agro-supply company).
    PT. ASB (Agro-supply company).
    PT East West Seed Indonesia (Seed Company).
    PT. Joro Serhalawan (Agribusiness and agro-supply company).

6. Objectives:
Long-term objectives:


                                                                                                      I
   To develop sustainable sweet pepper plastic house production technology, which matches the
    farmer needs through co-innovation.
   To Increase the yield and quality of sweet pepper grown in plastic houses in Indonesia.
   To increasing the adoption of technology of producing sweet pepper in plastic houses developed
    in the research project.
   Increasing farmers’ income.

Short-term objectives:
   Identifying the priority bottlenecks in the sweet pepper supply chain based on participatory
    approach.
   Developing improved and innovative production systems of sweet pepper grown in plastic houses,
    to increase production and quality based on the bottlenecks’ findings in the sweet pepper supply
    chain.
   Introducing techniques to farmers based on on-farm research.
   Developing the control technique of pest using the IPM concept for sweet pepper production
    under tropical plastic house conditions in Indonesia.
   Assessing the impact on farmers’ income by conducting economic evaluation on both existing and
    new techniques.

Purpose:
To contribute to the development of an innovative, high value and cost-effective supply chain for
sweet pepper in plastic houses in Indonesia.

7. Project description:
Sweet pepper in Indonesia is one of the important vegetables produced under protected cultivation.
Most of the sweet peppers, which are red, are cultivated by farmers using simple plastic houses, made
mostly from bamboo. In general, due to the requirement for a relatively low air temperature for sweet
pepper growing, sweet pepper is commonly grown in the highland areas of more than 1000 m asl. For
high yields of good quality fruit, mean air temperatures of 21-23 0C are optimal during vegetative
growth, followed by 210C during the fruit growth period.
     There is an increase demand for sweet peppers in recent years. This increase has occurred not
only for local market, but also for export market. The increased demand for local market is related to
the urbanisation. The urban population commonly asks for commercially produced high quality
products. At present, the sweet peppers from Indonesia are exported mainly to Singapore. Some
sweet peppers are also exported to other countries such as Hong Kong and Brunei. Nowadays a
maximum of 4 tons export quality sweet pepper can be exported per week, whereas the actual
requirement of these export markets is 10 tons per week. The volume of export products from
Indonesia could not fulfil the demand from Singapore. Based on this, there is an opportunity to
increase the volume for export market of sweet pepper from Indonesia.
     Several important research results i.e. plastic house construction, technological components for
sweet pepper production and IPM for sweet pepper have been obtained in 2003-2006, through the
HORTIN-I project. Some problems or bottlenecks in the sweet pepper supply chain are still present.
From several bottlenecks in the sweet pepper supply chain, the low yields level in the production
phase was selected as the bottleneck that needs to be solved and is likely to have the greatest impact
on production and profitability.
     The yields of sweet pepper in Indonesia at the farmer level are considered relatively low, which
ranged from 3.0 to 3.5 kg per plant, approximately 7.5 – 8.7 per m2. The low yields level was also
proposed and discussed in the group discussion during the inception workshop. The yields of sweet
pepper at the research station were about 8-9 kg per m2 in 2005 with a growing period of seven
months and about 18-19 kg per m2 in 2006 with a growing period of nine months. The relatively high
yields in 2006 were obtained in the experiment to determine the effect of plastic house construction,
number of stem per plant and growing container on the growth and yield of sweet pepper.
     In order to confirm the research results in 2006 and to develop the improved and innovative
production systems of sweet pepper grown in plastic house under farmers conditions, some aspect
related to the production technique and the quality of the product under farmers conditions needs to
be improved through co-innovation with growers.




                                                                                                    II
Other aspect that needs attention under farmers’ conditions includes control of pest using the IPM
concept. This aspect will include the use of imported predators.

7. Project methodology:
The project is planned to be conducted in two years 2007 and 2008. The research activities proposed
to be conducted in the project include:
 Identifying the priority bottlenecks in the sweet pepper supply chain based on participatory
    approach. This research activity includes desk/ literature study, survey and field observation and
    inception workshop. The desk/ literature study is carried out to obtain a comprehensive review
    concerning existing status and constraints of sweet pepper development along the supply chain.
    Survey and field observation is conducted to confirm and to complete the results of desk/literature
    study with the actual field condition. Group discussions will also be carried out involving ten key
    growers. The expected output of the activities above is tentative identified bottlenecks for sweet
    pepper development that may have potential to be formulated for co-innovation research. An
    inception workshop with growers and companies is also included in this activity in order to identify
    the priority bottlenecks in the sweet pepper supply chain which have the opportunities for co-
    innovation. The activity is also to generate ideas and inputs for co-innovation with partners
    (private sector, small and medium size enterprises, producer organizations, farmer groups).

   Developing the improved and innovative production systems of sweet pepper grown in plastic
    houses. It had been shown in an experiment conducted in 2006 with variety Tjang, that yields of
    18 -19 kg per m2 could be achieved. In order to confirm the research results of 2006 and to have
    other options for varieties, similar experiments should be carried out with two other potential
    varieties. This aspect includes the number of stems per plant. This aspect is important in order to
    increase the efficiency of use of expensive seeds. The experiment will be conducted at IVEGRI. In
    order to have the research results from the real condition at the farmer level, the research activity
    will also be conducted in a farmer’s plastic house in Cisarua, Lembang. Another aspect will be
    research of the plants’ growth balance between vegetative and generative stage, to achieve a
    high production during the whole growing period.

   Developing the control technique of pest using the IPM concept for sweet pepper production
    under the tropical plastic house conditions in Indonesia. Several research results on the use of
    local predator for thrips and technique for thrips control using IPM concepts have been obtained
    with the HORTIN-I project. However, it has been observed that problematic control for pest,
    especially thrips, is still present at the farmer level. This research activity will focus on thrips
    management using biological control strategies. The potential of natural enemies, either local or
    from import, especially for thrips control, will be determined in field experiments conducted under
    farmers’ conditions.

   During the experiments all inputs will be recorded. Based on the registrations a cost-benefit
    calculation will be made to establish the effect of the new techniques on the profitability of the
    crop.




                                                                                                      III
8. Expected outputs and impacts:
           Output                                                    Impact

      2007      Identification of the priority bottlenecks in the      Increase the yields level of
                 sweet pepper supply chain based on                      sweet pepper grown in plastic
                 participatory approach                                  house under tropical climate
                Improved and innovative production systems              condition
                 of sweet pepper grown in plastic house under           Increase the farmer knowledge
                 tropical climate condition through co-                  on producing sweet pepper
                 innovation                                              grown in plastic house under
                Identification potentials and constraints of co-        tropical climate condition
                 innovation in the sweet pepper project in
                 Indonesia

      2008      Improved and innovative production systems             Increase the yields level of
                 of sweet pepper grown in plastic house under            sweet pepper grown in plastic
                 tropical climate condition through co-                  house under tropical climate
                 innovation                                              condition
                Technology transfer/ knowledge transfer to             Increase the adoption of
                 the stakeholders                                        technology of producing sweet
                Control technique of pest using the IPM                 pepper in plastic house
                 concept for sweet pepper production under               developed in the research
                 tropical plastic house conditions in Indonesia          project
                                                                        Substantially reduce the use of
                                                                         harmful pesticides applied in
                                                                         sweet pepper production under
                                                                         tropical plastic house condition
                                                                        Development of a high value
                                                                         supply chain


9. Training and technology transfer/knowledge exchange:
    Year Subject                Participant             Location                         Organisation
                                Organisation                                             involved
    2007
    2008  Workshop on the  Farmers, private            Lembang, West                     IVEGRI and
               results of           companies,             Java                              WUR
               implementation       extension-workers,
               of co-innovation     researchers, seed
               development in       producers, material
               sweet pepper in      producers/
               Indonesia            importers
             Field days for     Farmers                Lembang, West                     IVEGRI and
               exposing and                                Java                              WUR
               communicating
               the results of
               research project
               to non-direct
               participating
               farmers


10.




                                                                                                       IV
Workplan 2007 and 2008:
   Time Activity                                                     Deliverables
   2007      Field visits, group discussion and inception            Overview
              workshop                                                Report of research results
             Experiments at IVEGRI and at the farmers’               Identification of potential and
              place in Cisarua, West Java                                constraints of co- innovation

    2008         Experiments at IVEGRI and at the farmers’           Report of research results
                  place in Cisarua, West Java                         Technology/ knowledge transfer
                 Workshop at IVEGRI


11. Logframe project:
                  Intervention            Verifiable             Source of               Assumptions
                                          indicators             verification
     General            Increasing the    Increased             Report of                No specific
     aim                 productivity         income and             research                constraint in
                         and product          profitability of       project                 the
                         quality              stakeholders        Report of                 implemen-
                         through co-          in supply              trade market            tation
                         innovation to        chain
                         fulfil local      Increased
                         demand and           farm margin
                         export market     Increased
                                              trade volume
                                              of sweet
                                              pepper
                                           Increased
                                              productivity
                                              and product
                                              quality

     Project            Developing          Numbers of              Report of            Companies
     purpose             the                  private                  research              and farmers
                         sustainable          companies                project               are willing to
                         sweet pepper         and farmers                                    invest in the
                         production           involved                                       project
                         technology          Investments
                         through co-          of private
                         innovation           companies
                                              and farmers

     Results            Co-innovation       Experiments/            Availability of      Increase
                         on sweet             Research                 improve and           adoption of
                         pepper               projects                 innovative            production
                         project              implemented              production            technology
                         initiated and                                 technology            developed in
                         implemented                                                         the research
                         with private                                                        project
                         companies
                         and farmers

     Activities         Identification      Bottlenecks             Report of            Propose
                         of bottlenecks       identified               research              activities are
                         in sweet                                      project               in line with
                         pepper supply                                                       the ideas of
                         chain               Experiments                                    participating



                                                                                                              V
                      Intervention        Verifiable        Source of        Assumptions
                                          indicators        verification
                         Experiments         carried out                       companies
                          on developing                                         and farmers
                          the improved
                          and
                          innovative
                          production
                          systems of
                          sweet pepper



12. Budget (Euro):
    Funds allocated for:              2007                          2008

    Personnel costs                   19 000                        27 000

    Material costs                    2 000                         4 000

    Training/technology transfer      -                             4 500

    Travel                            1 500                         3 500

    Others                            500                           1 000

    Total                             23 000                        40 000




                                                                                           VI
        Horticultural Research Co-operation between Indonesia and The Netherlands
                                        HORTIN-II

1. Project title            :   Development of a cost-effective and sustainable hot pepper supply chain

2. Project leaders          :   Witono Adiyoga, Indonesian Vegetable Research Institute, Indonesia
                                E mail: wwadi@bdg.centrin.net.id

                                Herman de Putter, Applied Plant Research, The Netherlands
                                E mail: herman.deputter@wur.nl

                                Marcel van der Voort, Applied Plant Research, The Netherlands
                                E mail: marcel.vandervoort@wur.nl

3.            Executing     :   Indonesian Vegetable Research Institute (IVEGRI)
agencies                        Jalan Tangkuban Perahu 517
                                Lembang, Bandung 40391
                                Indonesia
                                Tel.: + 62 22 2786245
                                Fax: + 62 22 2786416

                                Applied Plant Research
                                Wageningen University and Researchcentre
                                P.O. Box 430
                                8200 AK Lelystad
                                The Netherlands
                                Tel.: + 31 320 291111
                                Fax: + 31 320 230479
4. Abstract                 :   New techniques for hot pepper seedling production will be developed,
                                together with an evaluation of varieties suitable for the lowland farming
                                conditions in Central Java. The aim of the work is to create the basis of a
                                healthy and more productive crop, reducing the cost price per unit of
                                product. Lower costs, combined with reduced pesticide use, will offer the
                                opportunity for the creation of a distinctive, cost-effective, high value
                                supply chain.


5.   Participating organisations:
    Farmers Group in Kersana, Brebes, Central Java.
    PT East West Seed Indonesia (Seed Company).
    PT Bimandiri (Supermarket Vegetable Supplier).
    Amarta (Agribusiness Market and Support Activity).
    Syngenta (Pesticide Company).

6. Objectives:
Long-term objectives:
    Developing a sustainable production system for hot pepper production in lowland areas.
    Increasing the yield of hot pepper and reducing the production costs in lowland areas.
    Increasing farmers’ income.

Short-term objectives:
    Identifying the priority bottlenecks in the hot pepper supply chain based on participatory
     approach.
    Developing new techniques jointly among farmers, private companies and research institutes.
    Introducing techniques to farmers based on on-farm research.



                                                                                                      VII
   Improving the seedling system to increase the quality of hot pepper planting material.
   Increasing the availability of hot pepper varieties that have high yield potential and desired quality
    attributes, and are suitable for the farmers’ circumstances.
   Assessing the impact on farmers’ income by conducting economic evaluation on both existing and
    new techniques.

Purpose:
To contribute to the development of an innovative, high value and cost-effective supply chain for hot
pepper in the northern coastal lowlands of Central Java.

7. Project description:
Hot pepper is an important and essential component in the Indonesian diet. It is mainly consumed in
fresh semi crushed form, locally known as “sambal”. Hot pepper could also be categorized as an
important commercial crop, since it is grown year-round. It is cultivated mainly by small farmers both
in highland and lowland areas under rain-fed as well as irrigated conditions. In 2005, it was cultivated
on a total area of 103, 531 ha producing 661,730 t of fresh weight, with an average yield of 6.39 t/ha.
     Hot pepper production is a labour intensive and small farmer activity. Being small landholders, hot
pepper farmers are engaged in more crop activities and attain high cropping intensities. As alternative
risk-covering mechanisms are not available, a large percentage of farmers use intercropping as a tool
to cover risk, although the practice produces lower yields for the crop.
     Large quantities of insecticides and fungicides are applied both as single and mixed form. Despite
high pesticide use, the average losses due to insects and diseases are still high.
     The use of hybrid varieties has provided higher yield, better quality attributes, and more economic
viability than other varieties. However, underpinning financial constraints forced the farmers to use
saved-seeds or self-produced seeds, which reduce quality, yields and economic viability. Responding
to this situation, less costly and low input-demanding, improved open pollinated varieties, that have
high yield potential and desired quality attributes, may help the majority of small-poor hot pepper
farmers.
     Considering hot pepper as an integral part of the Indonesian diet, characterised by low demand
elasticity, expansion in hot pepper production should be carefully planned. Incorporating consumer
preferences in hot pepper varieties and improving the grading system will improve its price and
enhance farmer income.
     During the workshop, group discussion had succeeded to narrow down bottlenecks in the supply
chain into one main problem that is low yield. Even though, some varieties with high yield potential
(30 t/ha) have been already available in the market, their adoption in certain areas is still low.
Meanwhile, farmers’ preference to produce their own-seed also creates additional problem since it
frequently results in poor quality seedlings.

7. Project methodology:
 The project is planned to be conducted in two years (2007 and 2008) in the lowland areas of
   Central Java.
 It is initiated by identifying the priority bottlenecks in the hot pepper supply chain based on
   participatory approach.
 The research will take place in cooperation with the farmers group in Kersana, Brebes and PT East
   West Seed Indonesia at Purwakarta. Location of the experiments will be in Brebes.
 In 2007 a cost-benefit calculation will be made to establish the current profit of hot pepper
   cultivation.
 Simultaneously, research activities will take place in the second half year of 2007 (dry season) to
   establish the effect of new techniques on the quality of transplants of hybrid, open pollinated and
   local varieties. The new techniques such as:
            o Simple net-house constructions;
            o Type of trays;
            o Soil or media used for raising transplants;
            o Cultivation period in the nursery;
            o Application of additives, for instance fertilizers and pesticides to the transplants.
 There will be two nursery experiments carried out in Brebes, in which the effect of the different
   treatments will be tested.



                                                                                                      VIII
   In 2008 in both the wet and dry season one experiment is planned, in which seedling raising
    techniques will be optimised. In the same period also experiments will be executed to establish
    the agronomic value of different hybrid and open pollinated varieties.
   During the experiments all inputs will be recorded and forms will be developed in order to develop
    a quality control system for transplant-raising. With this farmers are able to comply with
    certification requirements of the market.
   Based on the registrations a cost-benefit calculation will be made to establish the effect of the
    new techniques on the profitability of the crop.

8. Expected outputs and impacts:
           Output                                                        Impact

     2007       Identification of the priority bottlenecks in the           Improved hot pepper seedling
                 hot pepper supply chain                                      system
                Good quality of hot pepper planting material

     2008       Good quality of hot pepper planting material                Improved hot pepper seedling
                Availability of alternative good varieties that              system
                 have high yield potential, desired quality                  Increased yield and income for
                 attributes and suitable to farmers’                          hot pepper farmers
                 circumstances                                               Development of a high value
                                                                              supply chain


9. Training and technology transfer/knowledge exchange:
    Year Subject                 Participant            Location                               Organisation
                                 Organisation                                                  involved
    2007  Workshop on the  Growers and private  Bandung, West                                IVEGRI and
               identification of    companies in the       Java                                   APR-WUR
               priority             supply chain of hot
               bottlenecks in       pepper
               the hot pepper
               supply chain

     2008       Field days for          Growers and private               Brebes, Central      IVEGRI and
                 exposing and             companies in the                   Java                  APR-WUR
                 communicating            supply chain of hot
                 the results of           pepper
                 research project
                 to non-direct
                 participating
                 farmers


10. Workplan 2007 and 2008:
    Time Activity                                                                              Deliverables
    2007   Field visits, group discussion and inception workshop                               Overview
           Establish working arrangement with partners                                         Report
           Initializing nursery experiments at the farmers’ condition

     2008       Continuing research on seedling system                                           Report
                Starting variety testing during the wet and dry season




                                                                                                            IX
11. Logframe project:
                  Intervention          Verifiable           Source of             Assumptions
                                        indicators           verification
    General          Increasing the     Increased hot       Report of              No
    aim               yield and             pepper quality       research              unexpected
                      quality of hot     Increased hot          project               problems
                      pepper in the         pepper yield                               occurring
                      lowland areas      Increased                                    during project
                                            farmers’                                   planning and
                                            income                                     implemen-
                                                                                       tation
    Project          Developing           Numbers of          Report of            Companies
    purpose           the                   private              research              and farmers
                      sustainable           companies            project               are willing to
                      hot pepper            and farmers                                invest in the
                      production            involved                                   project
                      under the            Contribution
                      farmer’s              of private
                      conditions in         companies
                      low land              and farmers
                      areas trough
                      co-innovation
                      approach

    Results          Co-innovation        Experiments/        Availability of      Profitability of
                      on hot pepper         Research             high quality          newly
                      project jointly       projects             transplants to        introduced
                      planned and           implemented          farmers, new          techniques is
                      implemented                                varieties             higher than
                      with private                               tested and            existing
                      companies                                  introduced in         techniques
                      and farmers                                practise

    Activities     Identification of      Bottlenecks         Report of            Proposed
                    bottlenecks in          identified and       research              activities are
                    hot pepper              described            project               in line with
                    supply chain           Experiments                                the ideas of
                   Experiments on          carried out                                participating
                    improving the           under farmers                              companies
                    seedling system         conditions                                 and farmers
                    and testing            Results
                    varieties               introduced in
                   Economic                practise
                    evaluation of
                    innovations




                                                                                                        X
12. Budget (Euro):
    Funds allocated for:           2007     2008

    Personnel costs                31 000   29 500
    Material costs                 3 000    2 500
    Training/technology transfer   1 000    2 000
    Travel                         4 500    6 000
    Others                         500
    Total                          40 000   40 000




                                                     XI
       Horticultural Research Co-operation between Indonesia and The Netherlands
                                       HORTIN-II

1. Project title           :   Improvement of shallot supply chains

2. Project leaders         :   Rofik Sinung Basuki, Indonesian Vegetable Research Institute, Indonesia
                               E mail: rofik@balitsa.or.id

                               Lubbert van den Brink, Applied Plant Research, The Netherlands
                               E mail: lubbert.vandenbrink@wur.nl

                               Marcel van der Voort, Applied Plant Research, The Netherlands
                               E mail: marcel.vandervoort@wur.nl

3.            Executing    :   Indonesian Vegetable Research Institute (IVEGRI)
agencies                       Jalan Tangkuban Perahu 517
                               Lembang, Bandung 40391
                               Indonesia
                               Tel.: + 62 22 2786245
                               Fax: + 62 22 2786416

                               Applied Plant Research
                               Wageningen University and Researchcentre
                               P.O. Box 430
                               8200 AK Lelystad
                               The Netherlands
                               Tel.: + 31 320 291111
                               Fax: + 31 320 230479
4. Abstract                :   The aim of the project is to develop and test a new method for the
                               production of shallots from true seeds, as compared to the traditional
                               production from bulb-seed. Production of shallots from seeds is likely to
                               result in considerable lower costs per unit of product. Also there are
                               indications that the price of shallots from seeds is higher, because of a
                               higher quality. The new method will be tested under the local conditions
                               and should contribute to making local shallot production more productive
                               and competitive.


5. Participating organisations:
 Farmers Group in Kersana, Brebes, Central Java.
 PT East West Seed Indonesia (Seed Company).

6. Objectives:
Long-term objectives:
   To improve the competitiveness of Indonesian shallot production by means of introducing new
    cost effective methods.

Short-term objectives:
   To improve the technique of seedlings-production.
   To improve the technique of transplanting the seedlings from the nursery into the field.
   To collect information about financial and technical aspects of production and storage of seed-
    bulbs from True Shallot Seeds (TSS), compared to seed-bulbs from traditional production.

Purpose:
To create a high value shallot supply chain by making use of true shallot seeds.



                                                                                                      XII
7. Project description:
In the last decade, import of shallot consumption bulbs and the use of imported bulb-seed increased.
Meanwhile, exports of shallot were relatively stable. The import of consumption shallot increased,
because supply from domestic production was not enough, particularly during the rainy season. The
quality of imported shallot in terms of bulb size was better and the price was lower than that of local
shallots. The use of imported seed increased, because the yield of imported seed was higher than that
of local seed. There are several problems to be faced in order to increase yield and quality of local
shallots. The problems include low quality of local seed, incidences of pest and diseases, and
inefficient and ineffective use of pesticides and fertilizer.
     In discussions with farmers, private sector, researchers, government officers and policy makers,
several opportunities for co-innovation were identified. These innovations will increase the yield and
quality of local shallot. Among the opportunities, co-innovation on techniques for improvement of
growing shallots from seeds (TSS) and technology improvements on production and storage of
traditional local seed-bulb, were considered to increase the competitiveness of local shallot.
     Especially new practical techniques should be introduced in which less labour is needed, and
survival of TSS seedlings in the production field is maximized. The improvement will raise farmer’s
income. Also the consumer price of local shallots will be lower.

7. Project methodology:
 The project is planned to be conducted in two years (2007 and 2008) in the lowland areas of
   Central Java.
 It is initiated by identifying the priority bottlenecks in the shallot supply chain based on
   participatory approach.
 The research will take place in cooperation with the farmers group in Kersana, Brebes and PT East
   West Seed Indonesia at Purwakarta. Location of the experiments will be in Brebes.

In 2007 the experimental work will concentrate on improving the technique of seedling-production
and transplanting.
 The quality of the seedlings depends on the variety. Seedling production of two varieties, one
    commercial available op-variety and one hybrid, shall be tested.
 The production of seedlings will be done in three different ways: broadcasted on a seed-bed,
    sown in rows by hand or sown in rows by machine; next to this the use of multiseeded module
    transplants (group of 3 – 8 seedlings per module made with a banana leaf or trays based on
    organics material ) shall be tested.
 The optimal plant density in the production field depends on the variety and on the type of
    transplants (single plants or groups of plants). Two or three plant densities will be tested.
 To minimize the cost of labour, direct sowing of one variety will also be included in this project.
 Two varieties, one imported and one local variety, will be grown in order to compare the technical
    and economic results of TSS with traditional production.
 An economic evaluation will be made of the production of shallots from TSS in comparison with
    traditional production from seed-bulbs. This will be done for the different ways of seedling
    production, the different varieties and the different plantdensities. Gross margins per ha and cost
    prices per kg shallots will be calculated. All differences in labour requirements and inputs will be
    considered.

2008
 If the results of TSS are promising the seedling production and transplanting techniques will be
   optimized and be introduced in practice.
 If the results of TSS are not good enough, research on TSS will be stopped and research will be
   done on the production and storage of traditional seed bulbs.

Improving the production and storage of seed bulbs
 Control of bulb-transmitted diseases is an important factor in improving the quality of seed bulbs.
   Selection of plants which are infected by viruses can be an option.




                                                                                                    XIII
   Optimizing of the nitrogen fertilization is an important factor in improving the storability of seed-
    bulbs (too much nitrogen is reducing dormancy, is giving thick-necked bulbs, the open necks
    allow the entry of pathogens).
   The time of harvesting is important for the storability, different harvesting times will be used in
    the trial.
   Late application of water has a negative influence on storability. This will be investigated.
   The method of drying and curing of the bulbs have an influence on storability, the methods used
    by the farmers will be reviewed. On the basis of this information new improved techniques will be
    investigated.

8. Expected outputs and impacts:
           Output                                                        Impact

     2007       Identification of the priority bottlenecks in the           Promotion of the use of TSS
                 shallot supply chain
                Improved technique of seedlings-production
                Improved technique of transplanting the
                 seedlings from the nursery into the field
                Information about financial and technical
                 aspects of production from TSS and from
                 traditional production

     2008       Optimized techniques of seedlings-production                Promotion of the use of TSS
                Optimized techniques of transplanting the                   Promotion of better techniques
                 seedlings from the nursery into the field                    of production and storage of
                Improved techniques of the production and                    traditional seed-bulbs
                 storage of traditional seed-bulbs


9. Training and technology transfer/knowledge exchange:
    Year Subject                 Participant         Location                                  Organisation
                                 Organisation                                                  involved
    2007  Workshop on the  Growers and private  Bandung, West                                IVEGRI and
               identification of    companies in the    Java                                      APR-WUR
               priority             supply chain of
               bottlenecks in       shallots
               the shallot
               supply chain                                                                       IVEGRI and
             Workshop on         Extension          Brebes, Central                             APR-WUR
               shallot              organisation and    Java
               production from      farmers
               TSS

     2008       Workshop on             Extension                         Brebes, Central      IVEGRI and
                 shallot                  organisation and                   Java                  APR-WUR
                 production from          farmers
                 TSS
                                                                                                  IVEGRI and
                Workshop on set         Extension                         Brebes, Central       APR-WUR
                 production and           organisation and                   Java
                 storage of shallot       farmers




                                                                                                            XIV
10. Workplan 2007 and 2008:
    Time   Activity                                                                              Deliverables
    2007    Field visits, group discussion and inception workshop                                Overview
            Establish working arrangement with partners                                          Report
            Preparation of trials. Field experimentation. Evaluation of results

     2008            Evaluation of 2007 results and decision on activities for 2008,                 Report
                      either to continue with TSS or continue with work on traditional
                      bulb-seeds

11. Logframe project:
                  Intervention                   Verifiable             Source of            Assumptions
                                                 indicators             verification
     General               Improvement           Cost per unit         Economic                  Farmers are
     aim                    of shallot               is minimized           calculation              willing to
                            production                                                               adopt new
                                                                                                     technology

     Project               Optimal use              Less labour          Calculation of          Farmers are
     purpose                of TSS                    for seedling          the labour               able to use
                                                      production            cost in the              the methods
                                                      and planting.         nursery and              used in the
                                                      Survival of           planting                 trial
                                                      seedlings is
                                                      improved
     Results               Production of            Availability of      Protocol                The research
                            a protocol for            the protocol          published in             gives enough
                            using TSS                                       reports and              information
                                                                            papers                   for a protocol

     Activities            Research and             Availability of      Reports of              Research
                            knowledge                 reports               research and             activities
                            transfer to                                     workshops                carried out
                            farmers                                                                  together with
                                                                                                     co-innovators



12. Budget (Euro):
     Funds allocated for:                    2007                                2008

     Personnel costs                         30 500                              35 500

     Material costs                          2 500                               2 500

     Training/technology transfer            2 000                               2 000

     Travel                                  5 000                               5 000

     Others                                  -                                   -

     Total                                   40 000                              45 000




                                                                                                                XV
ANNEX 3. Itinerary Inception field visits and company workshop,

Indonesia, April 23 – May 2

 April 23   Final preparation of inception work.
 April 24   Travel to Brebes. Visits to fields and markets of shallots and hot pepper. Stay
            overnight in Brebes.
 April 25   Group discussion in Brebes with growers of shallots and hot pepper. Stay
            overnight in Brebes.
 April 26   Meeting with traders and exporters of shallots and hot pepper. Return to
            Bandung.
 April 27   Visits to growers, traders and markets of sweet pepper around Lembang.
 April 30   Discussion and summarising of findings of field and stakeholders visits.
            Preparation of workshop with companies. Visit to East-West Seeds Indonesia.
 May 1      Workshop with companies at IVEGRI (see separate programme).
 May 2      Discussion of company meeting and final planning of project activities for
            2007.




                                                                                          XVI
ANNEX 4. Programme multi stakeholder workshop May 1, 2007 and list of participants

Jadwal Inception workshop HORTIN-II, tanggal 1 Mei 2007


     Waktu                        Topik / aktivitas                               Pembicara

 08.30 – 09.00   Registrasi


 09.00 – 09.15   Pembukaan                                           Ir. Sri Sulihanti (PuslitbangHorti)

 09.15 – 9.45    Pengenalan program ko-inovasi dalam penelitian      Arij Everaarts
                 dan pengembangan

 9.45 – 10.30    Diskusi dan presentasi tentang teknik dan peluang   Marcel Stallen
                 ko-inovasi

 10.30 – 10.45   Coffee break


 10.45 – 12.15   Presentasi dan diskusi tentang potensi, masalah
                 dan peluang pengembangan dan penelitian:
                 - Bawang merah
                 - Paprika                                           Rofik Sinung Basuki
                 - Cabai merah                                       Nikardi Gunadi
                                                                     Witono Adiyoga

 12.15 – 12.30   Penjelasan tentang grup diskusi dari tiga           Nikardi Gunadi
                 komoditas sayuran                                   Marcel Stallen


 12.30 – 13.30   Ishoma

                                                                     rij Everaarts
 13.30 – 15.00   Grup diskusi tentang peluang ko-inovasi per         Rofik Sinung Basuki
                 komoditas sayuran dan kejasama dengan               Nikardi Gunadi
                 perusahan, peneliti dan petani                      Witono Adiyoga
                                                                     Marcel Stallen

 15.00 – 15.15   Presentasi hasil grup diskusi dan perencanaan       Rofik Sinung Basuki
                 kegiatan penelitian                                 Nikardi Gunadi
                                                                     Witono Adiyoga

 15.15 – 15.30   Penutupan                                           Ir. Sri Sulihanti
                                                                     (PuslitbangHorti)




                                                                                                           XVII
ANNEX 5. Presentations inception workshop



To be included in hard copy version of inception report




                                                          XVIII
ANNEX 6. Study tour programme

Co innovation for horticultural supply chains; A study tour to the Netherlands within the HORTIN II
framework for the introduction of co innovation in Indonesia

Participants:              Dr. Rofik Sinung Basuki; Dr. Nikardi Gunadi; Dr. Witono Adiyoga
                           (IVEGRI – Lembang)

Dates:                     Arrival: Saturday, May 12, 2007
                           Departure: Wednesday May 23

Accommodation:             Wageningen International Conference Centre (WICC)
                           Lawickse Allee
                           Wageningen (tel. 0317 - 490133)

Organized by:              Arij Everaarts (06 - 51539035) and Marcel Stallen (06 – 20606046)

Learning goals study tour
    1. Knowledge enhanced on how to initiate and facilitate a process of co innovation in a supply
        chain context using Dutch results. Translation of experiences to Indonesian circumstances as
        far as possible.

    2. Insight in capacities that are needed with researchers and private and public partners to work in
       a consortium on the basis of co-innovation. Better understanding of the roles of researchers,
       companies and service providers as well as government agencies in this process.

    3. Develop and discuss project proposals fitting in the HORTIN II programme, in accordance with
       the principles of co innovation, in consultation with Dutch project leaders.


Deliverables / results by end of study tour
    1. Three project proposals for the HORTIN II co innovation programme, developed together with
        Dutch project leaders based on the needs of selected Indonesian SME’s and identified farmers’
        needs.

    2. Study tour report containing an evaluation of the Dutch experiences with co innovation and
       demand driven research and the applicability under Indonesian circumstances.

    3. Recommendations and suggestions for implementation of co innovation and making the
       Indonesian research system more demand driven.


Before and at the end of the study tour (and at the end of week 1 ?), we will jointly evaluate learning goals and
progress.

It could (optionally) be organized to get feedback and comments on the draft HORTIN II proposals from Arjen
Monteny or the former director ACC (Center for Agro China competence) – optional (Jan van Roekel or Woody
Mayers)




                                                                                                                XIX
   Training Programme on co innovation in supply chains for IVEGRI project leaders
Date                     Topic                                                              With whom (and company)                       Places and organization
Monday May 14            Finalizing the programme, discuss learning goals and programme;    Stallen, Everaarts                            Wageningen,
9-10.30 hrs              logistical arrangements                                                                                          room 112 (1st floor)
10.30-12.30 hrs           Innovation in international supply chains;                       Sietze Vellema                                Wageningen International
                          Presentation of the international supply chain programme,        (sr. researcher and lecturer supply cahins
                              funded by DGIS and LNV;                                       and innovation,
                          Discussion.                                                      LEI – WUR)                                    Organization
14-16 hrs                 ACC practical experiences with co innovation projects;           Arjen Monteny                                 Marcel Stallen
                          Programme organization, set up and lessons learnt;               (previously senior project leader, Agro Chain
                          Do’s and don’ts with regard to co innovation.                    Competence Centre, and coordinator
                                                                                            organic programme)
16.00 – 17.30 Optional    Discussion about seed impact study                                Derek Eaton


day May 15                    Presentatie HortiSolutions and background information on     Programme prepared by Niek Botden             Wageningen,
8.45 – 18 hrs                  driving factors behind development of Dutch Horticulture     (director Horti Solutions BV)                 Transport and organization
                                                                                                                                          Niek Botden
                              Waalwijk,; Grow Technology Group;                            Antony Brouwers                               Waalwijk (Duikerweg 7A, 5145
                                                                                            www.grow-investments.nl                       NV Waalwijk)
                              Harmelen, Van Dijk / MidFresh / BGB;                         Nico van Dijk                                 Harmelen, Heldamweg 1,
                                                                                            http://www.vandijkbedrijven.nl
                              Beef tomato production company Van de Bosch;                 Bart van de Bosch                             Berkel en Rodenrijs, Petuniaweg
                                                                                            www.vleestomaat.nl                            28; Berkel en Rodenrijs

Wednesday May 16          Visit of young plant /seedling producer (Grow group)              Grow group, Richard Groeneweg                 Bleijswijk
9.30 – 11.00 hrs                                                                                                                          De Lier,
11.30 – 13.00             Rijk Zwaan supply chain approach and lunch                        Jan Doldersum                                 Zoetermeer

13.30 – 15.00             Commodity Board for Horticultural Products on co innovation and   Jaap de Vries (PT)                            Transport and organization
                          funding of research by producers and traders                                                                    Marcel Stallen
15.15 – 17.00 hrs         LTO Groeiservice and their role in setting research priorities,   Jaap Kester (secretary and manager farmer
                          funding of research and supervising research projects.            study groups)




                                                                                                                                                                       20
Date                Topic                                                                With whom (and company)                        Places and organization
Thursday May 17     Day off (holiday)                                                    Keukenhof - Amsterdam                          Own transport


Friday May 18          Visit PPO, presentations of successful co-innovation projects    Arij Everaarts                                 Lelystad PPO – AGV
9 - 17 hrs              by the PPO partners                                              Flip van Koesveld
                    Excursions to                                                        Herman de Putter and staff                     Transport and organization
                     ENZA (shallots ), Enkhuizen                                                                                       Arij Everaarts
                     Gitsels (nursery and young plant production

Saturday / Sunday   No programme                                                                                                        Wageningen
May 19 – 20         report and proposal writing

Monday May 21          Brief presentation of Wageningen Expertise Centre for Chain      Jacques Trienekens and Anja Kleijn             Wageningen,
9 -10.30 hrs            and Network studies (WCNS)                                                                                      room 112 (1st floor)
                     Discussion on cooperation and exchange of knowledge                                                               Wageningen International
10.30– 12.00        Facilitating researchers and private companies for supply chain      Monika Sopov
Optional            development; experiences from Thailand and Eastern Europe            (not yet confirmed)

10.30 – 16 hrs      Open for specialised subjects and visits following inception and     Yet to be decided in consultation with Dutch
                    writing project proposals                                            project leaders

16 – 18 hrs          Discussion on lessons learnt etc                                   Arij Everaarts, Marcel Stallen
                     Evaluation of study tour
19 - 21 hrs         Dinner with Jan Buurma, Andre de Jager, Marcel Stallen and Arij                                                     Arnhem or Utrecht
                    Everaarts (or Tuesday May 22 ??)

Tuesday May 22      Report writing and finalizing project proposals with Dutch project   Dutch project leaders and Arij Everaarts       Wageningen
8 - 17 hrs          leaders

Wednesday May 23    Wrapping up; finalising inception report and arrangements for        Everaarts                                      Wageningen
9 - 12 hrs          submission of project proposals.
                    Departure




                                                                                                                                                                     21
ANNEX 7. Report of study tour on co innovation in the Netherlands (DRAFT)

Witono Adiyoga, Nikardi Gunadi, Rofik Sinung Basuki

1    May 14, 2007             Sietze Vellema
     Some important points that could be picked up from the presentation:
             Market-led development schemes have become more important in responding to the
                 pressure of decreasing financial support for public research institutions. As
                 consequence, some changes in the chain formation are necessary, in which the supply
                 chains, entrepreneurs and networks between public and private parties should become
                 more and more actively involved in development processes.
             The driving force behind closer interaction and coordination throughout the chain is
                 mainly the avoidance of unnecessary costs. If we approach chain formation from the
                 point of view of the interests of producers and business partners, the chain
                 configurations are far from simple and that there are numerous choices to be made
                 regarding the structuring of innovation processes, market development and
                 collaboration.
             In summary, there are two approaches suggested for innovation and development; those
                 are the National System of Innovation (NSI) and the Bottom of the Pyramid (BoP). Both
                 approaches emphasize that technological innovation evolves from institutional
                 interactions within a network of public and private actors as well as with customers in
                 locally embedded markets
             NSI takes a more open-ended perspective, emphasizing the importance of interactions
                 and intermediary organizations connecting different capacities. While BoP pays more
                 attention to the selection of technological alternatives and relates this to the articulation
                 of users’ demands in specific markets. A combination of both approaches may lead to
                 institutional modalities for technological change in agri-food chains, which build on
                 socially embedded capacities and local market demands.
             Obviously, there is no blue print for this, but some topical terrains for arranging
                 technological change in value chains differently are suggested in the following table:

Two frameworks to innovation and development.

                                       National System of Innovation         Bottom of the Pyramid (BoP)
                                                    (NSI)
Value Chain Configuration           Focus on the interactions             Focus on the articulation of
                                    between users and producers of        demand of customers in low-
                                    knowledge and technology              income markets
Enabling Environment of a value     Focus on systemic changes and         Focus on managing constraints
chain                               invest in intermediary functions      and tailoring business models to
                                    linking distributed capacities        socially embedded market
                                                                          opportunities
Technological Innovation:           Produce options through               Start from demand pull for
Balancing Push and Pull             experimentation and evaluation in     reengineering (existing)
                                    an evolving network                   technological innovations




                                                                                                                 22
2            May 14, 2007             Arjen Monteny (Agro Chain Competence Center = ACC)
                    ACC is an intermediary institution initiated by MOA with a mission of realizing solutions for
                     complex system innovations in (inter) national agribusiness networks
                    ACC is building bridges to create added value chain through connecting the knowledge circle
                     and the market circle; and emphasizing the idea of co-innovation + partnerships

INNOVATION TYPES

                                                   Number of changing variables
                                                   Number of involved organizations




                     •      Process

                     •      Product
Complexity




                     •      Market


                     •      Chain

                     •      System




             Bottlenecks in chain co-operation:
                  • Technical: language, common understanding; defined and quantified goals
                  • Organization: degree of thinking along; knowing the network; difference in decision speed
                  • Relational: trust (from emotion to reason); communication
                  • Personal: ability to co-operate; knowledge of and empathy for other partners

             Fail and success factors of chain projects:
                  • Success factors: complementary competencies; commitment; openness (communication);
                      trust
                  • Fail factors: wrong expectations; disappointing results; mutual competition; new participants
                  • Guidelines: clear goals for the co-operation; agreements division expected costs and profits;
                      create commitment from all project participants; attention for power structures and
                      communication; mutual understanding for differences in culture; independent/ neutral project
                      co-ordinator

             Thus, value chain co-operation is:
                 • All links working together
                 • Economical alliance
                 • Sharing risks
                 • Investing together (systems and change)
                 • Information sharing and transparency
                 • Different every time: no blueprint, only guidelines
                 • Attitude, culture, processes, organization
                 • Tailor made: strategic, organization, network
                 • Not tied to organizations’ borders




                                                                                                                     23
3        May 15, 2007            Niek Botden (HortiSolutions)
            •    A private business/organization that provides a service to bridge knowledge sources
                 (universities and research institutes) with the market chains
            •    The main objective of co-innovation is supply chain optimization that covers: product
                 responsibility (product safety and traceability); chain transparency (ICT systems);
                 sustainability (energy, pesticide use, organic production); cost price cutting by automation,
                 etc.; specialization, up-scaling and internationalization
            •    An example of co-innovation facilitated by HortiSolutions is the incorporation of plant
                 physiology in flower quality management. In this case, the first step is focusing on product
                 quality improvement, and then followed by some institutional improvements of the supply
                 chain. The following table describes the coverage of quality improvement carried out:



                 Producer               Trade                Consumer
Profit                                  Branding                              Commercial quality


Planet                                  Labeling                              Environmental quality



People                                  Certification                         Social quality




4        May 15, 2007            Antony Brouwers (Grow Technology Group)
            •    A private company developing innovation/technology for protected cultivation (LED, software)
                 from unutilized existing knowledge, especially research results that often stay on the shelf (as
                 a research publication)
            •    Not only accommodating consumer’ needs for demand driven technology, but also
                 interpreting consumer’ wishes for demand driving technology.
5        May 15, 2007            Nico van Dijk (Van Dijk, MidFresh/BGB)
            •    A private company growing mostly sweet pepper that has established horizontal integration
                 (unite growers) and vertical integration (exporter)
            •    Alliances with other growers covering 250 ha of glass houses that grow sweet pepper (120
                 ha), cucumber (60 ha) and tomato (70 ha)
            •    Products are mostly exported (70%) and the remaining 30% is marketed domestically
            •    It has a grading station that may serve 30 ha of vegetable produce everyday
            •    This company has a relatively short, closed and efficient supply chain

6        May 15, 2007            Andy (Kwekerij Jami CV Trostomaten)
            •    A grower of tomato that occupies 3 ha of glass houses
            •    It receives an exclusivity from a seed company to produce yellow tomato
            •    Produce is mostly exported to other European countries and USA through the greenery

7        May 16, 2007            Jaap de Vries (Product Board for Horticulture)
             •    A public law business organization in which all horticultural businesses contribute (by paying
                  levies) to the joint activities in order to strengthen the chain.



                                                                                                                    24
         •   Budget that comes from levies is then spent for: promotion (38%), research (20%), quality
             (14%), environment (7%), energy (5%) and others (16%).
         •   Procedure for research funding: (1) branch office of specific crop prioritize the problem and
             submit to product boards, (2) product boards contact research institute for the possibility of
             working on solution to the identified problem, (3) private company and research institute
             write a proposal and submit it to the product boards, (4) proposals are reviewed and
             evaluated by Research Advisory Boards that meet 4 times a year, (5) proposed research
             topic and budget approved or disapproved

8    May 16, 2007           Jaap Kester (LTO Groeiservice)
        •    LTO is an association of professional growers that forms the knowledge component of the
             horticultural network. Its missions are (1) helping growers to expand their knowledge in
             growing techniques, chain management and organizational management, and (2) lobbying in
             the interest of growers
        •    About 6000 of growers of cut-flowers, pot-plants, bulbs and vegetables are automatically
             connected to lobby organization
        •    Member of this organization may get research funding by submitting proposal to Product
             Boards.

9    May 16, 2007           Richard Groenewegen (Grow Group)
        •    Grow Group specializes in raising vegetables plants for glasshouse and open field cultivation.
             The nurseries are not only established in several places in Holland, but also in Germany,
             Switzerland, Hungary, Morocco and Turkey
        •    Continuous improvements of plant materials or seedlings are carried out mostly by the
             company’s R&D jointly with the public research institutions, especially for organic plants.

10   May 16, 2007           Rijk Zwaan Seed Company
        •    RZ specializes in breeding and supplying vegetable seed for commercial cultivation in
             glasshouse, polythene tunnel and outdoor. It is among the top 10 largest vegetable breeding
             companies in the world.
        •    RZ has several breeding stations in the Netherlands, Germany and Australia (temperate
             climate zone), France, Hungary and China (land climate zone) and Spain and Turkey
             (Mediterranean climate zone)
        •    RZ has its own gene-bank and a strong R&D mainly in upstream research
        •    Some innovations in product development (Salanova lettuce) are also developed jointly by
             RZ and supermarkets.

11   May 18, 2007           Seedling producer Gitsels
        •    This company is much smaller than Grow Group and operating in 4 ha of glasshouses
        •    It sows Brassicae in October and Chrysanthemum in the next September
        •    The number of varieties and seedlings produced are very much depending on growers’ order
             (contract)
        •    Even though it is much smaller than GG, but apparently it is more open and transparent for
             visitors in giving detail operational information.

12   May 18, 2007           Enza Zaden Seed Company
        •    EZ is a big seed company specializing in breeding and supplying vegetable seed for
             commercial cultivation in glasshouse, polythene tunnel and outdoor.
        •    EZ has several breeding stations around the world and owns 50% shareholders of Ewindo.
        •    EZ has its own gene-bank and a strong R&D mainly in upstream research



                                                                                                              25
Lesson learned:
• The co-innovation approach is actually not a new concept in horticultural research in Indonesia. This
   approach has been used, for example, in participatory breeding program for the last five years. Research
   institute and private company jointly evaluate some promising lines and select the best one suits both
   parties. The arrangement of this co-innovation varied depends on the agreement made by both parties at the
   beginning of the co-operation. Usually, the research institute will contribute in terms of promising lines and
   expertise, while the private sector will finance all expenses for the experiments. By the end of the joint work,
   breeder from research institute has the rights for releasing the variety and the private company receives
   exclusivity in multiplying/propagating seeds/plants and selling them for a certain period of time agreed. The
   evaluation of the program so far shows that the success is mostly achieved for ornamental crops. This is
   mainly due to the characteristics of the crop, business and the ornamental market that are quite different as
   compared to fruit and vegetable.

•   Even though the co-innovation in Indonesia is carried out mostly for breeding materials or varieties, the
    approach could be also potentially adapted and implemented for other technologies. A critical thing that
    needs immediate attention is a concerted effort for strengthening the supporting infrastructure and
    establishing the enabling environment of co-innovation along the supply chain. Furthermore, there should be
    a way to overcome lacking of interface to ensure the translation of generic R&D into tangible technological
    uses for small and medium enterprises, including producers/growers, through application research and
    product development. This needs an institutional modality capable of balancing pull and push factors,
    incremental changes solving immediate problems and strategic innovations, as well as short term and long
    term processes.

•   An intermediary organization bridging knowledge circle and market circle is necessary to speed up the co-
    innovation between public and private sector. At least this intermediary may save both public and private
    parties from administrative burden.

•   Improvements in products and/or technologies should be simultaneously supported by the supply chain
    improvements, through both horizontal integration and vertical integration.




                                                                                                                26
ANNEX 8. Summary of agreements on the follow-up of the HORTIN programme

(Terms of Reference)

1.      Jointly the following supply chains have been selected:
         Shallots, lowlands
         Sweet pepper under protected cultivation, highlands
         Hot pepper, lowlands
2.      The Indonesian project leaders, Andre de Jager and Arij Everaarts, will form a team that will implement
        the inception phase of the programme.
3.      The inception phase of the project is planned for the second half of March 2007.
4.      In the inception phase, the team will conduct: (a) an analysis of the supply chains mentioned, (b)
        establish the bottlenecks in these supply chains, (c) identify and rank topics for research and
        development co-operation and impact in the supply chain, and (d) invite involvement of Indonesian
        companies.
5.      The inception phase starts with an inventory of available literature, visits will be made to the field, to
        post-harvest operations, to marketing channels and to horticultural enterprises. A meeting will be
        organised with company stakeholders to solicit co-operation.
6.      The result of the inception phase is a document that describes the supply chains mentioned and details
        the choices and motivation for the topics in the co-operation in the projects and in the co-innovation with
        companies.
7.      The composition of the Dutch project team will be decided by the programme management, after the
        inception phase, when the subjects for co-operation have been identified and based upon the required
        expertise.
8.      After the inception phase (April), the Indonesian project leaders will make a compact study tour to the
        Netherlands, to study co-innovation processes with companies in theory and practise. At the end of this
        study tour, the Indonesian and Dutch project team members, will jointly finalise the project descriptions
        for the co-operation according to formats agreed upon.
9.      These project descriptions will be submitted to the agricultural attaché for final approval, after which the
        activities in the projects can start (May 1st).

Agus Muharam
Arij Everaarts

09-02-2007




                                                                                                                 27

								
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