Development of cassava on the degraded land west kutai english by Green Growth Program

GLOBAL GREEN GROWTH INSTITUTE MAY 2014

Summary

Business Plan Development of Cassava on the Degraded Land, West Kutai

Writers: Alfan Subekti Abdul Fatah Fariyanti Eddy Mangopo Angi Copyright of Global Green Growth Institute Indonesia Country Office May 2014

Summary

One of the key green growth activities identified by the Governor is to seek sustainable use of degraded land across the province through community enterprises. In particular, there are a number of small pieces of degraded land (between 1 and 500 hectares). As part of the MoU, the Governor has asked GGGI to explore the options that are available to establish sustainable, community enterprises on these pieces of small-scale, degraded lands as part of the provinceâ&#x20AC;&#x2122;s green growth strategy.The objective of this work is to inform the East Kalimantan Government and other key stakeholders of the options for promoting sustainable SMEs on small-scale, degraded lands across the province. Benung, a village in the upstream West Kutai District, East Kalimantan, is a selected locationto demonstrate the cassava with potential area of 25 hectares. However, the project will only use 20 hectares for demonstration purpose. The village is administrated under Damai sub district. The location for demonstration plot according to Cartography Laboratory of Agriculture Faculty of Universityof Mulawarmanis under the land system of Barong Tongkok (BTK) and Hapludults Dystrudeptssoil type, where it has fairly land chemical fertility and good land physical and biological fertilities. This land system has land appropriateness for several commodities i.e. upland farming, agroforestry, oilpalm, cacao, rubber (including cassava), coconut, coffee, pepper, etc.n. Moreover, the farmers (mostly Dayak Benuaq) who will be involved in this project are mostly experience in cultivating cassava. An organic approaches of the cassava cropping in the demonstration could maintained the soil fertility over the period of the project term. The goal of organic giant cassava demonstration plot is mainly to generate a local income by utilizing the degraded or marginal unproductive lands in Benung village and surrounding in Damai sub district.The product of this business plan is dried organic cassava chips, produced from organic giant cassava or singkonggajah (Manihot esculentaCrantz). At the village level,the product price is varying in between IDR 800-1,000/Kg at farmer level. Meanwhile the price at industry level is in between IDR 1,500-2,500/Kg. Dried cassava chips produced from the demonstration plot will be mainly marketed to the industry in sub district of Bongan and Kota Bangun, and probably Paser. Partnership with MasyarakatSingkong Indonesia (MSI) will be opened since the first year, and MSI has committed to support the project. Total fixed assets investment is IDR 204,500,000 and cash financing for operational cost during 10 years is IDR 4,486,983,268 per 20 Ha or IDR 224,349,163 per ha. The operational cost includes seed, fertilizer and as well as labor. So overall, the cassava project during the 10 -year project requires an investment fund of IDR 4,691,483,268 or IDR 234,574,163 per ha. Break event point analysis shows that the project will reach BEP IDR 277,355,782 or389,691 kg for 20 ha. NPV shows a positive value and meaning that the cassavaproject is feasible to be implemented. Meanwhile IRR reaches 10.076% and it is above the deposit interest rate (6.00%/year). While the ARR value of 43.82% is a percentage value that is higher than the expected profit (expected profit rate is 10%). Payback period shows that investment for the cassavaproject will be totally returned to the bank after 8 years (PP is 6.37). The project requires an enormous financial support. Based on the calculation and analysis show that financial institutions only provide operating funds for each year, and the remaining will be provided by local governments. Total fund for fixed assets that should be provided by local government program is IDR 204,500,000for 10 years project duration.Others (operational costs) will be supported by financial institution. Bank Kaltim has committed to support this project.

Summary Management and organization for cassava project will include:

Main important point in this project is the use of solar energy to generate the water pumps in the demonstration areas. The project will install solar photovoltaic to generate electricity for water pumping use. There will be four water pumps installed in the 20 hectares of demonstration plot to store 5000 liters water from each of four artesian wells. Each water pump will be supplied by 350-500 watt from solar panel installation. The solar panel system and its installation will be provided by local government as a part of fixed assets. During installment, the project will request the contractor to provide a short training of maintenance for local farmers. It avoids miss used by local people causes damage or mal function as usual occurred in other solar PV project in remote areas. With total consumption as above per water pump, the project will substitute the use of electric generator with solar panel that will be clean from emission. Total emission reduction per water pump by using solar panel system will be 35,156.80 KgCO2/month1 or 1,757,839.72 KgCO2 per harvesting period for all demonstration area.Within the total project 20hectares, potential of carbon stock from the demonstration project is predicted 2.844 â&#x20AC;&#x201C; 83.96 tC.

of Contents

Executive Summary ........................................................................................................................... 2 Table of Contents............................................................................................................................... 4 List of Table ....................................................................................................................................6 List of Figures .................................................................................................................................6 List of Appendixes .........................................................................................................................6 I.

Introduction ............................................................................................................................... 7 I.1.

Selected Site Location and Details.................................................................................... 7

I.1.1.

Location and size of the site.......................................................................................... 7

I.1.2.

Reasons for selecting the site .......................................................................................8

I.2.

II.

I.2.1.

Ecological status ............................................................................................................9

I.2.2.

Socio-economic status ................................................................................................. 10

I.2.3.

Legal status ................................................................................................................... 11

Overview of Sustainable Development ...................................................................................12 II.1.

Products and/or Services ..................................................................................................12

II.2.

Mission Statement, Goals and Objectives ...................................................................... 13

III.2.1.

Mission Statement ................................................................................................... 13

III.2.2.

Goal and Objective ................................................................................................... 13

II.3. III.

Relevance to East Kalimantan ......................................................................................... 14 Market Assessment ............................................................................................................. 16

III.1.

External Analysis of Market Conditions.......................................................................... 16

III.2.

Potential Customers .........................................................................................................17

IV.

Current Status (Ecological, Economic, Social and Legal) ................................................9

Finance ................................................................................................................................. 18

IV.1.

Financial Projections ........................................................................................................ 18

IV.2.

Financial Planning ............................................................................................................ 19

IV.3.

Assumptions..................................................................................................................... 20

IV.4.

Risks and its Solution ....................................................................................................... 20

Strategic Implementation ....................................................................................................... 22 V.1.

Operations........................................................................................................................ 22

V.1.1.

Steps of work ........................................................................................................... 22

V.1.2.

Time Frame of Production ....................................................................................... 23

V.2.

Resources and Equipment .............................................................................................. 24

V.3.

Management and Organization ...................................................................................... 24

V.3.1.

Farmer organization ................................................................................................ 25

V.3.2.

Business unit ............................................................................................................ 25

of Contents V.3.3. V.4.

Credit Unit ................................................................................................................ 25

SWOT Analysis.................................................................................................................. 26

V.4.1.

Strengths .................................................................................................................. 26

V.4.2.

Weaknesses.............................................................................................................. 27

V.4.3.

Opportunities ........................................................................................................... 27

V.4.4.

Threats ...................................................................................................................... 27

V.4.5.

Business Development Strategies .......................................................................... 28

VI.

Green Growth Benefits ........................................................................................................ 30

VI.1.

Greenhouse Gas Emission Reduction ............................................................................. 30

VI.2.

Sustained Economic Growth ........................................................................................... 30

VI.3.

Healthy and Productive Ecosystems............................................................................... 30

VI.4.

Inclusive and Equitable Growth ...................................................................................... 30

VI.5.

6.5. Social, Economic and Environmental Resilience ..................................................... 31

Appendix .......................................................................................................................................... 32

of Contents

Table 1. Fixed assets investment ..................................................................................................... 18 Table 2. Operational Cost of Cassava Project during 10 years ....................................................... 18 Table 3. Finance projection for the cassava project ...................................................................... 19 Table 4. Analyses of NPV, IRR, Payback Periods, ARR, and PI ....................................................... 19 Table 5. Time frame of activity ........................................................................................................ 23 Table 6. Step of work related to the quantity of labor, time frame and cost .............................. 24 Table 7. SWOT analyses of Manihot esculenta demonstration project in Benung, West Kutai ... 27

Figure 1. Map of Demonstration Area in Damai ............................................................................... 7 Figure 2. Demonstration Plot in Benung........................................................................................ 10 Figure 3. Cassava cultivation by local community ........................................................................... 11 Figure 5. Organization and its unit within the CBO ........................................................................ 25

Appendix 1. Financial Analysis of Aren plantation in Gunung Rempah......................................... 32 Appendix 2. Financial Analysis Resume .......................................................................................... 34 Appendix 3. Fixed Assets Analysis .................................................................................................. 36 Appendix 4. Break Event Point Analysis ......................................................................................... 37 Appendix 5. Soil Map Unit of West Kutai ....................................................................................... 39 Appendix 6. Land System Map of Damai ...................................................................................... 40

Bappeda and DDPI have selected West Kutai or Kutai Barat (KuBar) as the study area for this assignment. Historically, West Kutai or Kutai Barat (KuBar) was established in November 1999 as a result of Kutai district expansion based on Law No 47/1999. With total area of 31628.70 km2 or approximately 15 percent of the area of East Kalimantan, KuBar is occupied by 165,934 people. This district is divided into 21 sub-districts and 238 villages (but then in the mid of 2013, this district was split up into other new district “Kabupaten Mahakam Hulu”). Location of villages in the area is generally located at the banks of the river (more than 100 villages), in the plateau region (about 86 villages) and the slope/ridge (18 villages). Specifically, the study was established in three sub districts (Kecamatan) including Damai, Jempang and MookManaarBulatn. KecamatanDamai was chosen as demonstration area for this cassava business plan. The location to develop cassava Manihot esculenta(or locally known as Singkong Gajah) is located in Damai sub district, West Kutai. Geographically, Damai is located at 115015’ 16”115046’ 54” East Longitude and 00 18’- 00 52’ South Longitude. Total area of Damai sub district is 1.750,43 Km² and includes 16 villages which are occupied by 9,625 people (2,781 households) with average number of people per household is 3.59. Meanwhile, Benung is a selected location to demonstrate the cassava with potential area of 25 hectares. However, the project will only use 20 hectares for demonstration purpose. The location belong to farmers group2 (village government-owned status) which formerly used for rubber project from government. Currently the area is covered by alang-alang grass and fern vegetation. No any potential harmful toxic substances in the soil rose from land cut and fill activity, such as mining.

The reason to select Benung Village in Damai as the main area for demonstrating Manihot esculenta includes:

Damai is a sub district closer to the Melak and Barong Tongkok as main towns in West Kutai. Distance from capital town of West Kutai to the capital of sub district is

approximately 42 Km. Meanwhile the distance of Benung to the Damai Kota as a capital sub district is 18 Km or 30 Km to the capital town of West Kutai. Main road condition is good (asphalt) and easily accessed by car.

The location for demonstration plot is under the land system of Barong Tongkok (BTK) where it has fairly land chemical fertility and good land physical and biological fertilities, as well as appropriate for ‘tanaman bergetah’ rubber crops (Euphorbiaceae family) such as rubber and cassava. Intensifying the soil with organic and mechanical treatments will improve the soil fertility of the demonstration plot. The cassava (Manihotesculenta)is a variety categorized as C4 (similar with corn, sorghum, and sugarcane) which requires direct sunlight. The photosynthesis process at normal condition is very high, photo-respiration is very low and efficient in water use. Therefore, cassava is mostly suitable for marginal or degraded lands naturally, moreover with intensive organic matter input to the soil, the soil fertility could be maintained.

Most of the ethnic in Benung is DayakBenuaq and the farmers in Damai commonly plant cassava as pig food, particularly local farmers in Benung who has planted cassava in decades. Besides cassava, the local farmers also cultivate vegetables and fruit for subsistence or selling to the companies near the village or sub district.

Market of cassava can be divided into three categories: Market for cassava industries; Market for fodder; and Market for local consumption. Market for cassava industries is the main targeted market. Factories have been built in Bongan and Kota Bangun (KutaiKartanegara). Capacity of factory in Bongan (that takes about 2 hours drive from Benung) is more than 1,500 Ton/month and to fulfill full capacity the machine requires more fresh raw materials from other surrounding villages. Several other cassava factories are also built in Kutai Kartanegara District (Sanga-Sanga andMuara Kaman sub districts) and recently in Paser District. It is still possibly the local investors build the factory near the main town of West Kutai since the potential is still high.

Since Manihot esculenta (singkonggajah) is a local species who was firstly introduced by Prof. Ristono from University of Mulawarman, Governor of East Kalimantan in 2013 has announced a provincial program to cultivate singkonggajah (called ‘a billion cassava crops planting’) in all districts to improve the income of local community and utilize the marginal/degraded lands.

Damai sub-district is located in the southern part of the Mahakam River. Damai divided into 16 villages.Most of them (11 villages) are located at the valley or river bank.Remaining are at plain area. And from the forest location perspective, all villages are located outside the forest area (Damai Sub District in Figure, 2013).

As commonly found in West Kutai, the land cover condition in Damai Sub District is still dominated by young secondary forest and bush. It was resulted by shifting cultivation practices.In some areas, old unproductive rubber trees are easily found. Almost all households have home yard â&#x20AC;&#x2DC;forestâ&#x20AC;&#x2122; (called lembo) that content of various forest and fruit trees, as well as seasonal vegetable crops. The location for demonstration plot will be located in Benung village which used to be a rubber plantation a few decades ago. The land cover is alang-alang(Imperata cylindrica) and fern bush and sometime is used by local community as the area to plant upland rice. The topography is mostly flat. The distance from village is not far (about 2.5 km) and this would be easierfor local community, in term of accessibility, toobserve the demonstrated commodity. Based on the spatial analysis using reference from GIZ and WWF, approximately the total degraded land in Benung reaches 60% from total area of village. Although it is still small compared with degraded land in sub district level (108,523.46 ha or 62% from total area of Damai). The location for demonstration plot is under the land system of Barong Tongkok (BTK) and under SPT (soil map unit) 6 of Hapludults Dystrudepts soil type3. This type of soil is composted from sediment under relief tectonic plain (with slope 3-8%). The BTK land system is appropriate for several agriculture commodities i.e. upland farming, agroforestry, oilpalm, cacao, rubber (including cassava), coconut, coffee, pepper. Total occupant of Benung village is only 108 households consisting 345 people: male 183 and female 162 (or 3.58% of total sub district population). Density rate of this village is 2.03 person/km2. Related to the agriculture, the number of farming household in 2013 is 85%. These farmers work for upland rice, and some of them cultivate rubber, vegetables, including cassava in many villages, such as JenganDanum, MuaraTokong, Tepulang, and Keay. The cassava planted is usually used for feeding their livestock (pig). Regarding the employment, there is no data available for unemployment level in this village. Despite as farmers, other livelihoods are as teacher at Primary School, nurse and midwife. In Benung village, according to the data from Damai Sub District in Figure (2013): there are relatively few number of families under poverty group, merely 9 families (of total 108 families in sub district).

As mentioned previously that village of Benung and other villages surrounding basically having similar agricultural practices, especially upland rice where it is the most common livelihood of local community. Size of local dry rice field is ± 75 Ha with average productivity still below 1.50 ton/Ha rice4. Other important commodity as family’s source income is rubber. Total plantation in Benung is ± 100 Ha and average productivity is 0.85 ton/Ha. At sub district level, total rubber plantation is 1,235 Ha with production of 792.42 ton and productivity of 1.05 ton/Ha. In regard to market location, Benung village is relatively close to market in big towns of Barong Tongkok (accessed by road about 20 Km) and Melak (accessed by road about 30 Km). These two local markets are for cassava consumption. Meanwhile to the market in Bongan sub district, it will take about 3 hours’ drive. Mostly lands in Benung have been permitted to third parties including forest and rubber private companies. About 30-45% of the area belongs to the local community (and village government), and utilized as cultivating fields or crops plantation. Location for demonstration plot of cassava plantation belongs to the farmers group (village government-owned status) which formerly used for rubber project from government. Currently the area is unproductive due to its land cover is only alang-alang and fern bushes. Related to the conflict on this demonstration site, there is no land conflict, both among farmers and other outside parties. The land for develop demonstration plot is non-forest area or APL. All the lands are belong to the farmers in Benung. Clean of conflicts in this area either among farmers or with other parties such as rubber companies, oil palm companies or coal mining companies.

of Sustainable Development

The product of this business plan is dried organic cassava chips, produced from organic giant cassava or singkonggajah (Manihot esculentaCrantz alias Manihotutilissima Pohl.). For the local farmers in the village, this product is not a new thing since they have been used to produce cassava and organic farming. The only new is the cassava variety that uses the giant root tuber. Process of producing giant cassava chips production by local farmers is a simple process. It is derived from harvesting the fresh cassava root tuber from 8â&#x20AC;&#x201C;10 month olds crop. This tuber then chopped in small slices and dried using natural sunrise for about 3-5 days. The dried cassava chips is then packaged into the sack (25 kg sack normal size), and ready for transporting and marketing. Despite the root tuber as main product, the cassava itself offers other several economic benefits, such as the young leaves have high protein as vegetable, all part of cassava leaf is also for feeding livestock, the stem can be used to build fence for crops, firewood or source of organic material for composting. Meanwhile, the derivate products of cassava tuber are to make fermented cassava snack or tape, secondary food gaplek (dried cassava chip), tepunggaplek (dried cassava flour) and as source of raw material for industries (food and textile) and bio ethanol energy. However, these economic benefits are beyond the coverage Box 1. Solar Panel System for Water Pump of this business plan The project will install solar photovoltaic to generate electricity demonstration, and therefore to for water pumping use. There will be four water pumps be suggested as potential future installed in the 20 hectares of demonstration plot. Each water steps to be considered. pump will be supplied by 350-500 watt from solar panel installation.

If the product is compared to other products at the local West Kutai District, the Benung organic cassava chips will have different variety (giant cassava compared to normal cassava root tuber), and therefore having different product quantity and quality (especially different for starch content). Other differences include using solar panels that will be provided by the project to provide soil water for the process of watering. And also this product will be sold to cassava processing factory in other sub districts (Bongan in West Kutai or Kota Bangun in KutaiKartanegara District).

Each set of solar photovoltaic system will consist 2 panel of photovoltaic with capacity 50 watt peak (WP) per panel. It will be completed with digital controller and power inverter with capacity 500 watt maximum. The electricity will be produced by a maintenance free battery with capacity 100 AH (Ampere Hour). With above system, the solar panel system will supply electricity for a water pump which consumes about 250 watt powers from battery. The solar panel system and its installation will be provided by local government as a part of fixed assets. During installment, the project will request the contractor to provide a short training of maintenance for local farmers. It avoids miss used by local people causes damage or mal function as usual occurred in other solar PV project in remote areas.

of Sustainable Development In regard to using the solar panels for watering, the project will install several solar panels as electricity source to absorb the soil water through piping from well. The water will be stored temporarily at several containers (capacity Âą 5,000 liter each) and then will be distributed for to water the crops. Since the solar panel will be operated by the farmers themselves, they still could use the water for other watering uses, such as vegetable crops, or even for domestic daily uses. This practice can support the implementation of green program in the district. According the data (Damai Sub District in Figure, 2013), most of the community in 13 villages still use water from river for their daily consumption, whereas other 3 villages using soil water, and still no clean water supply from the local government or PDAM. This project could provide simple demonstration in using solar panel to provide soil water for community so community could learn and apply for themselves.

The demonstration of organic giant cassava farming to produce dried cassava chips will be developed in KampungBenung, KecamatanDamai, West Kutai District, Province of East Kalimantan, with total area of 20 hectares. Government of West Kutai with strong and close cooperation with Global Green Growth Institute and some other key financial stakeholders will develop the cassava plantation demonstration plot. The partnership will commit to introduce and develop a demonstration plot for the cassava plantation demonstration plot particularly on the marginal or degraded lands, supportive facilities and develop market linkages as well as farmers institutional strengthening. This business hopes to achieve improvement of sustainable uses of degraded land and increase local farmerâ&#x20AC;&#x2122;s income simultaneously.

The goal of organic giant cassava demonstration plot is mainly to generate a local income by utilizing the degraded or marginal unproductive lands in Benungvillage and surrounding in Damai sub district with environmental treatments to produce healthy and sustainable farming products. Regarding the target, the farmer family will be targeted to haveadditional income and not to be categorized as poverty family. Based on the Sub District of Damai in Figure (2013), there are only 9 families (of total 108 families in sub district)categorizedunder poverty group. Unfortunately there is no cassava statistical data for this commodity at sub district or village level. However, by using 20 hectares degraded lands for cassava organic farming, the production of cassava in Damai will increase. And more importantly that the degraded land in the village is used for productive farming. Meanwhile the objectives include:

of Sustainable Development Concerning the time frame of the project, with the intensive supervision and monitoring, those above objectives are expected to be achieved after the completion of the project. In order to make baseline data before the project enter and after the project intervention, a pre and post-project socio-economic surveys are suggested to be carried out.

Cassava and rice as staple foods in Indonesia have close correlation. Indonesia has met the needs of self-sufficiency of rice in mid 1980s, but since then, the central government faces big efforts to maintain that achievement. This situation is also similar in East Kalimantan (Kaltim) province. To date, this province still imports 17.25% of total rice demand from other provinces. Rice which contains of carbohydrates is the main staple food of this province. The availability of carbohydrates can actually be also covered by cassava. With special processing, cassava can be converted into rice cassava. Compared to paddy rice, cassava rice is more superior due to although it has similar carbohydrate content, the sugar content of rice cassava is lower, and hence, cassava rice is best eaten by the diabetics. Data from Food Crop Service Agency of East Kalimantan Province (2009) shown that total arable upland in East Kalimantan is 2,861,116 Ha and area of cassava planted is only 7,932 Ha, with productivity of 16.03 ton/ha. East Kalimantan still has significant potential land to develop agriculture with 518,593 Ha (consists of 375,198 Ha in APL zone and 143,195 Ha in KBK zone) (source: Rembuk Membangun Komitmen Bersama Mewujudkan Ketahanan Pangan di Kaltim dan Kaltara di Lamin Etam, 28 January 2014). Moreover, degraded lands from ex coal mining exploitation in East Kalimantan are abundant and this could also potential for cassava development. Last year (2013), the East Kalimantan government launched 1 billion of cassava trees planting program, giant variety. This program has connection with food diversity campaign as part of rice self-sufficiency program. This launching is more special due to the giant variety of this cassava was found by local lecturer/researcher of UNMUL (Prof. Ristono) and from here, nowadays this variety is to be the main source of plant material for propagation at national level. Currently, the BPTPBalai Pengkajian Teknologi Pertanian (Agricultural Technology Assessment Centre, at province level of East Kalimantan) has been investigating the usage of post coal mining area (PT Kitadin) in Embalut Village, Tenggarong Seberang Sub District of Kutai Kartanegara, for developing edible food crops (including giant cassava, water melon, papaya, etc.). The research results is so far promising and is ongoing for setting up the location specific technology package. In addition, the Governor joined in several other occasions dealing with the operation of cassava factories. Such as in July 2013 in MuaraJawa sub district of Kukar, governor dealed with cassava factory (capacity 60 ton/day), and in June 2012 in Sanga-Sanga of Kukar for cassava-based ethanol factory (capacity 5,000 liters ethanol/day). In the coming years, other cassava-based product factories will also be installed in many sub districts of Kukar (Kota Bangun, Loa Janan, TenggarongSeberang, Samboja, and Muara Kaman), Kutim District and Paser District. All of these indicate the potential markets for cassava in future. Cassava has big potential to develop since it is tropical native crops and thus well suited and adaptable to West Kutai climate and soils. Moreover, this commodity is simple and easy to grow and has wide range of soil acidity and fertility to grow. Apart of that, this crop relatively not much affected by pests and diseases during its growth. In connection with the spirit of Kaltim green through a program of â&#x20AC;&#x153;one man five treesâ&#x20AC;?, the demonstration project of cassava plantation in Damai could reduce and minimize emission and rehabilitate degraded lands.

of Sustainable Development

Assessment

For marketing, the price of giant cassava is varying in between IDR 800-1,000/Kg at farmer level. Meanwhile the price at industry level is in between IDR 1,500-2,500/Kg. It will depend on the distance of transport from product location. As already mentioned in previous chapter that product of this business plan is dried cassava chip, produced from giant cassava root tuber that is harvested from organic cropping cultures. Although the cassava itself is commonly cultivated by local farmer, the variety of Manihot esculenta and producing chip is relatively new for local farmers. Regarding an issue of toxic content of the giant cassava, BPTP Kaltim convince that this giant cassava variety was less toxic of cianide hydrogen (HCN). In addition, Badan Pengawas Obat dan Makanan-BPOM5 explained that the HCN content of common cassava ranged 15-400 mg/kg fresh cassava. According to FAO6, the content of cassava HCN allowed to be consumed was 50 mg/kg. Meanwhile the HCN content in the giant cassava fresh tuber was 2,44 mg/kg. Local farmers are so far only familiar with local cassava that is produced for consumption or feeding material for their pigs. Therefore, this dried cassava chip product will not be marketed at local (village and sub district of Damai), but it will be marketed to cassava processing factory in other sub district (Bongan) of West Kutai District or to other districts (sub district of Kota Bangun at KutaiKartanegara Districtor Paser District). The cassava factory in Bongan Sub District (at SiramMakmur village, about 3 hoursâ&#x20AC;&#x2122; drive) with capacity more than 50 ton/day has been installed. According to local extensionist and head of cassava business unit at Bongan, the infrastructure (machine and its supporting accessories) was provided by provincial budget (through Food Crop Service Agency) and the farmerâ&#x20AC;&#x2122;s business unit provides land for factory. Raw materials are expected from the cassava farmers at this village, but due to the machine has big capacity, other raw materials from outside villages are very open to assure the machine could run optimally. Other prospect market of this dried cassava chips from Damai sub district is cassava factory located in Sub District of Kota Bangun (at Loleng Village), about 5 hours drive. This machine factory was a private investment of MasyarakatSingkong Indonesia (Indonesian Cassava Society) in KutaiKartanegara. A private investor of PT Anugerah Prima Abadi, that has already signed cooperation with China buyer (company), also ready to buy the cassava from farmers, where this cassava will be processed first become gaplek(dried cassava chips) before exported to China. At national level, the situation is that the central government still imports cassava as raw material for food and other industrial development due to the cassava harvest time is uneven. Number of cassava imported in 2009 is 166,813 ton, then increased to 294,832 ton (2010) and 435,419 ton (2011) (Source: Ministry of Agriculture, 2012). The central BPS recorded that in 2012, number of cassava imported almost reached 2 million ton. In addition, number of wheat flour consumption is increased, where in 2012 was 5.04 million tons in which 4.12 million tons must be imported (Source: APTINDOAsosiasiProdusenTepungTerigu Indonesia/Indonesian Wheat Flour Producer Association).

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Assessment Of course, this is a big opportunity for local farmers to increase the cassava production, in order to produce its derivative products, such as (tapioca starch, cassava flour and MOCAFmodified cassava flour). MOCAF has big chance to substitute the demand of wheat flour where to date is still imported. However, to continue supplying dried cassava chips from farmers to factory still need further scenarios. The things that need to be taken into consideration are number of minimum supply that can be provided, quality of the product (physic performance, size, dirt contaminant, water content, etc.), and continuity of the supply. A part of that, farmers also need to consider the â&#x20AC;&#x153;4Ps strategyâ&#x20AC;?: product, price, promotion, and place (distribution strategy). It is therefore, local government (province and district) interventions are needed in the form of policy and providing/facilitating resources needed toward development of the cassava processing factories. Facilitation in marketing channel and strategy is also needed to strengthen the bargaining position of local entrepreneur of this cassava commodity.

Dried cassava chips produced from the demonstration plot will be mainly marketed to the industry in Bongan and Kota Bangun sub districts. In the second year, the project will try to widely open partnership with a few big demanders, such as Indofood and similar big industries at national level. Another plan is to push local government or provincial government to build new factories in Damai or Melak. The factory may produce the flavor or even the derivate such as bioethanol. It would be a new innovation in the market of cassava. Partnership with MasyarakatSingkong Indonesia (MSI) will be opened since the first year. Based on the information from MSI members, the gross income per hectare is IDR 70 million for first year. In the second year, the farmers may potentially gather the net income of IDR 50 million.

The final business product of cassava project is dried cassavachipsunder quantity unit of kilogram and monetary unit of Rupiah. The projection of area uses in the financial aspect analysis is for 20 hectares land plantation and supported by a number of farmers as workers. From land preparation until harvesting season will be begun on the first year. The project period will be calculated for a 5 years project with 8-9 months harvesting season (5 times of harvesting during project period). Fixed investment during project (5 years) is IDR 204,500,000 with calculation as followings:

Category of Cost Fixed assets investment

Total Fixed Assets investment

Total cost 10 yrs (IDR)

Assumption

30,000,000 10,000,000 2,500,000 5,000,000 2,000,000

1 unit / 5 th 10 unit/th 10 unit/th 10 unit/th 2 unit/2 th

26,000,000 88,000,000 16,000,000 25,000,000

1 unit Per 5 ha for 20 years 1 unit per 5 ha for 5 years 1 unit per 5 ha for 20 years 1 unit per 1 unit for 2 years

204,500,000

Operational cost during project period (10 years) is IDR 4,955,593,987 withdetail as follows:

ITEM Seedlings /Organic Fertilizer "G1 WIJAYA" Brown Liquid "G1 WIJAYA" Liquid Pesticide"G1 WIJAYA" Freight in (SBY - KUBAR) - CONTAINER Rack sack Land clearing (package) Soil tillage by hand tractor Soil embankment/mounding Holing Planting Replanting during planting period Weeding, mound & pruning

QUANTITY 160.800 48.000 40.000 10 3 100 1 1 1 1 1 4 4

TOTAL COST batang kg bottle LS ret lembar ls/ha ls/ha ls/ha ls/ha ls/ha people people

96.480.000 5.760.000.000 1.400.000.000 20.000.000 118.500.000 40.473.414 100.000.000 809.468.290 809.468.290 404.734.145 809.468.290 129.514.926 323.787.316

ITEM

QUANTITY

Fertilizing Watering Pest controlling Harvesting Post harvest (packing and transporting) Supervisor Total cost

Category of Cost Fixed assets investment Operational Total required fund

4 2 2 10 4 1

Total cost 10 years (IDR) 204,500,000 4,486,983,268 4,691,483,268

TOTAL COST people people people people people people

24.000.000 323.787.316 161.893.658 647.574.632 129.514.926 728.521.461 12.837.186.663

Total cost per ha (IDR) 10,225,000 224,349,163 234,574,163

Total fixed assets investment is IDR 204,500,000 and cash financing for operational cost during 10 years is IDR 4,486,983,268 per 20 Ha or IDR 224,349,163 per ha. The operational cost includes seed, fertilizer and as well as labor. So overall, themanihot project during the 10 -year project requires an investment fund of IDR 4,691,483,268 or IDR 234,574,163 per ha. Break event point analysis shows that the project will reach BEP IDR 277,355,782 or389,691 kg for 20 ha. The investment feasibility may be analyzed with Net Present Value (NPV), Internal Rate of Return (IRR), Payback Periods, Average Rate of Return (ARR) and Profitability Index (PI) as shown on table below:

Category Net Present Value (NPV) Internal Rate of Return (IRR) Payback periods (PP) Profitability Index (PI) Average Rate of Return

Value IDR 2,738,161,741 10.076 % 6.37 2.22 43.82 %

Status Feasible Profitable Debt able Profitable Profitable

NPV shows a positive value and meaning that the cassavaproject is feasible to be implemented. Meanwhile IRR reaches 10.076% and it is above the deposit interest rate (6.00%/year). While the ARR value of 43.82% is a percentage value that is higher than the expected profit (expected profit rate is 10%). Payback period shows that investment for the cassavaproject will be totally returned to the bank after 8 years (PP is 6.37).

The cassava project in Benung, West Kutai may be funded by multiple parties or partnership including PNPM, Credit Union, BPD, and BRI by providing a soft loan to the farmer institutions. However, the role of local district and provincial government is still highly expected to provide other additional financial support to the farmers. The support

from local government is highly required because the financial institutions above have a limited ceiling to provide a soft loan. Meanwhile, the project requires an enormous financial support. Based on the calculation and analysis show that financial institutions only provide operating funds for each year, and the remaining will be provided by local governments. Total fund for fixed assets that should be provided by local government program is IDR 204,500,000for 10 years project duration. Ratio analysis shows that the project can be operatedwith 71,48% debts from third party from total investment and with margin of debt ratio is 2,392.93%. The debt may be covering all working capital in 10 years of project. Meanwhile, the government fund support is expected 28.52% (equity ratio) and margin-to-equity ratio of 5,998.13%. Comparison between the values of debt and equity capital amounted to 2.5 : 1 (debt to equity of 250.66%). Possibly financial risk in this project is when the local government unable to provide main initial investment particularly to provide fixed assets.Under this circumstance, the project should be demonstrated with manual technology or conventionally. However, the support from financial institutions is absolutely required. Without their support, it is impossible to implement this project due to enormous funds required for this project.

The financial projections were made with several assumptions.

There are some risks in the organic cassava project including:

Implementation

Development of Manihot esculenta is potentially strategic to provide alternative food source and biofuel. Tuber of this species may be harvested within8-9 months with delicious taste and crunchiness. This project will produce dried cassava chips10. Physically, Manihot esculenta has a strong root that helps to save the water and reduce erosion including sequestrate the CO2.

Cassava (Manihot esculenta) cultivation will have optimal products under the rainfall 150200 mm at 3 months age, 250-300 mm at 4-7 months, and 100-150 mm near the harvesting period. To avoid imperfect growth, the temperature should be above 10 oC and the humidity in between 60-65% with average10 hours sunlight per day. The steps of cultivation will include:

The steps of cultivation of Manihot esculenta will be as followings: V.1.1.1. Preparing seedlings Seedlings are from superior variety which are tolerant to dry, low or high pH, Al toxication, and effectively utilize P bounded in Al and Ca. Seedlings are coming old plant in between 10-12 months. Stem should have diameter about 2.5 cm, straight and no shoots. V.1.1.2. Planting Media Processing Before processing the planting media, needs to measure the soil pH. Moreover, needs to analyze the soil samples in laboratory to identify availability of organic matters and nutrients. Then, the project should determine the planting time. Production volume arrangement should be considered because it will be related to market price estimation on the harvesting season. Weeds and roots clearing at land clearing stage are important to provide a good growth space for cassava roots. Then, mounds are prepared after 70% of land preparation. The aim of making mounds is to ease the maintenance and clear wild weeds. To improve the soil pH, there should be calcification by using calcite (CaCO3) with a dozes 2.5 ton/ha. It could be done during land plowing or moundsmaking. It is also important during that time to inoculate the mychorrizaor bacteria that could stimulate soil biological process to make phosphate nutrient become more soluble and easy to be absorbed by crop roots. Suitable soil pH for cassava is in between 4.5 â&#x20AC;&#x201C; 8.0 in which ideal pH 5.8. V.1.1.3. Planting technique Planting space for cassava is 1 x 1 M on the dry land. Ideal planting time is on the early rain season or after planting rice. Small parts (cuttings) of Manihot esculenta stems should be soaked in the liquid organic fertilizer MIG-6 Plus. Moreover, cuttings of cassava are planted with depth one-third of the cuttings (5-10 cm). 10

Implementation V.1.1.4. Maintenance Replanting will be done to replace dead or abnormalcuttings. It would be done on the early morning or on late afternoon to avoid hot weather. Furthermore, weeding is conducted at least twice in one period of plantation. Critical period to weeding is in between week 5-10 after planting. If weeding is not controlled during the critical weeks then productivity will decrease 75%. The last step is making mounds to keep soil crumbly. It could be done during the weeding for cost and labor efficiency. V.1.1.5. Fertilizing Equal fertilizing (N, P, K) will use organic fertilizer with dozes 1/3: 1: 1/3. Fertilizing by using MiG-6 plus is more efficient in terms of quantity. Fertilizer will be applied in each planting hole. The project will require 5 ton/ha of dung. Three days before applying dung, the lands should be applied by 2 liter MiG-6 Plus/hectare with composition 1 liter Mig-6 Plus mixed into 200 liter of water. Sprayed to the land mainly to the planting whole or areas where the dung applied. MiG-6 Plus should also be appliedwhen the cassava at 2 months with composition 2 liters, 2 liters at 4 months, 2 liters at 6 months, and 2 liters at 8 months. V.1.1.6. Watering and Spraying Mounds condition of Manihot esculenta planted up to 4-5 months should be on the humid condition but not wet. Watering and spraying should be applied when soil is dry. The water supply from well will be flowed to the water tanks near the location. It will guarantee the water supply for watering and spraying. V.1.1.7. Pest controlling Pesticide may be used if pests indicate attack the cassava. Pesticide spraying will be done in early morning or late afternoon with dozes according to level of attack. The project will try to use bio pesticide and reduce the use of chemical pesticide. V.1.1.8. Harvesting Harvesting may be applied when the cassava at 6-12 months depends on market demands. Harvesting cassava is simply by only pulling out the stems from the ground. Cut the roots/tubers from the stem based on the requested size, dry it using sunrise, and compiled into one place by putting into sacks. Then it is ready to be marketed. V.1.1.9. Post Harvesting Processing Post harvesting processing depends on market demands. Tuber of this species may be harvested on 8-9 months with delicious taste and crunchy, cassava may produce its derivate including chips, fermented cassava, and other substitute vegetables. Meanwhile the tuber with age 9-12 months will have high starch content and very good for dried cassava flour, tapioca flour, substitute wheat flour, organic fertilizer from cassava, and bioethanol.

The time frame of production may be drawn as followings:

No.

Steps of Work

Time Frame (month)

Implementation 1 1. 2. 3. 4. 5. 6. 7. 8. 9.

4 5

6 7

8 9 10

Providing cuttings Soil Processing Planting Maintenance Fertilizing Watering and Spraying Pesticide spraying Harvesting Post Harvesting

Based on the early calculation, the field workers for this project will be drawn on table below:

Steps of Work Land clearing (package) Land plowing by Tractor Making mounds Providing planting holes Planting Replanting Maintenance Fertilizing Spraying Pest and disease Control Harvesting Post Harvesting Supervisor

Labor (person) 1 1 1 1 1 4 4 4 2 2 10 4 1

Duration of work (day/ month) 4 5 5 5 10 2 5 30 30 5 5 10 12

Cost (Rp) 5.000.000 2.000.000 2.000.000 1.000.000 1.000.000 200.000 200.000 200.000 200.000 200.000 200.000 200.000 800.000

Ten people will be hired to work in this project from preparing the land, planting the cassava, harvesting and post-harvest processing. This project also requires a supervisor to control and supervise the work from preparing the land until post-harvesting. The workers will be originally from Benung, or other villages near Benung such as Keay, Tepulang or JenganDanum. The farmers will have a series of training related to the land preparation, plantation, maintenance and post harvesting process.

Management and organization in the cassava project will include three important components:

Implementation

Community based organization (KSM) is a farmers organization in Damaisub districts, particularly in Benung village. The KSM will play a role as a room of discussion and information exchanges including capacity building. The KSM is a group of local farmers particularly farmers of cassava in each village of sub district to improve their livelihood by developing cassava (singkonggajah) as a commodity. The KSM will open a partnership with MasyarakatSingkong Indonesia (Indonesia Cassava Community-MSI) to improve the role and function of KSM in Damai particularly in improving skills and knowledge of farmers.

Business unit will have a function to trade/market the harvesting products from farmers to buyers based on the demand. Business unit will be under the structure of KSM but the legal entity may be cooperative or other entities (such as UD, CV, PT, KSU11) that will play the role to facilitate the marketing processes. It will avoid the monopolistic practice and gain better price at farmersâ&#x20AC;&#x2122; level. Partnership with MSI (Indonesia Cassava Community) should be developed to support the KSM and its business unit in enlarging the marketing network to the MSIâ&#x20AC;&#x2122;s partners.

In Damai sub district, there is a Credit Union (CU SepekatNingkahOlo) which operates since a few years ago and opens the office in JenganDanum village. Most of local community in Damai is member of CU SepekatNingkahOloh with total members of5,300 people with 4 lockets of payment. The credit unit will be a part of KSM structure in which the member of KSM is member of credit unit as well. Assets of CU SepekatNingkahOlo reach IDR 82 billion. By applying the interest rate 1-1.25% per month or equal of 8% per annum, CU SepekatNingkahOlo provides easiness for member to receive soft loan for their needs, particularly for agriculture purposes. Meanwhile, comparing to local bank in West Kutai, credit scheme by local bank applies 0.8% per month (fluctuate) based on the current rate. According to Bank Kaltim main office in Samarinda, they have a program to provide loans for agribusiness sector, including cassava. A part of cassava project in Kota Bangun has been supported by Bank Kaltim under closely cooperation with Indonesia Cassava Community (MSI) Other option for adequately funds of KSM may be applied from local soft loan provided by local government of West Kutai. The credit can be received through Community Empowerment Agency of West Kutai which provides a micro credit up to IDR 5 million per Community Business Activity. Meanwhile the Cooperative, Trade and Industrial Agency of West Kutai provides a soft loan up toIDR 100 million per community business activity with an interest rate is 0.5% per month. Based on this information, the relation of structure/organization components may be drawn as followings:

UD: Usaha Dagang/ trading business, CV: Limited Partnership, PT: Limited Company, KSU: Multi business cooperative

Implementation Farmers group

Business Unit (UD, CV, PT, KSU)

With support from Indonesia Cassava Community/ MSI

Community Based Organization (CBO)

Financial Unit (CU, BPR, PNPM)

Related to the management and organization functions above, all farmers involve as member of the organization must sign agreement related to their rights and obligations. It will be written in the agreement of business development for cassava project between farmer and those three units of organization.

Related to the project development of Manihotesculenta in Damai, a SWOT analysis is absolutely required. Those are including two external, and two internal factors. The external factors are including opportunity and threat. Meanwhile, internal factors are strengths and weaknesses. Or from other perspective, Strengths and Opportunity may be considered as positive factors, and Weaknesses and Threats is negative factors. The SWOT analysis of cassava project in Benung village of Damai sub district is described as followings:

Degraded lands in Damai are potentially large area and will be an important factor in the project development. Based on the analysis, about 108,523.46 hectares of degraded lands are available in Damai sub district. Most of the lands are located at non forest area. Technology in cassava cultivation is not highly required since the procedures are commonly conducted by local farmers. It leads to the willingness and enthusiasm of local farmers to involve in the project. Another strength is related to the soft loan from CU in Damai. The Credit Union has been providing a credit scheme to cultivate manihotcassava. If this project is success enough, then other local financial institutions will also provide similar scheme of credit.

Implementation

Manihotesculenta or commonly known as giant cassava (singkonggajah) is a new variety found and as endemic species in East Kalimantan. The production of tuber may be 10 times of ordinary species of cassava. However, Manihot esculenta is not commonly known by local farmers. It leads to mismanagement and difficulty to cultivate it in their lands. Besides the experiences and skills, information and knowledge on how to cultivate Manihot esculenta is still limited. Another condition categorized as a weakness is related to the institutional/organizational of farmers. Management skill of farmer organization is very low. It leads to limited markets can be accessed and supplied.

One of agricultural development priority in East Kalimantan as announced by elected governor of Kaltim- Awang Farouk Ishak and Mukmin Faisal- is intensifying alternative food development outside of rice. Manihot esculenta plantation program is one of priorities for provincial East Kalimantan. It is not only for food options in the future to reduce our dependency to rice, but also for another purpose including energy. Manihot esculenta has a very good content for bioethanol as an alternative energy for our future. Moreover, the market of Manihot esculenta is getting better and wide. China is a country which has been investing their funds to develop industry of tapioca flavor in East Kalimantan. China investor has also been moving their industry in Central Sulawesi to East Kalimantan due to opportunity in East Kalimantan is better than Central Sulawesi. High support from local government of West Kutai is another factor supporting this project. Local government of West Kutai has committed to provide a soft loan for the development of cassava project. This commitment is also supported by MSI (Indonesia Cassava Community) bystrengthening the marketing network.

The cassava farmers who are involved in the cassava project in Damai sub district will face at least two threats including availability of cassava production facilities, and uncertainty of market. Since this program is strongly and intensively introduced by provincial government, the dependency to the provincial government will be high. It will include availability of seedlings, funds and other production facilities. Without high support from local district government, it will be difficult for farmers to grow. Meanwhile, the market is also limited to a few industries without any information on how is the supply from existing cassava farmers, and capacity of the factory. Over supply from farmers will be a serious threat for this project besides the uncertainty of price on the farmers or industry level.

E x t e r n a l

Internal

Implementation Strengths (S) 1.

Weaknesses (W)

Based on the SWOT analysis above, business developmentstrategies will be as followings: V.4.5.1.

Strategies to develop farmers organization of Manihot esculenta;

V.4.5.2.

Strategies of cassava cultivation (Manihot esculenta)

V.4.5.3.

Strategies to develop credit unit

V.4.5.4.

Strategies to business unit development

Implementation

Growth Benefits

Based on the Christanty12 et al. (1996) research found that cassava at 2-9 months will potentially sequestrate 0.1422 â&#x20AC;&#x201C; 3.3584 ton/ha. Within the total project 25 hectares, potential of carbon stock from cassava cultivation is 2.844 â&#x20AC;&#x201C; 83.96 tC. Another main important point in this project is the use ofsolar energy to generate the water pumps in the demonstration areas. With total consumption of 250-300 watt per water pump, the project will substitute theuse of electric generator with solar panel that will be clean from emission. Total emission reduction per water pump by using solar panel system will be 35,156.7945 KgCO2/month13 or 1,757,839.725 KgCO2/ harvesting period for all demonstration area.

This aspect highlights the importance of national, provincial and district economic output (GDP), sustained in such a way that it results in broad-based social development and prosperity. The economic growth and prosperity of local community, particularly in Damai will be increased if the local farmersâ&#x20AC;&#x2122; institution and market networks are strengthened. Local income per month for the farmers in Benung is IDR 1,500,000- 2,000,000. Meanwhile if the farmers own at least 2 hectares of land, cassava project will contribute to generate at least IDR 50 million per 10 months or IDR 5 million per month. Meaning, more than 100% increase of income will be received by farmers.

This highlights growth which sustains natural capital, especially the natural stocks which supply a continuous flow of important ecosystem services. These stocks, such as the provision of clean water, provide essential contributions to economic growth and human well-being but are often omitted from decision making as they are not seen as inputs to economic production. A better environmental resulted from using environmentally materials demonstrates that the cassava plantation will reduce not only the emission but also other ineffective and inefficient resources. Impact of this, the ecosystem and environment will be more healthy, productive and sustainable. Particularly for the forest/land fire in abandoned or unmanaged lands will be a high risk and causes the health problems.

Pillar of inclusive and equitable growth will highlight growth for the benefit of people, those in urban as well as in rural areas, the affluent as well the marginalized. This dimension is a central objective of green growth, and is highly correlated with economic growth and environmental quality. Countries with higher levels of poverty and inequality are likely to benefit more from green growth interventions. Total of poverty people in West Kutai is 11,256 people or about 22.31% of total households (West Kutai in Figures, 2013). Meanwhile, in Damai 770 people are under poverty line or

Growth Benefits about 8% of total inhabitant of Damai. It is expected that project will contribute significant income generation in Benung from cassava cultivation. It would be at least reduce the poverty at Damai.

Social, economic and environmental resilience strongly related to the growth that builds economic, financial, social, and environmental resilience and is about the systemâ&#x20AC;&#x2122;s ability to withstand external shocks (e.g. adapting to the physical impacts of a changing climate, diversification of economic sectors, food security, currency and trade stability). The cassava cultivation in Benung village will not only contribute to the social, economic resilience, but also increase the environmental resilience byusing composted manure and organic fertilizer, and substituting the electric from fossil (generator) to solar panel system. Using the waste of cassava for the pig foodwill also contribute to the efficiency and effectiveness of product.

ITEM

VALUE

EXPLAINS

ABILITY TO MEET CAPITAL REQUIREMENTS (IDR)

43,066,817

Maximum fund capability > provided funds

PERIODS OF WORKING CAPITAL IN YEARS

Working period of commodity project

TOTAL CREDITS

2,648,915,764

PERIODS OF CREDITS IN YEARS

Total loan from 3rd party (financial institutions) period of loan

EARNING BEFORE TAX (IDR)

125,828,876,037

net income before tax during project period

EARNING BEFORE TAX (AVERAGE - IDR)

6,291,443,802

net income average before tax during project period

EARNING AFTER TAX (TOTAL - IDR)

124,262,895,161

total net income after tax during project period

EARNING AFTER TAX (AVERAGE - IDR)

6,213,144,758

net incove average after tax during project period per year

NET PROFIT AFTER INTERESt (TOTAL IDR)

123,313,129,189

NET PROFIT AFTER INTEREST (AVERAGE IDR)

6,165,656,459

Net Present Value (NPV) (IDR)

12,073,242,232

Internal Rate Of Return (IRR)

37%

Avarage Rate Of Return (ARR)

345%

Payback periods (PP)

6.03

Profitabilitas Index (PI)

34.73

Break even point (IDR)

1,181,945,419

total net income after deducted loan interest during project period total net income average after deducted loan interest during project period per year present value from cash flow net from investement spending (must be positive value) Resulted percentage net income should be higher than loan interest rate average percentage of net income should be higher than expected income rate percentage payback period of investment (in year, should be below of project period) present value in the future compared with curent investment value must be above 1 Minimum selling in Rupiah in a harvesting period

Break even point (UNIT)

total minimum selling quantity in a season

OPERATING RATIO

19.65%

Total production cost should be under selling value (under 100%)

OPERATING MARGIN RATIO

80.35%

NET MARGIN RATIO

79.35%

Profit value before tax is above expected profit value + income tax income value after tax is above expected profit value

ITEM

VALUE

EXPLAINS

RATE OF ROI

657.46%

NET RATE OF ROI

649.28%

profit value before tax is above 100% investment value of fixed assets profit value after tax is above investment value of fixed assets

ASSETS TURN OVER

818.23%

CAPITAL WORKING TURN OVER

525.28%

MARGIN TO DEBT RATIO

4691.09%

selling value is above 100% of capital working 0

MARGIN TO EQUTY RATIO

12985.54%

DEBT RATIO

73.46%

selling value is above 100% of capital working comparison with equity ratio

EQUITY RATIO DEBT TO WORKING CAPITAL RATIO DEBT TO EQUITY

26.54% 8.89% 276.81%

comparison with debt ratio loan versus capital working loan versus own capital

NO.

Value Aspect

indicator

Capability to meet capital requirement

positive value

Payback periods (PP)

Payback Period < payback maximum

Net Present Value (NPV)

Net Present Value (NPV) > 0

Profitabilitas Index (PI)

Profitabilitas Index (PI) > 1

Internal Rate Of Return (IRR)

Internal Rate Of Return (IRR) > EXPECTED PROFIT

Avarage Rate Of Return (ARR)

Avarage Rate Of Return (ARR) > EXPECTED Minimum Accounting Rate Of Return

Break Even Point

Ratio Analysis

Analysis Resume

Explanation

Status

positive value

YES

1.06

NPV

YES

17.39

YES

154.006%

profit

19%

YES

342.11%

ARR

10%

YES

YEAR

0.33

BULAN

HARI

8,258,026,219

277,355,782

IDR

389,691

YES

OPERATIONAL PROFIT ON SALES (EBIT/SALES)

11%

YES

OPERATIONAL PROFIT ON COST (EBIT/COST)

266

89%

YES

NET PROFIT ON SALES (EAT/SALES)

10%

YES

NET PROFIT ON COST (EAT/COST)

264

90%

YES

ITEM

QUANTIT Y

PRICE/QTY

DEPRECIATIONS

MNTH

@ YEAR

@MONTH

@ SEASONS

TOTAL

120

15,000,000

3,000,000

250,000

3,000,000

30,000,000

1,000,000

83,333

1,000,000

10,000,000

Land

Building

unit

15,000,000

Hoe

unit

100,000

Sickle

unit

25,000

250,000

20,833

250,000

2,500,000

Cleaver

unit

50,000

500,000

41,667

500,000

5,000,000

Insecticide Sprayer

unit

200,000

400,000

200,000

16,667

200,000

2,000,000

Well + deep water pump Water galon 5000 liter + Nosle + Frame Solar Photovoltaic+Controller+ Inverter

set

13,000,000

52,000,000

240

2,600,000

216,667

2,600,000

26,000,000

set

11,000,000

44,000,000

8,800,000

733,333

8,800,000

88,000,000

set

8,000,000

32,000,000

240

1,600,000

133,333

1,600,000

16,000,000

Maintenance Free (MF) Battery

set

1,250,000

5,000,000

2,500,000

208,333

2,500,000

25,000,000

TOTAL

AGES

TOTAL PRICE

150,150,000

20,450,000

1,704,167

20,450,000

204,500,000

ITEM HASIL DALAM SATUAN PRODUKSI HARGA JUAL PER SATUAN PRODUKSI TOTAL SALES

ITEM

TOTAL 24,000,000 712 17,081,564,760

Building Hoe Sickle

TOTAL 30,000,000 10,000,000 2,500,000

Cleaver Insecticide Sprayer Well + deep water pump Water galon 5000 liter + Nosle + Frame Solar Photovoltaic+Controller+ Inverter Maintenance Free (MF) Battery

5,000,000 2,000,000 26,000,000 88,000,000 16,000,000 25,000,000

TOTAL FIXED COST

204,500,000

ITEM SEEDS COST

TOTAL -

BIBIT (STEK BATANG SINGKONG)++ total cost "seeds" FERTILIZER COST Organic Fertilizer "G1 WIJAYA" Brown Liquid "G1 WIJAYA" Pestisida Liquid organic

160,800,000 160,800,000 1,304,760,000 60,888,800 217,460,000

Freight in (SBY - KUBAR) - CONTAINER total fertilizer costi OTHER RAW COST karung Total other cost LABOUR COST

858,967,000 2,442,075,800 15,709,958 15,709,958 -

Land clearing (package) Land plowing by Tractor Making mounds Providing planting holes Planting Replanting

200,000,000 157,099,577 157,099,577 78,549,789 157,099,577 25,135,932

Maintenance Fertilizing Spraying

62,839,831 377,038,985 188,519,493

ITEM Pest and disease Control Harvesting Post Harvesting Supervisor total labor cost TOTAL VARIABLE COST

TOTAL 31,419,915 157,099,577 125,679,662 150,815,594 1,868,397,510 4,486,983,268

ITEM TOTAL SALES SALES PRICE/QUANTITY TOTAL FIXED COST TOTAL VARIABLE COST VARIABLE COST/QUANTITY

VALUE 17,081,564,760 712 204,500,000 4,486,983,268 187

ANALYSIS BEP In MONETER (TOTAL AREA) BEP In UNIT (TOTAL AREA)

277,355,781.58 389,691.39

IDR KG