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

GLOBAL GREEN GROWTH INSTITUTE MAY 2014

Business Plan Development of Organic Rice on the Degraded Lands, West Kutai

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

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 ha). 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. Karangan village -which is located in Mook Manaar Bulatn sub district- is a selected location to demonstrate the organic low land rice (variety of G1 WIJAYA) for at least 50 ha. Reason to select Karangan as location is including easily accessed from sub district of Barong Tongkok or Melak (important trade towns near the Mook Manar Bulatn), the soil at lowland area is dominated with the Teweh (TWH) land system that is having good suitability for rice, and long history of local community culture in cultivating paddy (dry field and irrigated rice field) including indigenous paddy species. The area of demonstration plot is categorized as degraded and unproductive land where mostly located along the river. The product of this business is organic rice produced from irrigated rice fields which are environmentally managed. It is expected that by using 50 ha degraded lands, the production of rice in Mook Manoor Bulatn will increase 206,000-275,000 kg/season (or 412,000-550,000 kg/year) since the project started (or contribute 9.26-13.87% from total average production of paddy in Mook Manaar Bulatn per year). As well, It is expected that rice production from this project will be higher than current local sub district productivity of 4,120 kg unhusked rice/ha/ season. Currently, total paddy production in this sub district is 2,971,000 kg/year, where 29% (or 862,000 kg) is from irrigated rice. The offered price at supermarket in Samarinda/ Balikpapan is vary between IDR 20,000-25,000/kg, depends on the quality, variety and producer. Meanwhile in Melak or Barong Tongkok, the price is between IDR 10,000- 12,000/kg. Under price assumption at local level IDR 10,000/kg, break event point analysis shows that the project will reach BEP when the rice production is at 9,588 kg in 50 ha areas and generating IDR 95,884,285 for 50 ha NPV shows a positive value and meaning that the organic rice project is feasible to be implemented. Meanwhile IRR reaches 158.14% and it is above the deposit interest rate (6.25%). While the ARR value of 277.35% is a percentage value that is higher than the expected profit (expected profit rate is 10% and income tax rate is 1%). Payback period shows that investment for the organic rice project will be totally returned to the bank after 1.5 years (PP is 1.71). After having calculating the financial analysis, ratio analysis shows that the project can be operated with 69.88% debts from third party from total investment and with margin of debt ratio is 1,984.42%. The debt may be covering all working capital in 10 years of project. Meanwhile, the expected government fund support is 30.12% (equity ratio) and margin-toequity ratio of 4,604.08%. Comparison between the values of debt and equity capital amounted to 2.32 : 1 (debt to equity of 232.01%). Possible financial risk in this project is when the local government is 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 project only requires a total initial investment of IDR 2,414,049,577 with a total of loans from third parties (non-government) of IDR 1,686,950,000 to finance operational cost for 1 year. Total loans plus interest can be paid back within one year. Meanwhile operational costs in following years can be covered by the rest of the earnings in the first year. Under this circumstance, the government is expected to finance the preparation of fixed assets/ equipment of IDR 727,099,577. Management and organization in the business of organic rice will be divided into three main components include: [1]. Farmers Organization as a place of all farmers to knowledge or experiences exchange under legal entity of KSM (community based organization); [2]. Business Unit of the farmers as a main central unit business which will collect, buy, and sell all products from farmers to certain markets; [3]. Financial Unit or Credit Unit that will act as a bank for the farmers that will provide credit or loan to support their production processes. 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 organic rice between farmer and those three units of organization. From green growth perspectives, the organic rice development in Mook Manaar Bulatn will increase the environmental resilience by using composted manure and biofuel materials. Besides, the local knowledge and wisdom will still be maintained and sustained as a part of indigenous system to resist the global environmental change. Moreover, by using organic materials and sustainable water, it potentially reduces the CH4 emission in between 10-60%.

Executive Summary ........................................................................................................................... 2 Table of Contents............................................................................................................................... 4 List of Table .................................................................................................................................... 5 List of Figures ................................................................................................................................. 5 List of Appendixes ......................................................................................................................... 5 Introduction ....................................................................................................................................... 5 I.1.

Selected Site Location and Details ....................................................................................6

I.1.1.

Location and size of the site..........................................................................................6

I.1.2.

Reasons for selecting the site ....................................................................................... 7

I.2.

II.

1.2.1

Ecological status ............................................................................................................8

1.2.2

Social Status ................................................................................................................. 10

1.2.3

Economic status ........................................................................................................... 10

1.2.4

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

Overview of Sustainable SME ..................................................................................................12 II.1.

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

II.2.

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

II.2.1.

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

II.2.2.

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

II.3. III.

Relevance to East Kalimantan ......................................................................................... 14 Market Assessment ............................................................................................................. 15

III.1.

External Analysis of Market Conditions.......................................................................... 15

III.2.

Potential Customers ........................................................................................................ 16

IV.

Ecological, Social, Economic, and Legal Status ................................................................8

Financial Aspects.................................................................................................................. 18

IV.1.

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

IV.2.

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

IV.3.

Assumptions..................................................................................................................... 19

IV.4.

Risk and its Solution......................................................................................................... 19

Strategic Implementation ........................................................................................................21 V.1.

Operations.........................................................................................................................21

V.1.1.

Preparation phase.....................................................................................................21

V.1.2.

Implementation phase .............................................................................................21

V.1.3.

Monitoring/evaluation phase .................................................................................. 22

V.2.

Resources and Equipment .............................................................................................. 23

V.3.

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

V.3.1. V.4. VI.

Organization............................................................................................................. 24

SWOT Analysis.................................................................................................................. 26 Green Growth Benefits ........................................................................................................ 27

VI.1.

Greenhouse Gas Emission Reduction ............................................................................. 27

VI.2.

Sustained Economic Growth ........................................................................................... 27

VI.3.

Healthy and Productive Ecosystems............................................................................... 27

VI.4.

Inclusive and Equitable Growth ...................................................................................... 28

VI.5.

Social, Economic and Environmental Resilience ............................................................ 28

Appendix .......................................................................................................................................... 29

Table 1. Soil Type in Mook Manaar Bulatn (ha) ................................................................................9 Table 2. Finance projection for the organic paddy project ............................................................ 18 Table 3. Analyses of NPV, IRR, Payback Periods, ARR, and PI ....................................................... 18 Table 4. Time schedule for the plantation during a year ............................................................... 22 Table 5. Required Resources and Equipment of Organic Rice Development .............................. 23

Figure 1. Map of Demonstration Area in Mook Manaar Bulatn.......................................................6 Figure 2. Current condition of proposed demonstration plot in Karangan village, Mook Manaar Bulatn sub district-West Kutai, 2014....................................................................................9 Figure 3. Sample of organic rice from North Kalimantan sold in supermarket in Samarinda & Balikpapan .........................................................................................................................................17 Figure 4. Organization for Organic Rice Demonstration Project .................................................. 24 Figure 5. Structure of the organization .......................................................................................... 25 Figure 6. SWOT Analysis of Organic Rice Project ........................................................................... 26

Appendix 1. Financial Analysis of Organic Paddy Project in Karangan .......................................... 29 Appendix 2. Fixed Assets Investment Analysis .............................................................................. 31 Appendix 3. Break Event Point Analysis ......................................................................................... 32 Appendix 4. Soil Type of West Kutai............................................................................................... 35 Appendix 5. Land System Map of West Kutai ................................................................................ 36

clearing for mining, forest/peat land fires (1997/98 fires covered over 5 million ha) and overexploitation (fish farming, slash and burn based cultivation). These lands can provide community based enterprise a starting point for green business development. 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 province’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. The goal of these enterprises will be to contribute towards establishing sustainable local, land-based economies while managing healthy and resilient ecosystems. A successful enterprise will be based on the sustainable production of a crop, a variety of crops or a combination of products and services, which could include environmental services.

Bappeda and DDPI have selected West Kutai District as the study area for this assignment. Historically, West Kutai was established in November 1999 as a result of Kutai district expansion based on Law No 47/1999. With total area 3,162,870 ha or approximately 15% of the area of East Kalimantan, West Kutai 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 a new district “Kabupaten Mahakam Hulu”). The villages in the area are 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). The study was established specifically in three sub districts including Damai, Jempang and Mook Manaar Bulatn. Sub district of Mook Manaar Bulatn was chosen as demonstration area for this organic rice business plan.

Manaar Bulatn or completely known as Mook Manaar Bulatn is a sub district within West Kutai district, Province of East Kalimantan. Sub district of Mook Manaar Bulatn has been established in 1923 and a part of sub districts of Muara Pahu and Siluq Ngurai. In 2004, in accordance with a government policy (UU No. 47/2009) to split Kutai district into three new districts including West Kutai, East Kutai and Kutai Kartanegara, the sub districts in West Kutai were also split including Mook Manaar Bulatn. Geographically, sub district of Mook Manaar Bulatn is located in 115o45’00’ - 116o01’05’ East Longitude, 0o13’ North Longitude and 0o18’ South Longitude and total area of Manoor Bulatn is 88,538 ha. Total occupant is 2,609 households consist of 8,960 people: male 4,729 and female 4,231. Density rate of this sub district is 0.098 person/ha. The sub district covers 15 villages. Karangan village is a selected location to demonstrate the organic rice with total potential area of 100 Ha. Total area of this village is 53,500 ha with density rate only 0.059 people/ha.

The reasons to select Karangan Village in Mook Manoor Bulatn sub district as the main area for demonstrating organic rice include:

Karangan Village in Mook Manaar Bulatn is a village easily accessed from Barong Tongkok or Melak as main trade towns in West Kutai district. The distance is 28 km

from Sendawar (capital of district) and can be reached by boat or car. Meanwhile, most of main road in Karangan is rigid constructed pavement.

Karangan is dominated with lowland area and mostly located along the river. Data from Food Security and Extension Office (2014) revealed that physically, soil type is red yellow podsolic and entisol, and soil structure is sandy loam. These soil properties are suitable for irrigated rice field. This data was confirmed by Cartography Laboratory of Faperta UNMUL that the land system type of this village is Teweh (TWH) 1 where naturally it has low level of land chemical fertility, but good for both physical and biological fertilities. This low chemical fertility could be increased by applying organic fertilizers to support the paddy growth and production. Currently, the district government develop more than 100 ha irrigated rice field in the district, including Mook Manaar Bulatn in 2014.

Most of the ethnic in Karangan is Dayak Tunjung and they are mostly farmers. The culture of local community is cultivating. They have a long history and experiences in cultivating paddy (dry field and irrigated rice field).

Markets in Barong Tongkok sub district and Melak sub district (28-32 km from Karangan has significant potential market of the rice products. Sometimes middle men from the city of Tenggarong and Samarinda also look for organic rice or indigenous rice that will be sold in those cities for particular buyers.

Government of East Kalimantan has launched program toward self-sufficiency in rice. This program involves all District Governments and additional support from regional military institution (Military District Command of Mulawarman). 1,000 ha of paddy must be planted in total for East Kalimantan and 250 ha for North Kalimantan. The provincial Government has appointed West Kutai district as a district to develop food security program. Related to this program, Government of West Kutai has determined Mook Manaar Bulatn as one sub district (among other sub districts) to demonstrate the food security program (rice and livestock).

Karangan village is chosen as the location of demonstration plot. This village is dominated with lowland area and the demonstration plot will be located at this area near the river bank. In the low land area, few people cultivated paddy and the rest at the land territory is covered by wild grasses.

Karangan village is located at 35 meter above sea level (but in some area is low level) with relatively flat topography. Land cover in this village is dominated by young secondary forest and bush (fern and alang-alang grass). Home yard (of forest- and fruit-tree crop) forest (lembo), village forest, and community plantation forest are many in this village. The secondary forest status is still at young stage. The rubber, sugar palm, fruit trees, and other forestry tree crops mostly dominate the vegetation land cover.

Based on the soil map unit, the Karangan village is categorized as SPT 6 under Hapludults Dystrudepts soil classification and sub relief tectonic plain. Phosphate and nutrients are low. Meanwhile under land system map, demonstration area in Karangan is categorized under Teweh (TWH) land system. Suitable area for agriculture development in Mook Manaar Bulatn including in Karangan village, improvement of soil chemicals through fertilizing and addition of organic materials are required2.

SPT 1

SPT 2 16.265

SPT 3

SPT 4

SPT 5

SPT 6

SPT 7

3.124

65.798 10.129

Total 95.316

Although generally land cover in the village is covered by green vegetation, degraded land still exists. Type of land degradation includes unproductive land with covering of fern or alang-alang vegetation or young secondary forest. This unproductive land scatters near the river and hilly area of the village, including the place where the plot demonstration will be located.

Total occupant of Karangan village is only 107 households consist of 317 people: male 156 and female 161 (or 3.71% of total sub district population). Density rate of this village is 0.059 person/ha. Related to the agriculture, the number of farming household in 2013 is 92.79%. Regarding the employment, no data is available for unemployment level in this village. Despite as farmers, other livelihoods are as teacher at Kindergarten and Primary School, nurse and midwife.

Karangan village, according to the data from Mook Manaar Bulatn Sub District in Figure (2013): there are relatively few families under poverty group, including 24 families (of total 287 families in sub district). Meanwhile, regarding the agriculture, data from Food Security and Extension Office (2014) that there are high percentage of potential farming area in Karangan villlage. This includes: low land 50 ha, upland 650 ha, tree crop farming 400 ha, fish pond 10 ha, and pasture 10 ha. Currently, the land utilization is still focussing on upland for paddy and secondary food crops (67 ha), and tree crop plantation of rubber and sugar palm (220 ha).

Paddy and other secondary food crops (maize and cassava) are found in most of the villages. The annual crops, forestry and fruit tree crops dominantly occupied farmersâ&#x20AC;&#x2122; land, especially at home yard (locally called lembo). Since the forestry and fruit commodities were harvested annually, meaning rare income will be earned, majority by farmers who choose rubber (Hevea brasiliensis) for the cash crops that could give more frequent income. Karangan village is relatively close to market in big town Melak and accessible by boat (across the river about 25 minutes). Locally, the main road access is already constructed of solid pavement, but, the people still have other infrastructure problems, such as electricity and clean water. Local daily or weekly market at this village does not yet exist. Many local buyers from outside village come and look for agricultural products in the village, such as rubber, organic paddy, palm sugar, etc.

Most lands in Mook Manaar Bulatn sub district, including in Karangan village, have been permitted to third parties, such as land permitted to oil palm and coal mining companies. About 30-40% of the area belongs to the local community and utilized as cultivating fields or crops plantation. Concerning the legal status between local people and outside investor, to date there is no conflict recorded externally. However, the population pressure in future could threat the land occupation. Nevertheless, the area for demonstration belongs to farmers group under status of clear and clean from any conflicts. The land is not overlapped with other third party permits such as rubber, oil palm or coal mining companies. It is located mostly near the river, and partly has been planted with rice by farmers. Most of the farmers within the demonstration area have no certificate from BPN (National Land Agency) as legal ownership document. As in other village and remote areas along Indonesia, most of the land ownership legal certificate is only using a seal letter (called as a Segel) from sub district office.

The product of this business is organic rice produced from irrigated rice fields which environmentally managed. This product is not a new thing for the local farmers in the village, where they are used to produce rice without any chemical substances involvement, especially in upland area, although the agricultural practice was still very traditional. They have been planting paddy for decades by practising organic cultivation, due to no access to chemical fertilizers and pesticides. Since the objective is only for fulfilling subsistence, the farmers cultivated the rice rarely more than two hectares. Historically, local organic paddy variety is a hybridization of local paddy species with lemongrass and pandanus. The technique has been demonstrated in Bendang village of Tenggarong sub district, Kutai Kartanegara and in Lempake urban village of North Samarinda sub district. The experiences in these areas will be replicated in West Kutai district. This variety produces medium maturity (proximately needs 120 days from sowing to harvest). Process of land clearing and land cultivation will use the machinery. Green/ biofuel from oil palm plantation in the surrounding area will be taken into consideration to be used for hand tractor operation. Regarding the process from growing the paddy to the final product includes two main steps: growing until harvesting and post-harvest processing. The growing of paddy will be started by sowing seedlings after soil tillage, maintaining (weeding, fertilizing, watering, and pest/disease controlling), and harvesting. After the paddy harvested, the rice with husks will then be threshed, dried, milled, and packaged. Rice packaging will be using transparent plastic sack with labeling the product of organic rice from West Kutai district. The term â&#x20AC;&#x2DC;organicâ&#x20AC;&#x2122; in the label only reflects the traditional practice, and does not yet mean it has been standardized by local or national legal authorities. This standardization process is beyond the project intervention. The rice package will consist 1 kg, 2 kg, and 5 kg weight. If the product is compared to other products at the local West Kutai district, the Karangan organic rice will have different variety (hybridization of local paddy species with lemongrass and pandanus), and thus having different product quantity and quality. Despite the main product of organic rice from lowland paddy cultivation, there are plenty of sustainable uses of the multiple by-products of rice production. These by-products include paddy straw (jerami), husk (sekam), rice bran (dedak), and broken rice (menir). The straw is used to make compost, and the husk is sometimes used as food for chickens together with broken rice. Sometimes the husk is collected and burned, with the ash used for cleaning utensils. Besides that, rice husk is also a good fuel and could be made a briquette to substitute kerosene for cooking. Rice bran is a valuable commodity and is used for many daily needs (oily inner layer is heated to produce oil, also used as a pickling bed in making rice bran pickles). Broken rice is used as fodder.

The demonstration of organic lowland paddy will be developed in Karangan village, sub district of Mook Manaar Bulatn, West Kutai District, Province of East Kalimantan, which total cover area is 50 ha from 100 ha potential3 area in Karangan (there is additional more 50 ha as potential area for further development). Government of West Kutai with strong and close cooperation with Global Green Growth Institute and some other key financial stakeholders will develop the organic lowland paddy demonstration plot. The partnership will commit to introduce and develop a demonstration plot for organic paddy, particularly at the marginal or degraded lands with environmentally treatments, supportive facilities and develop market linkages as well as farmers institutional strengthening. This business hopes to achieve sustainable uses of degraded land and increase farmerâ&#x20AC;&#x2122;s income generation simultaneously.

The goal of organic paddy demonstration plot is mainly to generate a local income through utilizing the degraded or marginal unused lands in Mook Manaar Bulatn with environmental treatments to produce healthy and sustainable farming products. It is expected that by using 50 ha degraded lands, the production of rice in Mook Manoor Bulatn will increase 206,000-275,000 kg/season (or 412,000-550,000 kg/year) since the project started (or contribute 9.26-13.87% from total average production of paddy in Mook Manaar Bulatn per year). As well, it is expected that rice production from this project will be higher than current local sub district productivity of 4,120 kg unhusked rice/ha/season. The project will involve family of farmers in Karangan village either categorized as poverty families (not receiving Rice Donation from Government) or not Meanwhile the objectives include: To utilize the degraded or marginal lands in Mook Manaar Bulatn, especially in Karangan village with at least 50 ha lowland area for five years (or ten growing seasons). To introduce the organic paddy material and good paddy farming practices, as well as environmental farming materials over 25 farmer families in the village. To improve social and economy over 92.79% farmer households (of 107 households in total) of local community in Karangan village. To initiate the sustainable and environmental agriculture based small medium enterprise in 50 ha lowland area in Karangan village. 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. It is therefore advised that the pre-project socio-economic survey needs to be carried out, and so does with the post-project completed.

Recently, Governor of East Kalimantan conducted the Rembuk Pangan (Food Crops Discussion Forum) “to build commitment to realize food security in East Kalimantan and North Kalimantan“, held in Lamin Etam, 28 January 2014, participated by the regents of the province and all stakeholders from government and non-government. This event was carried out as follow up of the Presidential Instruction to 11 governors (including East Kalimantan) at the end of 2013 in Bukit Tinggi, West Sumatera. The provinces must support the national food security program and have the action program. Subsequently, the central government will allocate IDR 1 trillion fund to the province that could provide good and realistic action plan (that means the area status is legal and free of conflict). It is also mentioned previously, that Government of East Kalimantan has launched program toward self-sufficiency in rice with the support from regional military institution (KODAM Mulawarman). 1,000 ha of paddy must be planted in total for East Kalimantan. West Kutai district is also selected as a district to develop food security program. Related to this program, sub district Mook Manaar Bulatn is chosen as one (among other sub districts) to demonstrate the food security program, particularly rice. Unfortunately that ‘an organic’ term was not mentioned explicitly in the government policy. However, this organic thing is still relevant with the ‘back to nature’ and ‘sustainable development program’ campaigns by the local government. Data cited from Governor of East Kalimantan during the Rembuk Pangan (Food Crops Discussion Forum) held in 29 January 2014, revealed that of 3,857,914 ha total area, it consists of Forestry Cultivation Areas (KBK) 2,214,359 ha, Non Forestry Cultivation Areas (KBNK) 892,125 ha, Forest Conservation 5,879 ha, and Protected Forest 745,551 ha. The Governor encourages Bupati (district leaders) to reduce in using forests area for palm oil plantations and coal mining in their proposed spatial plan. Surprisingly there is no available data from government related to statistic of organic agriculture, including paddy production. The spirit of East Kalimantan green by reducing emission and rehabilitate marginal lands through a program of “one man five trees” including to provide a food security for East Kalimantan’s people is enormously in line with the mission and objective to demonstrate the organic rice plantation in Mook Manaar Bulatn and Damai. It is expected that environmentally organic rice development will contribute to the reduction of ammonia emission from fertilizer and fossil fuel used for agriculture machines (hand tractors, grain grinder machine) and increase the local income.

Rice is a staple food and consumed everyday by almost all population in West Kutai. It is therefore farmers put paddy on top priority as commodity to be planted every planting season in their field. Generally, during normal weather and climate, the paddy production could fulfill farmer’s family basic need. In some occasion when the production decreased, farmers have to buy rice to meet their family need. However, there is a correlation between number of population and food demand. Since the population developed in West Kutai, the demand of rice on market will also increase. In particular for organic rice, the market segment is generally still limited to supermarket and middle class community, including consumers from outside district. To date, many local buyers from outside village demand the organic rice from the village at harvesting season. Farmers sell the product without proper packaging, only using plastic sack, even with lower selling price (compared to consumer price). The product will be further packaged and stored at supermarket by local traders as major actor of this organic rice product. Recent development indicated that there is significant potential market for organic rice product at traditional markets or modern stores in Melak and Barong Tongkok, including in big supermarket in Samarinda and Balikpapan. This is good opportunity for farmers to increase the production. At local market in East Kalimantan Province including in West Kutai District, the rice generally comes from outside area (mostly from South Kalimantan or South Sulawesi provinces). This rice is non-organic, produced from common farming practices that involve high external inputs of agriculture. As information that to date, the East Kalimantan Province still import the rice. Level of rice self-sufficiency in 2013 was still 82.75%. This means 17.25% of rice production need to be fulfilled to achieve self-sufficiency. Number of population4 in East Kalimantan (2013) is 3,847,229 people, requiring 434,737,000 kg of rice/year. Meanwhile, the rice production (2013) was only 359,739,000 kg (equals to 573,682,000 kg dried un-husk rice) and hence, East Kalimantan still lacks of 74,998,000 kg rice to achieve self-sufficiency. Unfortunately, there is no available data on organic rice production situation, both in province and district level. Concerning the demand, there are several main actors in the studied district. These are wholesalers, retailers, big/small restaurant owners, and individual consumers. Each of the actors involved demands different quantity and quality of the product. For instance, individual consumers (higher social status) demand only the organic rice product. Currently, some community farmers have been producing organic rice product (through conventional rice practices) to be sell to such consumers, so it is a good market opportunity for the farmers to increase rice production and supply capacity to wider markets. If the government keeps consistent in applying the policies toward ‘back to nature’ and ‘sustainable development program’ campaigns, the demands of organic rice from other consumers, such as collectors at village and communal levels, retailers and wholesalers for local supply and even to outside district would be possible.

In regard with supply, based on data Mook Manaar Bulatn in Figure (2013): total rice production is 2,971,000 kg/year with productivity of 3,540 kg/Ha. Meanwhile, data from BPS Kubar (2013) is slightly higher: 3,446,000 kg/year (or 10.99% of total district production, 31,357,000 kg) with productivity a bit lower: 3,290 kg/Ha. As average of rice production from this sub district is 3,208,500 kg/year, and all of this paddy can be categorized as organic since no chemical substances applied in the farming. Concerning the actors in marketing, there are several in the rice market chain such as: input suppliers, farmer producers, rice collectors, rice stock owners, rice millers, wholesalers, individual family consumers, and other traders. In this case, farmers are playing an important role in producing supplies of rice for the market. Unfortunately, not many rice products could be sold to the market. Local farmers in the village still prefer using their rice for their own family consumption; only the rest will be sold. Therefore, at current situation farmers cannot sell many product quantities to the market, although the price of organic rice product is higher than normal (inorganic) rice product.

The potential customers for the organic rice may be divided into three categories based on the location; consumers in West Kutai, consumers in Tenggarong (district of Kutai Kartanegara), and consumers in Samarinda/Balikpapan. The consumers in West Kutai are a bit limited due to number of middle economic community is still small. Meanwhile, market segments in Tenggarong and Samarinda/Balikpapan are opened widely. There is indication that some big supermarkets in Samarinda/Balikpapan are willing to sell and increase the stock of organic rice products. The product will be expected to reduce the customer problem in finding organic rice sold at supermarket. The offered price at supermarket is quite expensive compared to normal rice product: IDR 20,000-25,000/kg, depends on the quality, variety and producer.

The main difficulty faced by buyers in Samarinda or Balikpapan for local organic rice from West Kutai is only packaging. Worst packaging has decreased quality of the rice (color and smell). As we know, packaging by farmers at the village is undertaken with a limited knowledge and facilities. It is therefore to be suggested that the local government (Disperindagkop) should conduct training and provide tools or facilities related to product packaging, especially organic rice. Providing good product quality is an important aspect to retain consumer.

The final product of this business is organic rice under quantity unit of kilogram and monetary unit of Rupiah. Although project is planned to cover 50 ha demonstration area, the organic paddy projection uses financial aspect analysis for 10 ha plantation with a number of farmers as workers. From land preparation until harvesting season will take 5-6 months or two harvest seasons in a year. The project period will be calculated for a 10 year project with 20 harvesting seasons during project period.

Category of Cost Fixed assets investment Operational Total required fund

Total cost 10 years (IDR) 727,099,577 26,501,913,179 27,229,012,756

Total cost per ha/season (IDR) 727,100 26,501,913 27,229,013

Total fixed assets investment is IDR 727,099,577 and cash financing for operational cost during 10 years per harvesting season is IDR 26,501,913,179 per 50 ha or average cost is IDR 26,501,913 per ha/season. The operational cost includes seed, organic fertilizers and as well as labor. So overall, organic rice project during 10 year project requires an investment fund of IDR 27,229,012,756 or IDR 27,229,013 per ha per season. Under price assumption at local level IDR 10,000/kg, break event point analysis shows that the project will reach BEP when the rice production is at 9,588 kg in 50 ha areas and generating IDR 95,884,285 for 50 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 13,116,905,606 158.14 % 1.71 14.17 277.35%

Status Feasible Profitable Debt able Profitable Profitable

Note: Complete financial analyses can be found in the appendix.

NPV shows a positive value and meaning that the organic rice project is feasible to be implemented. Meanwhile IRR reaches 158.14% and it is above the interest rate (19.00%). While the ARR value of 277.35% is a percentage value that is higher than the expected profit

(expected profit rate is 10% and income tax rate is 1%). Payback period shows that investment for the organic rice project will be totally returned to the bank after 1 year (PP is 1.71).

This organic rice project in 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. The calculation and analysis show that financial institutions only provide operating funds for each year, and the remaining will be provided by local governments. Ratio analysis shows that the project can be operated with 69.88% debts from third party from total investment and with margin of debt ratio is 1,984.42%. The debt may be covering all working capital in 10 years of project. Meanwhile, the expected government fund support is 30.12% (equity ratio) and margin-to-equity ratio of 4,604.08%. Comparison between the values of debt and equity capital amounted to 2.32 : 1 (debt to equity of 232.01%). Possible financial risk in this project is when the local government is 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 project only requires a total initial investment of IDR 2,414,049,577 with a total of loans from third parties (non-government) of IDR 1,686,950,000 to finance operational cost for 1 year. Total loans plus interest can be paid back within one year. Meanwhile operational costs in following years can be covered by the rest of the earnings in the first year. Under this circumstance, the government is expected to finance the preparation of fixed assets/ equipment of IDR 727,099,577.

The financial projections were made with several assumptions: The average rate of growth of income per year is 2%, The average annual inflation growth of 9.70%, The average loan interest rate of 19% The average deposit interest rate of 6.25% The average production of rice is 5,600 kg per ha The average price per kg in the local market is IDR 10,000 Expected Profit rate is 10%.

Implementation of organic rice project will have a number of risks including:

If the government interventions at 30.12% of total initial investment are not in placed, then the project should adjust the mechanic technology into manual. Its consequences to time, labor and costs. If the financial institution is unable to provide credit in an enormous amount, it will be a significant difficulty for the farmers. It may be solved through splitting the credit from a few financial institutions. Because the location of the demonstration plot frequently flooded for a certain period, so it is important to estimate carefully cultivating time.

The organic rice product in Mook Manaar Bulatn will be produced using organic culture approach and consider the local wisdom. This approach basically does not involve any chemical substances during the cultivation. It has benefit toward healthier product that is produced and environmentally sound practice. The organic product will have competitive advantage of health quality and price level in public market. The process to develop the business plan of organic rice in Mook Manaar Bulatn sub district consists of three main phases: preparation phase, implementation, and monitoring/evaluation. The overall processes should be considered as a process to develop a concept, to test it, and to improve it through monitoring and evaluation intensively. This ‘improved’ concept package will need to be further tested or disseminated in other sub districts that have similar physical and environmental condition, or even to be scaled up. It is therefore the implementation of organic paddy BP in this sub district can be said as trial laboratory for any errors and improvements.

Technically; this activities cover all physical measurements related to land preparation (land clearing, land cultivation, including preparing the farming infrastructures such as road access, embankment (pematang sawah), watering and drainage channels; etc. 2. Non-Technical preparation covers activities: a) providing all materials required to plant paddy (as mentioned under technical preparation above and the implementation phase below); b) developing human resource readiness (farmers and their institutions, field agricultural extension, and other key persons at village and sub district); c) Providing ‘a manual’ of organic paddy BP including project agenda, time table, and monitoring sheet, etc.

The activities under this phase cover: 1. Paddy seedling (installing the nursery near the paddy field area, sowing the selected seed, and maintaining the seedling in nursery until not more than 3 weeks); 2. Paddy planting (transferring the seedling from nursery to paddy area, setting the plant spacing, planting the paddy seedling); 3. Paddy maintaining (watering, weeding, fertilizing, and monitoring & controlling of pests and diseases); 4. Paddy harvesting and post-harvest (harvesting, threshing, drying, and milling). a) Visual indications of paddy ready to be harvested are 90-95% of paddy has turned to yellow, at the bottom of tassel there is a little green grain panicle, and paddy water content is ± 22-23%. Harvesting will be carried out using manual cutting with sickle. Threshing will use manual pedal thresher that is commonly used by the local farmers. Drying will use natural sun light for several days (3-4 days and about 3 hours/day), until the water content is not more than 14%.

b) Milling will use rice milling unit that is available in the village. The machine has included: 1) cleaner (to clean grain), 2) rice husker (to convert paddy to rice), 3) paddy separator (separate between grain and rice), 4) rice polisher (as rice whitener), and 5) rice grader (separate between full rice and broken rice). 5. Rice marketing (grading, packaging, transporting, and marketing). Grading has been done by rice milling machine partly, but manual grading still be needed for having good rice that is free from impurities. Packaging will be done by using transparent plastic sack. Processed with electric packaging machine that is new for local farmers. Using 3 different packs (1 kg, 2 kg, and 5 kg). This stage is critical for marketing the product since currently it does not yet exist with the local farmer. Involvement of local government (Disperindagkop) is needed at this stage. Transporting and marketing will be done to outside village (using boat first and then road transportation) to Melak and Barong Tongkok, or to Tenggarong, Samarinda/ Balikpapan. The organic paddy BP is designed for this initial concept as irrigated paddy. The concept will keep applying any local wisdom of local farmers. Some practices that have been widely applied by the local farmers including technique to separate good vs bad paddy seeds before sowing at nursery by using salty water in the bucket, method of determining when to start the land clearing and the planting at site by using natural phenomenon. At the same time, the project will also introduce â&#x20AC;&#x2DC;newâ&#x20AC;&#x2122; innovative and more mechanized methods and technologies in cultivating and maintaining the paddy. It includes using hand tractor for land cultivation, return the grass from weeding or paddy straw after harvesting into the soil as organic source material, and other technologies of best rice intensification systems.

This phase covers activities to monitor (using the monitoring sheet) the implementation of 5 points mentioned above under the implementation phase. The main idea for this phase is to assess whether any problems and what necessary actions required to solve them, so that the plan could run on the track as planned. Regarding the timing process, the implementation of organic paddy BP for the 1 st planting season in two pilot sub districts is summarized as below:

3rd 3-month

Remarks

VIII

VII

Implementation

Land preparation Provide materials & tools Nursery Planting

2nd 3month

Socialization

III

Preparation

1st 3-month

Main activities

Phase

X X X X

Phase

Main activities

1st 3-month

Remarks

VIII

VII

3rd 3-month

III

Monitoring/ evaluation

Maintaining Harvesting Post-harvesting Preparation phase Implementation Evaluation of concept

2nd 3month

X X X

X X

Based on the experiences of similar organic rice plantation in Lempake urban-village, North Samarinda sub district and Bendang village, Tenggarong sub district of Kutai Kartanegara, the required resources and equipment can be described as following:

Stage

Resource/ Equipment

Unit

1) 2) 3) 4)

Manpower Manpower Manpower

people people people

50 30 20

10 2 5

100,000,000/season 12,000,000/season 20,000,000/ season

Manpower Manpower

people people

50 20

4 5

40,000,000/ season 20,000,000/season

Manpower Manpower Manpower Manpower

people people people person

30 100 100 1

5 5 5 180

30,000,000/season 100,000,000/season 100,000,000/season 3,000,000/season

Preparation Nursery Planting Maintaining Fertilizing Weeding 5) Harvesting5 Drying Transporting 6) Finishing

Qty

Work days

Cost (IDR)

The required manpower for organic rice plantation (from land preparation until harvesting to produce the organic rice) is 10 people/farmers with 1 supervisor. From 10 people, at least 6 people need to be trained on how to use machinery technology. Meanwhile other 4 people will act as assistants to transport the harvesting products from the fields to the storage. The project is also requiring a supervisor to control the workers and supervise them during the preparation, plantation, maintenance, and harvesting of organic rice. However, the supervisor will not be employed full time but only work 2-4 hours for 2-3 days in a week. One of the main challenges of this project is manpower. Therefore, all workers for this project should be provided from the local community including farmers and young groups near the fields. The main required expertise/ skill is including farming and how to use agriculture machines. The project will provide a capacity building and strengthening for the farmers/ 5

workers particularly related to planting specific variety of organic rice that will be introduced in the demonstration plot. Team from G1 WIJAYA will be involved during the demonstration period.

Based on the field survey, there is cooperation (Koperasi) in Mook Manaar Bulatn. However, the Koperasi Murung Putih in Mook Manaar Bulatn is only formality and not operational as the function of Koperasi. Koperasi only provides a scheme of soft loan but rate of return is very small. Besides, the function of Koperasi in strengthening capacity of farmers and market networks is very weak. Based on that circumstance, the organization will be proposed for organic rice project will develop what we call as Community Based Organization (Kelompok Swadaya Masyarakat or KSM). KSM aims not only to provide financial support and service, but also to facilitate the market network and capacity/ institutional strengthening of the farmers. It is shown with a chart below:

•Group of farmers

Structure •Led by scholar •Support ed by stakeholders

Legal

•Loan support •Capacity •Market network •Income

Mission

The explanation of organization and how to manage the organization can be described as followings: The legal entity of KSM is a group of community that has a similar objectives, mission, and lives near the rice fields. It should be legalized to the local notaries and registered in the local government of West Kutai. The KSM will be led by at least one bachelor of agriculture. He/ She may be originally come from local villages or other region but committed to dedicate his/her service and knowledge of local farmers in the demonstration project area for at least one year. The structure of KSM will include at least three divisions which are responsible for the farmers’ capacity, production materials & market network, financial support and also one additional division for administration. The division of production materials and market network is responsible to provide all agriculture inputs with a lower price, and develop a market network as wide as possible.

All stakeholders including financial institutions such as Bank, NGO, Credit Union, education institution, companies near the village and government agencies will be involved with their own roles to support farmers and the KSM. Particularly for the leader of division, support from NGOs and government agencies who know how to develop and manage the program is highly required by the KSM. As draft, structure of the KSM will be as following:

Administration

Staff

Financial Support

Farmers

Capacity and Institutional Strengthening

Farmers

Agriculture Inputs & Market Network

Farmers

Chairman

All cost to pay the management of KSM during demonstration period (one year) will be taken from local government and regular membership saving fund. Approximately, the organization requires at least IDR 5 million/month for operation, IDR 50-75 million for providing the agriculture inputs and IDR 25-50 million/year for programs. Thatâ&#x20AC;&#x2122;s why supervision and intensive assistantships are required for the organization to assure that the organization can be operated and achieve the goal/objectives. Based on above explanation, management and organization in the business of organic rice will be divided into three main components include: a. Farmers organization as a place of all farmers in a legal entity of KSM (community based organization) b. Business Unit of the farmers as a main central unit business which will collect, buy, and sell all products from farmers to certain markets c. Financial Unit or Credit Unit that will act as a bank for the farmers that will provide credit or loan to support their production processes. 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 organic rice between farmer and those three units of organization.

Organic rice project is not a new project. There are some similar projects in East Kalimantan implemented for the last couple of years. However, in Mook Manaar Bulatn, perhaps it is a first demonstration project with financial support and organizational/management pattern as described above. For sure, it will have external and internal strengths, weakness, opportunities, and threats. The analysis of SWOT is described in the figure below:

Low knowledge on productivity techniques

Join the farmers group

Strengths

Local variety of rice Suitability of soils and land Suitability of climate Potential market Availability of agriculture input

Supportive agriculture policy and supervision from government

Weaknesses

Experiences to plant paddy

Lack of market information Selling the rice without packaging causing cheap price Only grow organic rise at a small area Weak of negotiation skill Weak of organization & management Poor and inadequate post harvesting processes Low financial support

Potential Market outside of KuBar

Rejection from a group of NGO to the organic rice due to hybrid issue

Demand increases

New variety with new unmanaged disease threat

Related to the climate issues Potential and opened supports Generate a better income More environmentally

Threats

Opportunities

Low skill and knowledge

Cheating from the collectors or buyers to the farmers High interest of loan Complicated and bureaucracy financial support

It is highlighting the importance of a low carbon growth to contribute to global and national efforts to mitigate climate change and minimize future adverse impacts on local and international society. Countries with higher GHG emissions intensity have greater opportunities for cost-effective emissions reduction and more urgent need for assistance. The mission to reduce the greenhouse gas emission can be achieved by using environmental materials in cultivating organic rice. Organic fertilizers from local livestock or composted manure will reduce the release of ammonia and N2O to the air and soil. As well as in using biofuel from oil palm products near the villages for all used agriculture machineries. The potential emission CH46 from irrigated rice system for some varieties in Kalimantan is approximately between 150-170 Kg/ Ha7. By using organic materials and sustainable water, it potentially reduces the CH4 emission in between 10-60%.

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 in two sub districts will increase if the local farmersâ&#x20AC;&#x2122; institution and market networks are strengthened. It is because the selling price of organic rice is much higher than ordinary rice with a specific market segment either in West Kutai or Samarinda/ Balikpapan/ Tenggarong. The economy of West Kutai â&#x20AC;&#x201C;particularly farmers in Mook Manaar Bulatn will grow positively particularly in introducing a better environmental approach. It will contribute to the prosperity level in West Kutai.

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 environment resulted from using environmentally materials in demonstrating the organic rise will reduce not only the emission but also other ineffective and inefficient resources. As the impact of this, carrying capacity of ecosystem and environment will be more healthy, productive and sustainable.

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. Under the case of organic rise development, the impact of economic growth resulted from rice products will reduce the poverty level not only in Mook Manaar Bulatn but also in West Kutai. Therefore, intervention and support from GGGI is highly required.

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). Besides the social and economic resilience, the organic rice development in Mook Manaar Bulatn will also increase the environmental resilience by using composted manure and biofuel. Besides, the local knowledge and wisdom will still be maintained and sustained as a part of indigenous system to resist the global environmental change.

ITEM

VALUE

EXPLAINS

ABILITY TO MEET CAPITAL REQUIREMENTS (IDR)

22,900,423

Maximum fund capability > provided funds

PERIODS OF WORKING CAPITAL IN YEARS 10

TOTAL CREDITS

PERIODS OF CREDITS IN YEARS

EARNING BEFORE TAX (IDR)

1,686,950,000

Total loan from 3rd party (financial institutions)

period of loan

34,089,424,842

net income before tax during project period

EARNING BEFORE TAX (AVERAGE - IDR) 3,408,942,484

net income average before tax during project period

33,476,240,466

total net income after tax during project period

3,347,624,047

net income average after tax during project period per year

33,302,625,195

total net income after deducted loan interest during project period

EARNING AFTER TAX (TOTAL - IDR)

EARNING AFTER TAX (AVERAGE - IDR)

NET PROFIT AFTER INTEREST (TOTAL - IDR)

NET PROFIT AFTER INTEREST (AVERAGE IDR)

Working period of commodity project

3,330,262,520

Net Present Value (NPV) (IDR) 13,116,905,606

total net income average after deducted loan interest during project period per year present value from cash flow net from investment spending (must be positive value)

Internal Rate Of Return (IRR)

158.14%

Resulted percentage net income should be higher than loan interest rate

Average Rate Of Return (ARR)

277.35%

average percentage of net income should be higher than expected income rate percentage

ITEM

Payback periods (PP)

VALUE 1.71

Profitability Index (PI) 14.17

Break even point (IDR) 95,884,285

Break even point (UNIT) 9,588

OPERATING RATIO

44.41%

OPERATING MARGIN RATIO

55.59%

NET MARGIN RATIO

54.59%

RATE OF ROI

468.84%

NET RATE OF ROI

460.41%

ASSETS TURN OVER

843.33%

CAPITAL WORKING TURN OVER

231.37%

MARGIN TO DEBT RATIO

1984.42%

MARGIN TO EQUTY RATIO

4604.08%

DEBT RATIO

69.88%

EQUITY RATIO

30.12%

DEBT TO WORKING CAPITAL RATIO

6.37%

DEBT TO EQUITY

232.01%

EXPLAINS payback period of investment (in year, should be below of project period) present value in the future compared with current investment value must be above 1 Minimum selling in Rupiah in a harvesting period total minimum selling quantity in a season Total production cost should be under selling value (under 100%) Profit value before tax is above expected profit value + income tax income value after tax is above expected profit value profit value before tax is above 100% investment value of fixed assets profit value after tax is above investment value of fixed assets 0 selling value is above 100% of capital working 0 selling value is above 100% of capital working comparison with equity ratio comparison with debt ratio loan versus capital working loan versus own capital

ITEM

QUANTITY

PRICE/QTY

TOTAL PRICE

AGES

DEPRECIATIONS

YEAR

MONTH

@ YEAR

@MONTH

@SEASONS

TOTAL

Land

120

Building Machine for planting paddy Machine for harvest paddy

unit

15,000,000

3,000,000

250,000

1,500,000

30,000,000

unit

70,000,000

120

7,000,000

583,333

3,500,000

70,000,000

unit

150,000,000

120

15,000,000

1,250,000

7,500,000

150,000,000

Machine for dry paddy Machine for opening unhulled rice skin ("pemolesan gabah")

unit

250,000,000

120

25,000,000

2,083,333

12,500,000

250,000,000

unit

70,000,000

120

7,000,000

583,333

3,500,000

70,000,000

Hoe (cangkul)

unit

100,000

5,000,000

416,667

2,500,000

78,549,789

Sickle (arit)

unit

25,000

1,250,000

104,167

625,000

19,637,447

Machine for pest (penyemprot hama)

unit

150,000

7,500,000

3,750,000

312,500

1,875,000

58,912,341

67,000,000

5,583,333

33,500,000

727,099,577

TOTAL

568,750,000

ITEM

VALUE / GROWTH AGES

RESULT IN THE PRODUCTION UNIT

280,000

SELLING PRICE PER PRODUCTION UNIT TOTAL SALES FIXED COST NO ITEM

10,000 2,800,000,000 VALUE / GROWTH AGES

TOTAL

Building Machine for planting paddy Machine for harvest paddy Machine for dry paddy Machine for opening un-hulled ("pemolesan gabah") Hoe (cangkul) Sickle (arit) Machine for pest (penyemprot hama) TOTAL FIXED COST VARIBLE COST NO ITEM SEEDS COST PADDY SEEDS "G1 Wijaya" total cost "seeds" FERTILIZER COST Organic fertilizer "G1 Wijaya" Pest Liquid organic

3,000,000 7,000,000 15,000,000 25,000,000

30,000,000 70,000,000 150,000,000 250,000,000

7,000,000 5,000,000 1,250,000 3,750,000 67,000,000

70,000,000 78,549,789 19,637,447 58,912,341 727,099,577

VALUE / GROWTH AGES 15,625,000 15,625,000 225,600,000 20,000,000

TOTAL 490,936,179 490,936,179 7,088,332,924 628,398,309

rice

TOTAL

2 x 10 TH

kg/ ha

2,800,000

rupiah/kg

21,899 61,318,437,599

skin

ITEM Brown Liquid fertilizer "G1 Wijaya" Fonska Alfa liquid "G1 Wijaya" Growth Up freight in (Surabaya –West Kutai) - truck total fertilizer cost LABOUR COST clearing and bounding seeding ("pembenihan") planting seed maintenance for fertilizer maintenance for clearing grass & weeds harvesting paddy drying un-hulled rice opening un-hulled rice skin ("pemolesan") supervisor total labor cost TOTAL VARIABLE COST

VALUE / GROWTH AGES 1,750,000 48,000,000 7,500,000 100,000,000 402,850,000 100,000,000 12,000,000 20,000,000 40,000,000 20,000,000 30,000,000 100,000,000 100,000,000 3,000,000 425,000,000 843,475,000

TOTAL 54,984,852 1,508,155,941 235,649,366 3,141,991,544 12,657,512,937 3,141,991,544 377,038,985 628,398,309 1,256,796,618 628,398,309 942,597,463 3,141,991,544 3,141,991,544 94,259,746 13,353,464,064 26,501,913,179

ITEM TOTAL SALES SALES PRICE/QUANTITY TOTAL FIXED COST TOTAL VARIABLE COST VARIABLE COST/QUANTITY ANALYSIS BEP In MONETER (TOTAL AREA) BEP IN PRODUCTION QUANTITY (TOTAL AREA) BEP IN PRODUCTION QUANTITY (TOTAL AREA)

VALUE

VALUE 61,318,437,599 21,899 727,099,577 26,501,913,179 9,465

2,800,000,000 10,000 67,000,000 843,475,000 3,012 95,884,285 IDR 9,588 KG 9.59 TON

2 x 10 TH

95,884,285 IDR 9,588 KG 9.59 TON

ITEM BEP In MONETER (TOTAL AREA) / HEKTARS BEP IN PRODUCTION QUANTITY (TOTAL AREA)/HA BEP IN PRODUCTION QUANTITY (TOTAL AREA)/HA

VALUE / GROWTH AGES 1,917,686 IDR 192 KG 0.19 TON

TOTAL

2 x 10 TH 1,917,686 IDR 192 KG 0.19 TON