Agribusiness cash crops stave off economic crisis

Agribusiness cash crops stave off economic crisis

By Stevie Emilia

CIMANDE, Bogor (JP): The not-so-young executive attentively
watched a man planting chilies and recorded every move with his
handycam.

The activity took place in a field covered by a fiberglass
roof. Rain was teeming down and soil clung to his expensive shoes
and branded pants, but he did not care.

With 30 other people, he was learning how to grow vegetables
using hydroponic technology, which enables plants to be
cultivated in water instead of soil.

The course has been organized by Trubus monthly agriculture
magazine in Cimande, Bogor regency, West Java. The students are
not local farmers but mostly executives and businesspeople from
Jakarta who are interested in trying their hand at agribusiness.
They considered it a prospective business to help them avoid the
effects of the economic crisis.

Syahrizal Meliala, an executive in charge of sales, marketing
and commercial leasing of PT Jakarta Setiabudi Property, was one
of the attentive participants of the hydroponics course.

He said he was participating in the course as a precaution in
the event that his company ended up sharing the same fate as
other property companies.

"At the moment, there's no signs that my company will go
bankrupt like the many other property companies. But even big
companies, like the one owned by Ciputra, are facing a hard time.
And we don't know when the situation will return to normal. Three
years, maybe. Who knows what will happen during that time? So,
I'm doing this just to be on the safe side," Syahrizal, who has
been with the company for four years, told The Jakarta Post.

He signed up for the course to get a clear picture before
starting his own business in chili and vegetable cultivation
using hydroponic technology.

He said he planned to cooperate with a friend who owns some
restaurants.

"Maybe all of my crops will go to his restaurants," he said.

Another course participant, Agus Yanuar, used to work at a
brokerage company. He decided to quit in January when business
was slow and switch to agribusiness.

"I thought it best that I start my own business, something
that I could run from home," Agus said.

Coming from a family involved in agriculture, he did not give
a second thought to starting a new business in this field, in
this case cultivating carrots, tomatoes and maybe chili, and
applying what he could from hydroponics.

"At first, maybe I'll start it at home, not very big. Only for
my family's needs and maybe for my neighbors. If it works out,
then I'll consider the business prospects," Agus said.

"I don't have to own land to start cultivating, I can rent it.
And as to marketing, I can form a partnership," he said
confidently.

Some of the students are not new to agribusiness. Garin
Mayangkara, who has been active in the business for about a year,
has taken two courses each on how to grow chili and vegetables in
lowlands.

"I always learn new things from different courses here," he
said.

Garin said he had to quit his job working for a shipbuilder
because business was painfully slow.

"There had been no orders to build ships for some time because
of the crisis. As the situation got worse, I decided to switch to
agribusiness," said the 38-year-old graduate of the University of
Indonesia.

His decision to turn to agribusiness did not come in seconds.
For some time, after leaving shipbuilding, he tried his luck in
various fields, including hotel renovation and the furniture
business. But all of them turned out to be unfruitful.

Close friends, contractors, also decided to quit their jobs
because of the crisis, he added. That was early in 1998 and they
started looking for a profitable business to turn to.

"When La Nina, the fasting month and Idul Fitri were
approaching, we asked ourselves 'what will become a profitable
business to run?'. Then a friend of mine said that as Idul Fitri
was drawing near, chili prices were bound to go up. Then he asked
me to check on chili," Garin said.

He started doing a feasibility study on the prospects of
growing and marketing chili and contacted several institutions
like the University of Indonesia, the Bogor Agriculture Institute
and Trubus. He also read books.

After adequate research, they decided to start the business.

As first timers, Garin and his four friends were really
serious. In March 1998, they set up the business. They rented 10
hectares of land in Anyer, West Java, and planted chili on 7.5
hectares and cucumber and various vegetables like green peas on
the remaining land.

Cucumber and other vegetables can be harvested every month,
while chili can be harvested after at least eight months in two
periods. In the first period, it is harvested over a staggered
time in which farmers pick chilies in up to 20 sessions. In the
second period, pickers do the work between 15 and 20 times.

Chili brings in big profits.

During the first harvest, which started a week before the
Ramadhan fasting month in December and lasted until middle of
February, Garin said they harvested over 60 tonnes of chili.

He said the chili sold for between Rp 6,000 per kilogram
during early harvest and up to Rp 18,000 per kilogram at the end
of the harvest.

"We got our investment back with the first harvest and if God
wishes, we'll rake in profits during the second harvest," Garin,
a father of one, said hopefully.

To date, they have invested between Rp 450 million and Rp 500
million in chili cultivation. "Some of the investment to grow
chili came from former harvests," Garin said.