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.