Mon, 15 Mar 2010

From: The Jakarta Globe

By Arti Ekawati
Pond after pond stretches out as far as the eye can see in the 450 hectares of fisheries that line the coast in Karawang, West Java. At feeding time, the surface of the water bubbles up as the fish fight over their food.

While this government-owned fish farm, operated by Badan Layanan Umum Pandu Karawang, appears to be thriving, it is only just getting back on its feet after some tough times.

The BLU - or public service agency - that runs the farm is turning to private commerce to spur the turnaround.

Built during the Suharto era in 1984, the farm had its golden years in the late 1980s and early 1990s, producing tens of thousands of tons a year, just as aquaculture was beginning to boom across Indonesia. At the time it specialized in producing tiger prawns, which became one of the country’s most profitable fishery exports, sold to Japan, the United States and Europe.

“This used to be one of Suharto’s favorite prawn farms,” said Nardi, one of the farm’s workers, as he scattered feed into a pool. Every day, he and the other workers cycle around the farm twice a day ensuring that the fish and shrimp get enough food.

Nardi, who has worked at the farm since it was founded, recounted that Suharto often came to Karawang to see the “glorious” farming. He said Suharto’s visits helped bring about improvements to roads and irrigation systems in Karawang, about 70 kilometers east of Jakarta.

But that was then, and despite the best efforts of Nardi and his fellow workers, the farm is far from healthy today.

Much of its equipment fell prey to looters in the aftermath of the 1997-98 financial crisis, leaving it desolated and non-viable as a business until 2003.

“It was a hard time for me and my fellow workers to live during the vacuum and take care of this large shrimp farm without any financial support. There was just me and about 70 workers here at that time, taking care of the place,” Nardi said.

In 2003, the farm was rebuilt by the government, which added other fish such as eel, grouper and nila. Although it has been brought back to life, conditions at the farm are still far from their peak in the late 1980s.

Officials at the farm say it gets only 40 percent of the funding from the government that it needs to cover its costs, so they have turned to private enterprise in a drive to balance the books.

I Made Suitha, the head of the farm, said he had started to rent out some of the ponds to independent farmers. About 60 out of the 450 hectares are rented out in this manner.

“We offer private companies and individuals the opportunity to rent ponds and cooperate to run the place,” Made told the Jakarta Globe during a visit to the farm on Saturday.

The ponds are available on three-year leases, which can be extended with no maximum rent period.

Made has tried to make the proposition “as affordable as possible” at Rp 2.7 million ($294) per hectare of pond per year.

Muhammad Nurdin, head of production at the farm, explained that the rental income was vital to helping the farm cover its high operating costs.

It takes about Rp 180 billion to manage the farming properly for one year. However, the government is only willing to provide about Rp 80 billion, leaving the farm facing a Rp 100 billion shortfall every year.

“We give support to everyone who wants to rent this place, including technical assistance, cold storage and watering systems,” Nurdin said.

Estu, who started renting 50 hectares three months ago, believes he can build a viable business there.

“I mostly cultivate nila fish, as well as eel and shrimp,” Estu said. As the water is kept in good condition, he believes the ponds will yield profitable volumes of fish, especially nila.

“One hectare of fish pond could produce 20 tons of nila fish over three to four months.”

At present, nila sells for about Rp 8,000 per kilogram.

Syamsuddin, secretary of the directorate general of aquaculture at the Ministry of Maritime Affairs and Fisheries, said the ministry encouraged private investment in fisheries, especially to rekindle neglected fish farms.

The government plans to increase output from the 800,000 or so hectares used for aquaculture from 5.2 million tons last year to 16.9 million tons by 2014.

To attract more investors, Syamsuddin said the ministry plans to build cold storage with a capacity of 100 tons per day and a processing unit to support the export of fish from Karawang.