RI's flower industry a late bloomer

JAKARTA (JP): A vast country blessed with a wealth of natural resources and a fertile tropical climate, Indonesia should rightfully belong among the top ranks of the world's flower producers.

But studies show Indonesia's flower production lags far behind many other countries, even small ones like the Netherlands, the world's largest producer of flowers.

According to the Indonesian Flower Association (Asbindo), production in the country last year reached Rp 57.5 billion (US$23.59 million), a fraction of the US$250 million recorded by neighboring Malaysia.

A paltry 0.5 percent of Indonesia's production finds its way to the world's floricultural market. Most of this amount is exported to Singapore, which then reexports the flowers after hiking prices by more than 100 percent.

The association predicts that by 2005, exports of flowers will reach between $310 million and $714 million in a world market of $120 billion.

Ismeth Abidin, an advisor of the association, attributed Indonesia's low production to the poor infrastructure in the industry, encompassing the quality of human resources, seedling technology and the distribution system.

"We are far behind other countries in terms of infrastructure for the flower industry, although we have so much potential," Ismeth said.

Indonesia still trails other countries in cultivation of seedlings, he said, despite the fact that the country was the second largest producer of the germ plasm, the material to develop seeds.

Most of the seedlings in the country are still imported, and their import makes up between 30 and 35 percent of the total production cost, he said.

This inevitably caused higher prices of flowers in Indonesia. A bunch of flowers selling for Rp 5,000 to Rp 7,000 here would cost around Rp 1,200 in Malaysia, he said.

Developing seedlings for new species could take about seven years, he said, adding that Indonesia would never catch up with the rest of the world at this rate. In the Netherlands, there are 13,500 kinds of species, and about 3,000 in Thailand.

"We need more cooperation with foreign investors with better technology, like Switzerland, to develop better seedlings," he said.

Ismeth said another challenge was the poor distribution of the products due to the inefficient transportation system.

"We are not ready to export the flowers using our own transportation system," he said.

Airlines would rather carry more lucrative commodities than flowers.

Ismeth said changes in the situation would not be achieved without the support of the government.

He said the government had yet to fully participate in the floriculture development. The industry still lacked incentives and the value-added tax was very high.

"One has to provide at least Rp 30 million to manage a hectare of flowers," he said, adding that the government should subsidize the industry to improve technology.

"Upgrading the infrastructure takes about 20 years of research, and we need to start from now."

He touted the rewards to be gained. "Flower production can contribute as much as Rp 1.5 billion per hectare of land, but we currently generate about Rp 950 million."

Prospects

A concerted strategy will help the industry develop, Ismeth said.

"We can expect to contribute 10 percent of the world's supply of flowers by 2005, or around $12 million, if we take stock of our strength and weaknesses," he said.

"Judging from the amount, the world's largest producers of flowers will face barriers of limited land areas and high production costs. They would most likely shift their attention to Asian countries, and this is when we have quickly grab the opportunity."

Indonesia still has about 60,000 hectares of land available for floriculture estates. These are located on elevations similar to those of Columbia, which is the second largest flower producers in the world, he said.

Independent associations like Asbindo, which groups 20 medium to large floricultural companies, can continue taking an active role in the development of the industry.

Through conducting a monthly forum for information exchanges on seedling cultivation and technology, the companies can expand their business networks. Asbindo is also seeking to lower the production costs by allowing its members to place collective orders for materials such as seedlings collectively.

More importantly, the association is at the forefront in administrative matters, including setting quality and price standards, as well dealing with government regulations.

Ismeth said the association recorded about Rp 40 million in profit last year from production on about 120 hectares of land. He said the companies contributed about 60 percent of the domestic market production.

Asbindo plans to use the profit to establish a distribution center in the country, which would be used to determine the standard of the floricultural products. (das)