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Market development for citrus from eastern Indonesia

Project ID

SMAR/2007/196

Project Country

Commissioned Organisation

South Australian Research and Development Institute, Australia

Project Leader

Dr Peter Taverner

Email

Peter.Taverner@sa.gov.au

Phone: 

08 8303 9538

Fax: 

08 8303 9542

Collaborating Institutions

Rural Solutions SA, Australia
Indonesian Citrus and Subtropical Fruits Research Institute, Indonesia
South Australia Citrus Industry Development Board, Australia
Assessment Institute for Agricultural Technology, NTT, Indonesia
Assessment Institute for Agricultural Technology, South Sulawesi, Indonesia
Assessment Institute for Agricultural Technology, Southeast Sulawesi, Indonesia
Assessment Institute for Agricultural Technology, East Java, Indonesia
Food Crop and Horticulture Services, Indonesia

Project Budget

$582,066.00

Start Date

01/03/2008

Finish Date

28/02/2011

ACIAR Research Program Manager

Mr David Shearer

Overview Objectives

An earlier ACIAR-funded analysis of the Indonesian citrus market and eastern Indonesian supply chain identified a highly competitive market with opportunity to improve supply chain management and market penetration on products with identified comparative advantage, particularly keprok (mandarins) from regionally specific locations. The general aim of this project is to improve grower returns through the adoption of improved production and post handling techniques and by increasing the understanding of and cooperation among the different segments of the citrus supply chain. The specific objective is to use keprok as a model for developing awareness of 'quality' parameters, product differentiation and the importance of careful postharvest handling, also to introduce and foster market-driven business practices in the keprok supply chain, forging stronger links between farmers and the marketplace.

Progress Reports (Year 1, 2, 3 etc)

Year 1

The project began with preliminary mapping of the Eastern Indonesian citrus marketing system. The result of this mapping was to select 3 localities with citrus of superior or 'desirable' characteristics: Selayar Island in South Sulawesi (Sulsel), Buton Island in South east Sulawesi (Sultra); and the SoE region in West Timor (NTT). All regions grow different and superior quality mandarins (keprok) predominately or exclusively consumed locally.

The general approach of this project was to begin with two distinct objectives at either end of the supply chain and to connect 'in the middle' during the course of the project. Initially, the project activities were predominately in the SoE region, but all regional team members were involved in the NTT activities. This maximised our capacity in one region and provided continuity of experience. This lead to confidence and mutual support for researchers from different regions and provided added benefits. For instance, Balai Pengkajian Teknologi Pertanian (BTPT) researchers involved in the 'hands on' activities in NTT have initiated similar activities in their provinces.

The first year involved the following objectives:
Objective 1: To introduce and foster market driven business practices in the keprok supply chain.
Assessment of the citrus marketplace involved visits, product testing and discussion with supermarkets, distributors, wet markets, traders and collectors. We now have a good understanding of the market requirements for Indonesian citrus, and keprok Soe has significant impediments compared to imported citrus. The major areas needing attention are product consistency, quality control issues, post harvest handling, logistics (especially, refrigeration), and volumes of supply. The supermarkets in Java have very specific market specifications and imported citrus supply chains serve as a model for local product to emulate.

Keprok Soe has significant ground to cover to achieve high volumes of consistent quality into supermarkets. However, several niche opportunities are worth pursuing, and should provide impetuous to improve quality, logistics and supply issues. In particular, the gift or 'ole ole' markets, and smaller (higher value) retail outlets.

The assessment of keprok SoE has been a useful experience and an approach concentrating on similar smaller scale, niche opportunities is also likely to be more effective in Sulawesi.

Objective 2: To develop on-farm crop management practices for improved marketing of keprok

Following discussions with local extension workers and community leaders, growers of the field trials were identified. The initial on-farm trials involved two treatments; 'Best practice' and conventional management (Base practice). The 'Best practice' practices were based on results from previous 'Prima Tani' results, and involved a combination of cultural practices and intermittent irrigation during the dry season. At the beginning of the trial, fruit were sampled from each tree and assessed for sugar:acid and other quality assessments. This provided quality benchmarks to compare treatments in subsequent years. This also provided an opportunity to train researchers from each region in quality assessment techniques and experimental protocols. Training in fruit quality techniques was re-enforced during a later visit to Australia.

Visits were conducted in Sulsel and Sultra in Sulawesi and discussions with local extension workers and community leaders identified some production issues effecting quality and supply of local markets. For instance, on Buton Island growers encourage upward growth by supporting limbs with bamboo poles. This encourages rank, vegetative growth and reduces fruiting. We organised a pruning expert to hold discussions with local growers to develop techniques that best fit the cultural practices of growers. Demonstration plots are planned for this season.

During April 2009, discussions were held with freight shippers, traders and a local supermarket in NTT regarding inter-island shipping keprok SoE. An interested trader has been identified and trials planned in June. The regional trader is a key link in the supply chain, and this activity links both ends of the supply chain activities.

Year 2

The development of the citrus industry has been identified as a priority for several provinces in Eastern Indonesia. An analysis of the Indonesian citrus market and eastern Indonesian supply chain (SMAR/2007/209) identified a highly competitive market with opportunity to improve supply chain management and market penetration on products with identified comparative advantage, particularly keprok (mandarins) from regionally specific locations. The 3 regions identified were the Soe area in NTT, the coastal area near Jeneponto and Bantaeng in South Sulawesi (Sulsel), and Buton Island in South East Sulawesi (Sultra). Effective development within these regions requires a better understand the market potential and supply chain constraints within Indonesia. This is particularly the case, given there are multiple competing sources of citrus, both within and from imported fruit.

The general aim is to improve grower returns through the adoption of improved production and post handling techniques and by increasing the understanding of and cooperation among the different segments of the citrus supply chain. The project began with two objectives at either end of the supply chain, with the aim to connect in the 'middle'.

The major 'connecting' activity this year was the trial shipment of waxed fruit, which involved a regional trader; a key link in the supply chain. The relationship between different partners in the supply chain is important, and an understanding of the roles at each level of the chain is useful. For this reason, the trial deliberately involved a trader, shipping company and supermarkets as a means to demonstrate the whole chain to the team members. We also introduced gentle harvesting, waxing of fruit, market surveys, cool storage and product assessment at retail outlets to highlight ways to improve efficiencies throughout the supply chain.

The first objective was to introduce and foster market driven practices in the keprok supply chain. Initial assessment of the citrus marketplace involved visits, product testing and discussion with supermarkets, distributors, wet markets, traders and collectors. A report was written by Liz Gunner and Karen Shepherd based on market research and experiences with keprok Soe during this project. The report identifies major hurdles to achieve high volumes of consistent quality into supermarkets. However, several niche opportunities were suggested. In particular, the gift or 'ole ole' markets, and smaller (higher value) retail outlets.

The impetus to develop new markets is currently weak, but this could quickly change as significant new plantings bear fruit. The next steps require preparing the product, i.e., providing the quality, volumes and consistency for specific markets, and developing the supply chain. This is probably best implemented in small increments by meeting the specifications of low volume or niche markets. In other words, don't create market expectations that you can not fulfil.

The assessment of keprok Soe has been a useful experience and an approach concentrating on similar smaller scale, niche opportunities is also likely to be effective in Sulawesi.

The second set of objectives was to develop on-farm and post-harvest management practices for improved marketing of keprok. Initially, the project introduced quality awareness and identified potential supply chains for keprok from Soe in NTT. A trial shipment of keprok Soe was monitored by the Indonesian team members from the 3 regions from harvest to retail supermarkets in Surabaya, Java. This work has provided a model to develop similar activities in other provinces, such as Sulsel and Sultra. The project fosters collaboration between these different provinces, with the interaction between each of the AIATs within the provinces critical to success.

The project seeks to develop the personal capacity of AIAT and local agricultural agencies staff from NTT, and Sulsel. The majority of activity has been conducted in NTT, where demonstration plots have been established to compare traditional and 'good practice' keprok production. At the end of each season, fruit has been collected from trees within the demonstration plots and assessed for different quality parameters. AIAT members from other provinces have been involved in 'quality' activities in NTT to gain 'hands-on' training. Visits were conducted in Sulsel and Sultra and discussions with local extension workers and community leaders identified some production issues effecting quality and supply of local markets. For instance, on Buton Island growers encourage upward growth by supporting limbs with bamboo poles. This encourages rank, vegetative growth and reduces fruiting. We organised a pruning expert to hold discussions with local growers to develop techniques that best fit the cultural practices of growers.

Activities included;

Indonesian staff traveled to the Riverland and Sunraysia citrus regions to visit citrus research stations, citrus plant nurseries and commercial citrus packing sheds.
Visits to wholesale produce markets, orange processing plant and supermarket distribution centre and meeting with citrus marketing board executive to discussing marketing of citrus in Adelaide.
Citrus storage trials pre-established at South Australian Research & Development Institute (SARDI), Adelaide, and used as 'hand-on' training of postharvest methods for staff.
Fruit Doctors (Riverland) held a practical workshop on mandarin pruning for the Indonesian staff
Indonesian staff instructed in methods to evaluate decay control chemicals and general hygiene.
Trials conducted on citrus using a range of inexpensive and common food grade preservatives under different conditions.

Location

There are no project locations defined for this project.