AGRIBUSINESS MANAGEMENT SUBSECTOR FOOD
ARIZONA STATE UNIVERSITY
AGB 410 - AGRIBUSINESS MANAGEMENT
WEEK 1
Introduction:
Food is also known as staple food if it is consumed (eaten) regularly by population
groups in large enough quantities to provide the largest share of total energy consumption
generated by food. Food according to Suharja et. al. (1985:12) are materials that are eaten
daily to meet the needs of maintenance, growth, work, and replacement of damaged body
tissues.
Food is the material that is eaten daily to meet the needs for maintenance, growth, work,
tissue replacement, and regulating processes in the body. In addition, some define it as staple
food, which is food that is eaten regularly by a group of people in large enough quantities and
to produce most of the energy sources.
The system of food production or procurement, like the use of food by the body to
achieve nutritional needs, is complex. Food provision is one of the critical issues facing
developing countries in the world. In the agribusiness food system, food procurement has a
close relationship with nutritional adequacy and the economic level of the family. Therefore,
it can be a priority to assist farming families and rural communities in developing their
nutritional adequacy and economy. Food products make a high contribution to meeting the
nutritional needs of the population, such as protein, fat and carbohydrates. Various
malnutrition diseases and health problems suffered by low-income and low-educated people
are caused by low food consumption.
The food agribusiness management system chain includes input subsystem (procurement
of inputs), production process subsystem (cultivation), output subsystem (processing/ agro-
industry and marketing), and supporting institution and management subsystem (Figure 2.1).
1.
Input Subsystem (Raw Material Procurement):
The raw material procurement subsystem is an economic activity that uses and produces
saprongan (food production facilities), in the form of seeds, fertilizers and pesticides.
2.
Process Subsystem (Cultivation)
The production business subsystem, which is an economic activity that uses saprongan
to produce primary products, such as grains, wheat, and secondary crops (corn, soybeans, and
green beans).
3.
Output Subsystem (Agroindustry and Marketing):
The processing subsystem is an economic activity that processes primary products into
secondary (processed) products, such as bread, pop cron, soy sauce, tofu, and mung bean
juice. Meanwhile, the product marketing subsystem is in the form of marketing primary and
secondary products, either through intermediaries or directly to end consumers and
institutional markets.
4.
Supporting Service Subsystem:
Supporting services consist of financial (banking), infrastructure (infrastructure and
facilities), research and development (R&D), food counseling and consultants, food
information services, and government policies.
5.
Management:
Implementation of management functions in each food agribusiness subsystem, such as
planning, organizing, directing, controlling, and evaluating.
The food agribusiness system can be viewed as a management unit in a food business
unit. For example, soybean farmers conduct agribusiness activities as a business management
chain that is integrated into a soybean business unit. (1) Activities in the raw material
procurement subsystem include the provision of soybean seeds, fertilizers and pesticides;
(2) production business activities (cultivation) including land preparation, seed planting,
maintenance, and harvesting; (3) marketing activities including soybean marketing either
through intermediaries or to final consumers; and (4) supporting service activities in the form
of credit/capital, R&D, insurance, food consultants, and government policies (Figure 2.2).
In terms of the marketing system in Indonesia, soybean crops in large quantities or
parties can generally be sold through cooperatives, although some farmers sell their products
to middlemen (collectors) who then forward them to wholesalers and finally distribute them
to factories. While small parties, in general enough to be sold or channeled alone to the
market home industry (home industry) that cultivate tofu and tempeh.
A.
Agribusiness Management Subsector Horticulture
The term horticulture (horticulture) comes from the Latin hortus and coleren. Hortus
means garden and coleren means business / cultivation of garden plants. Horticulture is a
branch of agricultural activity that has a level of business development ranging from a very
simple form with low capital, to a very modern form of business that is capital intensive in
the form of building facilities and machinery for agricultural equipment.
Horticultural products make a high contribution to meeting the nutritional needs of the
population such as fruits and vegetables. Fruits and vegetables are the main sources of
vitamins (A, B, C, D, E, and K) and minerals. Various malnutrition diseases and health
problems suffered by low-income and low-educated people are due to the low consumption
of fruits and vegetables. In addition, ornamental plants are for inner comfort, while spices and
medicines are for healing various diseases.
Horticulture is a branch of agricultural science that deals with the cultivation of plants
that produce fruits, vegetables, ornamental plants and flowers, and spices and traditional
medicinal raw materials (Soenoeadji, 2001:1).
(1) Fruit crops are a class of horticultural crops whose main product is fruit. After
harvesting, the fruit can be consumed immediately, but there are still some that must be
grown to ripen, and then consumed. This difference in nature has consequences for how or
when to harvest. Post-harvest treatments include curing, storage, packaging, transportation
and marketing. The treatment is intended to maintain its quality so that it is well preserved
until the time of consumption.
The following are given some examples of fruit types, such as a). apple (Pyrus malus);
b). grape (Vitis) which consists of the types of grape ginggurutu (Vitis arocnoidea), galling
ijo (Vitis nodosa), and Saigon (Vitis martini); c). arbei (Fragaria vesca); d).
avocado/alpuket/avocado (Porsea americana); e). sweet star fruit (Averrloa carambola); f).
orange (Citrus) consisting of grapefruit (Citrus maxima), sweet orange (Citrus surantium
sinensis), arrowroot orange (Citrus aurantium), and jamblang orange (Citrus granndis); g).
guava (Eugenia) consisting of water guava (Eugenia aquea), guava (Psidium guajava), bol
guava (Eugenia mollaccensis), keling guava (Eugenia cumini), cashew guava (Eugenia
cumini), cashew guava (Eugenia mollaccensis).
(Anacardium occidentale); h). longan (euphoria longana); i). mango (Mangifera indica)
consisting of mango cengkir, mango arumanis, mango simanalagi, mango gedong, mango
kuweni, mango golek; j). pineapple (Ananas comosus); k). papaya (Carica papaya); l).
banana (Musa); and j). watermelon (Citrullus vulgaris).
(2) Vegetable crops have a much wider distribution than fruit crops and there are also
more types. In addition, the variety is also higher. Vegetables can be in the form of leaves
(young/old), petioles, flowers, flower buds, shoots, stems, stem tubers, root tubers, roots,
fruits (young/old), seeds (young/old), or young plants that are still sprouts.
The following are given some examples of types of vegetables, such as a). cabbage
(Brassica oleracea), which consists of egg cabbage (Brassica oleracea forma capitata),
sprout cabbage (Brassica oleracea forma gemmifera), flower cabbage (Brassica oleracea
forma botrytis), and leaf cabbage (Brassica oleracea forma accephala); b). chili (Capsium),
which consists of red chili/lamb chili (Capsicum annum), and cayenne pepper (Capsicum
frustescens); c). kapri (Pisum sativum); d). kara (Dolichos lablab); e). kecipir (Psophocarpus
tetragonolobus); f). beans, consisting of long beans (Vigna sinensis), beans (Phaseolus
vulgare); g). spinach (Amarantus); h). white pumpkin (Lagenaria leucantha) and red
pumpkin (Cicirbita moschota); i). radish (Raphanus sativus); j). onion (Allium) consisting of
shallots (Allium cepa), garlic (Allium sativum), and Bengal onion (Allium fistulosum); k).
celery (Apium); l). cucumber (Cucumis sativus); m). carrot (Daucus carota); n). tomato
(Solanum lypersicum); and o). eggplant (Solanum melongena), which consists of Bali
eggplant (Solanum cyphopersicum) Dutch eggplant (Cyhomandra betacea), and black
eggplant (Solanum nigrum).
(3) Flowers and ornamental plants, types of horticultural plants in the flowers and
ornamental group are cultivated for inner comfort and usually the largest consumers are
among the people with sufficient education or more established social status. Production of
flowers and ornamental commodities will increase faster if people's income and education
levels are higher because only this group of citizens can give high appreciation to the beauty
of flowers and ornamental plants.
The following are given some examples of flowers such as a). orchids (Orchidaceae),
which consist of moon orchids (Phalaenopsis amabilis) and dove orchids (Dendrobium); b).
amaryllis (Hippeastrum hybridum) which consists of pink amaryllis (Hippeastrum
ruticulatum), white amaryllis (Hippeastrum candidum) and red-striped white amaryllis
(Hippeastrum vittatum); c) daffodils (Crinum asiaticum); d) roses (Rosaceae), e). sedapia
(Polyanthes tuberosa), f). gladiolus (Tridaceal); and g). jasmine (Rubiaceae).
(4) Spice-producing plants and raw materials for traditional medicinal plants are still
marginalized when compared to the three commodities mentioned above. Spice-producing
plants and traditional medicine raw materials are generally cultivated in simple yards and the
marketing network goes through a longer chain. From the farmer or raw material seeker, it
goes to the village intermediary trader, then to the market shelter and then to the herbal
medicine factory.
The horticultural agribusiness management system chain includes input subsystems
(procurement of saprorti / horticultural production facilities), production process subsystems
(cultivation), output subsystems (processing / agro-industry and marketing, and marketing)
supporting institutions, and management (Figure 2.3.).
1.
Input Subsystem (Raw material procurement)
Raw Material Procurement/Production Subsystem is an economic activity that uses and
produces saprorti (horticultural production facilities), in the form of seeds, fertilizers, and
pesticides.
2.
Production Process Subsystem (Cultivation)
The production business subsystem is an economic activity that uses saprorti to produce
primary products, such as fruits (durian, rambutan, oranges, etc), vegetables (cabbage,
spinach, etc), flowers and ornamental plants (orchids, suplir, asoka, etc), as well as spices and
medicinal raw materials (temulawak, ginger, turmeric, etc).
3.
Output Subsystem (Agro-industry and marketing)
The processing subsystem is an economic activity that processes primary products into
secondary (processed) products such as fruit juice, dried vegetables, and herbal medicine.
While the marketing subsystem is in the form of primary products and secondary products
either through intermediaries or directly to end consumers and institutional markets.
4.
Supporting institution subsystem
Supporting services consist of financial (banking), infrastructure (infrastructure and
facilities), research and development, horticultural counseling and consultants, horticultural
information services, and government policy.
5.
Management
The application of management functions in each horticultural agribusiness subsystem,
including such as planning, organizing, directing, controlling, and evaluation.
Horticultural agribusiness system can be viewed as a management unit in a hoticulture
business unit. For example, mangosteen farmers conduct agribusiness activities as a business
management chain that is integrated into a mangosteen business unit. (1) Activities in the
saprorti procurement subsystem include the provision of seeds, fertilizers, and pesticides; (2)
production business activities (cultivation) include land preparation, planting seeds,
maintenance of immature plants (TBM-1, TBM-2, TBM-3, and TBM-4), producing plants
(TM), and harvesting, as well as post-harvest (collection, sorting, packaging, and storage); (3)
Marketing activities include marketing mangosteen fruit either through intermediaries or
to end consumers; and (4) Supporting service activities in the form of credit/capital, R&D,
insurance, horticultural consultants, and government policies (Figure 2.4.).
In terms of the marketing system in Indonesia, the mangosteen harvest can have a high
selling price if the marketing system is improved by paying attention to the institutions that
play a role in the distribution and sales process. The institutions involved are middlemen
(collecting traders), wholesalers, exporters, retailers (markets, shops/supermarkets), and the
beverage industry.
The high selling price of mangosteen fruit can be obtained if producer farmers sell their
products only involving a few marketing institutions (shortening the marketing chain) such as
from producers to retailers (markets and shops), which is the most efficient way. In addition,
if two marketing institutions are involved, such as wholesalers and retailers, it can still be
said to be quite efficient.
B.
Agribusiness Management Subsector Plantation
Plantation comes from the word kebun or ladang, which is a stretch of land planted with
agro-industrial or trade crops, and is a translation of the words estate and plantation.
Basically, plantation commodities include agricultural commodities and are no different from
other agricultural products derived from plants. Because of the way they are cultivated, the
results are traded are mainly exported and for agro-industrial processing materials, they are
grouped under plantation commodities.
Plantation business is essentially a business of producing and marketing plantation
commodities, which are commodities that are generally raw materials for agro-industry or
upstream agro-industry from the processing industry.
Plantation commodities as determined by the government in this case the Department of
Agriculture (Deptan) are divided into two groups, namely perennial crops and annual crops.
Perennial crops include cocoa, rubber, coffee, tea, coconut, oil palm, coconut palm, quinine,
cinnamon, cloves, kapok, pepper, nutmeg, cashew and so on. While annual crops are
sugarcane, tobacco, cotton, rosela, and jute.
Of these plantation commodities, some are strategic commodities for certain countries
that require significant government intervention. Coffee (Brazil, Columbia, Ivory Coast, and
Uganda), rubber (Malaysia, Indonesia, and Thailand), tea (India, and Sri Lanka), sugar
(Cuba, Philippines, and Indonesia), jute/straw (Bangladesh and Indonesia), tobacco
(Indonesia), and cloves (Zanzibar and Indonesia) (Najib, 2000:2). Generally, the strategic
value is determined by the amount of contribution to national income, the number of people
involved in production, and the role in national and international trade.
The plantation agribusiness management system chain includes the input subsystem
(saprobun procurement), the production process subsystem (cultivation), the output subsystem
(processing/agroindustry and marketing), and the supporting institution and management
subsystem (see Figure 2.5).
1.
Input Subsystem (Procurement of raw materials/production)
The raw material procurement subsystem is an economic activity that uses and produces
saprobun (seeds, fertilizers and pesticides).
2.
Production Process Subsystem (Cultivation)
The production business subsystem is an economic activity that uses saprobun to
produce primary products, such as cocoa beans, rubber, tea leaves, tobacco leaves, coffee
beans, and palm oil.
In terms of farming activities in the field, these are land clearing, plant preparation,
nursery, planting, maintenance of TMB (immature crops), maintenance of TM (mature crops)
and harvesting and transportation, respectively. For annual crops such as tobacco, rosella,
cotton, and sugarcane, due to the short lifespan, there is no distinction between immature
crops (TBM) and mature crops (TM) from the planting to harvesting phase lasting one year in
one fiscal year. In contrast, for perennials such as coffee, the TBM phase can last between 2
to 8 years.
3.
Output Subsystem (Agro-industry and marketing)
The processing subsystem is an economic activity that processes primary products into
secondary (processed) products, such as chocolate candy, tea bags, cigarettes, and oil.
In terms of agro-industrial activities in factories, each commodity cultivation is
different, but in general there is the same pattern. The process is the receipt of crops from the
garden, disposal of unnecessary materials, purification, giving shape / form, drying / reducing
water content, sorting, and packing (packing). Then to find out the process of agro-industry
plantations of various commodities, you can read the literature related to these commodities.
The plantation marketing subsystem is in the form of primary products and secondary
products, either through intermediaries or directly to end consumers. Marketing of plantation
commodities nationally can be used components of the marketing mix and marketing
environment (Table 2.1), namely product, price, place / distribution, promotion, consumer,
competitor, economic factors, and legal aspects (Najib, 2000: 39).
Products with standard quality generally come from large state and private plantations.
For products from smallholder and private plantations, the quality is usually below standard
so that the price often falls and is detrimental. To overcome this situation, some plantation
entrepreneurs or traders conduct processing or re-sorting.
Price, for large state-owned or private plantations can follow price records from the
markets of Singapore, London, New York, and so on. However, smallholder plantations do
not know the price, so they are easily manipulated by middlemen or intermediary traders. The
prices are sometimes very low because the farmers are already ensnared by -ijon‖. For plasma
or intensive farmers, the purchase price can be negotiated between the farmer, the
cooperative, and the company.
Place/distribution, until now the sale of plantation commodities for export is at f.o.b.
prices. (free on board). Free on board according to Stanton (1996: 357) is the seller only
pays the cost of loading goods on the ship, which is less profitable because the seller is very
dependent on the arrival of the ship. As we know, the national commercial ship fleet is still
not strong and limited in number. With the expansion of plantations spread throughout the
country, the need for an inter-island sea fleet and port infrastructure is urgent. If this is not
met, then the abundant products in the development areas cannot be distributed or are delayed
and will result in a decrease in quality.
Promotion, because plantation commodities are mostly agro-industry raw materials,
there is no progressive promotion. Promotion can only be done for commodities agro-
industry products such as chocolate candy, tea bags, cigarettes, and so on.
Consumer, plantation products for domestic use and not sufficiently exported are sugar,
cotton, and rosella. For cocoa, some are exported and some are imported due to
considerations of type in addition to quantity. Granulated sugar is sold to the domestic market
through Bulog, cotton through local textile factories, and gunny sacks for sugar factories as
well as other products, such as cocoa and coffee.
Competitors, as Indonesia's competitors in the international market, for rubber are
Malaysia and Thailand; palm oil is Malaysia; coffee is Brazil, Columbia, Uganda, Kenya, and
Ivory Coast; tea is India, Sri Lanka, and Kenya; and cocoa is Brazil, Ghana, Nigeria, and
Malaysia.
Economic factors, for entrepreneurs, include high bank interest rates and inflation rates.
Such circumstances make it difficult to compete in the international market. With the increase
in the price of materials and labor in the country, the cost of production has a tendency to rise
every year.
Legal aspect, with government deregulation, the private sector is encouraged to invest.
Deregulation includes simplification of licensing procedures and ease of obtaining credit.
Among the plantation commodities subject to export quotas, in the event of world
oversupply, are coffee and tea. The quota is imposed on members of the ICO (international
coffee organization). Members include coffee producing and consuming countries that are
bound by the ICA (international coffee agreement). In recent years no quota has been
imposed for tea, as there is a balance between supply and demand.world demand. Among the
plantation commodities for which there is government intervention are sugar, palm oil,
coffee, cloves, and cotton, respectively.
4.
Supporting Service Subsystem
Supporting services consist of financial (banking), infrastructure (infrastructure and
facilities), research and development, human resources and human nature, education,
plantation counseling and consultants, plantation information services, and government
policy.
5.
Management
The application of management functions in each plantation agribusiness subsystem
includes planning, organizing, directing, controlling, and evaluating.
The plantation agribusiness system can be viewed as a management unit in a plantation
business unit. For example, cocoa farmers conduct agribusiness activities as a business
management chain that is integrated into a cocoa plantation business unit. (1) Activities in the
raw material procurement subsystem include the provision of seeds, fertilizers, and
pesticides; (2) production business activities (cultivation) in the form of planting,
maintenance, pruning, and harvesting as well as post-harvest (drying or fermentation); (3)
marketing activities include marketing cocoa products either through intermediaries or to
final consumers; and (4) supporting service activities in the form of credit/capital, R&D,
insurance, plantation consultants, and government policies (Figure 2.6).
In terms of the marketing system of smallholder plantations in Indonesia, the marketing
of cocoa yields from smallholder plantations is different from that of large plantations, due to
the small amount of yields and unsatisfactory quality. In some regions, smallholder cocoa
marketing actors are intermediary traders, intermediary traders at the subdistrict level,
interinsular traders/exporters at the district level, and exporters at the provincial level. There
are also traders or middlemen who buy cocoa fruit and then with their own fermentation
equipment ferment it, because this will obtain better quality cocoa beans.
For large plantations, the marketing of cocoa beans is done by KPB (Joint Marketing
Office) which is generally located in production centers. Furthermore, the KPB conducts
transactions with exporters and cocoa bean processing factories in the country. Target
countries for cocoa bean exports include Western Europe, the United States, and Asian
countries. The obstacle is that exports are still low, because the quality of cocoa beans is still
low, especially cocoa beans from plantations.
This is due to the lack of perfection of the farmers in carrying out the fermentation
process, which will reduce the image of cocoa in the international cocoa trade.
C.
Agribusiness Management Subsector Animal Husbandry
Livestock agribusiness (cattle raising) began to be recognized and developed in
Indonesia around the mid-1980s. Livestock agribusiness is an integrated and comprehensive
livestock management system that includes all activities ranging from distribution of
livestock production facilities (sapronak), production business activities (cultivation), storage
and processing/agro-industry, as well as distribution and marketing of livestock products
supported by supporting institutions such as banks and government policies.
In general, the types of livestock business that can be chosen if you want to engage in
the business include part-time business, branch business, main business, industrial business.
(1) Part-time business, people who have other jobs such as farmers, employees, or
entrepreneurs can engage in livestock business where the business can help increase
household income. Some livestock businesses that can be used as part-time include laying
hens, laying ducks, laying quails, dairy goats, and broiler goats; (2) Branch business, not only
helping income, but already acting as one of the sources of income, for example farmers
raising fish under their chicken coop where the profits obtained can reduce the cost of fish
feed because chicken manure can be used as feed; (3) Main business, this type of business
can be used as the main business and other businesses are only part-time; and (4) Primary
business, this type of business can be used as the main business (4) Industrial businesses,
which can be managed industrially with legal entities, such as beef cattle, dairy cattle, and
chicken farms (Rahardi and Hartono, 2000:2).
The livestock agribusiness management system chain includes the input subsystem
(procurement of inputs), production process subsystem (cultivation), output subsystem
(processing/agro-industry and marketing), and supporting institution and management
subsystem (Figure 2.7).
1.
Input Subsystem (Material procurement)
The material procurement subsystem is an economic activity that uses and produces
inputs (seeds, animal feed, medicines, and complementary equipment). In this subsystem, the
products produced can be hatching eggs, livestock seeds such as DOC (day old chick) for
chickens, DOD (day old duck) for ducks, feed, medicines, and livestock equipment such as
vaccination tools.
2.
Production Process Subsystem (Cultivation)
The production business subsystem is an economic activity that uses inputs to produce
primary products (fresh meat, fresh milk and eggs for consumption). Businesses that develop
in this subsystem include broiler breeds, layer breeds, ducks, sheep, and dairy cattle,
including fattening livestock, such as sheep and beef cattle.
3.
Output Subsystem (Agroindustry and Marketing)
The post-production subsystem is an economic activity that processes primary products
into secondary (processed) products, such as corned beef, sausage and cheese. Meanwhile,
the marketing subsystem is an economic activity that markets primary products (fresh meat,
fresh milk, and eggs for consumption) and secondary (processed) products, such as corned
beef, sausages, and cheese, either through intermediaries or directly to end consumers and
institutional markets.
4.
Supporting institution subsystem
The supporting services subsystem is an institution that provides services to the four
livestock subsystems, including banking and transportation. Similarly, support from
extension workers and livestock consultants is needed by farmers in order to improve
business management skills, research and development, and government policies.
5.
Management
The application of management functions in each livestock agribusiness subsystem
includes planning, organizing, directing, controlling, and evaluating.
The livestock agribusiness system can be viewed as a management unit in a livestock
business unit. For example, dairy farmers conduct agribusiness activities as a business
management chain that is integrated into a dairy farming business unit. (1) Activities in the
preproduction subsystem include the provision of dairy cattle seeds;
(2) business activities (2) production business activities (cultivation), including rearing,
feeding, and disease prevention up to the production of fresh milk; (3) post-production
activities, including processing of fresh milk from processing plants and marketing activities
including marketing of fresh milk to intermediary traders as well as processed milk
(sweetened condensed milk and milk powder) to end consumers: and (4) supporting service
activities in the form of credit/capital, R&D, insurance, livestock consultants, and
government policies (Figure 2.8.).
Looking at the marketing system in Indonesia, cow's milk production is generally sold to
dairy factories in Indonesia such as PT Nutrifood Indonesia for example Tropicana Slim, PT
Sari Husada for example SGM milk, PT New Zealand for example anlene milk and so on, or
directly to retailers by selling it to end consumers in the form of fresh milk.
D.
Agribusiness Management Subsector Fisheries
Fishery is an economic activity in the field of catching/cultivating animals/water plants.
Meanwhile, according to Soeseno (1993:10), fishery is an economic activity by a group of
people in the form of catching and cultivating fish or other aquatic animals. Lately, sea grass
(which is actually algae) has also become a targeted creature.
According to the Director General of Fisheries (1975:3), fisheries in Indonesia are
classified into sectors and subsectors, namely (1) marine fisheries consisting of fishing and
aquaculture; and (2) inland fisheries consisting of fishing in public waters and aquaculture,
such as brackish water aquaculture and freshwater aquaculture (ponds, cages, and rice fields).
Meanwhile, according to Soeseno (1983:10), fisheries activities are divided into two types of
businesses, namely (1) fishing in the sea, rivers, swamps, and lakes; and (2) fish farming in
ponds, rice fields, ponds, river banks, lake banks and seasides.
The management system chain of marine and inland fisheries agribusiness consists of 5
(five) series of economic activities in the form of saproik (fisheries production facilities)
procurement and distribution subsystem, production business subsystem, post-production
subsystem (processing and marketing), supporting services subsystem, and management
(Figure 2.9).
1.
Input Subsystem (Raw material procurement)
Marine fisheries input subsystem is an economic activity that produces marine saproic
(fisheries production facilities) in the form of motorboats and motorboats, as well as fishing
equipment in the form of nets and fishing rods. According to Soeseno (1975:34), nets include
trawl, otter trawl, purse seine/ring trawl, and drift gill net and fishing rods, including pole
and line/huhate fishing rod, tonda, rawai, set long line, and drift long line.
The inland fisheries input subsystem is an economic activity that produces inland
saproic (fisheries production facilities) in the form of feed, shrimp seeds (nener) and fish
seeds (benur).
2.
Process Subsystem (Capture and cultivation)
The marine fisheries production business subsystem, which is an economic activity that
uses saproic to produce primary products in the form of fishing activities at sea by fishermen,
such as netting and fishing for tuna, mackerel, snapper, and so on.
The inland fisheries production business subsystem, which is an economic activity that
uses saproic to produce primary products in the form of freshwater fish farming activities by
farmers such as the provision of seeds, making a rearing place (pond/empang), irrigation,
feed and fertilization as well as controlling pests and diseases of carp, tawes, tilapia, shrimp,
and so on.
3.
Output Subsystem (Agro-industry and marketing)
The output subsystems of marine and inland fisheries are agro-industry and marketing.
Fisheries agro-industry is an economic activity that processes primary products into
secondary products in the form of preservation and processing. According to Rahardi et.al
(2000:34) preservation can be in the form of traditional methods such as drying fish, smoking
fish, salting fish, and fermentation (shrimp paste, peda fish, fish silage, fish sauce, and
bekasem) and modern methods such as cooling and freezing. Meanwhile, processing can
include fish crackers, fish flour, fish canning, and shredded fish.
Marketing of marine and inland fisheries is the activity of marketing primary products
and secondary products either through intermediaries or directly to end consumers, exporters,
and institutional markets.
4.
Supporting institution
The supporting services subsystem is an institution that provides services to the four
fisheries subsystems including banking and transportation. Similarly, support from fisheries
extension workers and consultants is needed by farmers and fishermen in order to improve
business management skills and government policies.
5.
Management
The application of management functions in each subsystem of marine fisheries and
inland fisheries agribusiness, such as planning, organizing, directing, controlling, and
evaluating is very necessary.
The marine fisheries agribusiness system can be viewed as a management unit within a
fishing business unit. For example, fishermen conduct agribusiness activities as a business
management chain that is integrated in a fresh marine fishing business unit (tuna/Thunnus
sp). (1) Activities in the marine saproik (fisheries production facilities) procurement
subsystem in the form of motorboats, and fishing gear in the form of pole and line/huhate
fishing rods; (2) production business activities (fishing) in the form of catching tuna by
fishing on the deck of a motorboat; (3) marketing activities include marketing tuna through
intermediaries or directly to end consumers, exporters, and institutional markets; and (4)
supporting service activities in the form of credit/capital, R&D, insurance, fisheries
consultants, and government policies (Figure 2.10).
In terms of the marketing system in Indonesia, tuna fish production is sold through
intermediary traders obtained from fishermen at the TPI (Fish Auction Place), then from the
intermediary then sold to wholesalers. Furthermore, from wholesalers, it is sold/channeled to
retailers, institutional markets (for example, restaurants and hospitals), and exporters, as well
as end consumers who were previously passed by retailers. The role of intermediaries in
marketing is very assisting producers or fishermen in distributing products to reach
consumers based on type, quantity, price, place, and time of need.
E.
Agribusiness Management Subsector Forestry
Forest is a translation of the words forrest (English) and bos (Dutch). Forests are
undulating plains of land that can be developed for purposes other than forestry such as
tourism; or a certain area where the land is overgrown with trees, where wild animals and
forest birds live. In addition, forests are also used as hunting grounds and resting places.
Meanwhile, the definition of forest in Article 1 paragraph (2) of Law Number 41 of 1999 is
an ecosystem unit in the form of an expanse of land containing biological natural resources
dominated by trees in other natural associations, which are inseparable from one another
(Salim 2003: 40).
Forest types can be divided into forests according to ownership, forests according to
function, and forests according to designation. Forests according to ownership consist of state
forests and proprietary forests. (1) State forests are forest areas and natural forests that grow
on non-owned land, and are granted to level II regions with use and management rights,
while (2) owned forests are forests that grow on owned land, these forests are also called
community forests and can be owned by individuals (individually/ jointly) or legal entities.
Forest according to its function consists of protection forest, production forest, nature
reserve forest, and tourism forest. (1) protection forests are forest areas whose natural
characteristics are useful for regulating water systems, preventing floods and erosion, and
maintaining soil fertility; (2) production forests are forest areas for producing forest products
that can fulfill the needs of the community in general, industrial development, and export
needs; (3) deep reserve forests are forest areas whose natural conditions are useful for
regulating water systems, preventing floods and erosion, and maintaining soil fertility useful
for science and technology (IPTEK). There are two types of such forests, namely forest areas
with unique natural conditions, including flora and fauna for the benefit of science and
technology, and wildlife reserve forests are forest areas for living wildlife (wild animals) that
have unique values such as science and culture and are national wealth and pride; and (4)
tourism forests are tourism areas that are specifically designated and fostered and maintained
for the benefit of tourism/hunting tourism. Such forests consist of tourist planting forests that
have natural beauty and are utilized for recreational and cultural purposes, and hunting park
forests that allow regular hunting for recreational purposes.
Forests according to their designation are classified into three types, namely permanent
forests, reserve forests, and other forests. (1) permanent forests are forests, whether existing,
to be planted, or growing naturally within the forest area; (2) reserve forests are forests
located outside the forest area that have not yet been designated and are not property rights. If
necessary, reserve forests can be used as permanent forests; and (3) other forests, forests
located outside the area and reserve forests, such as forests located on land owned or land
encumbered by other rights.
Forests have a very important position and role in supporting the development of the
nation and state. This is because forests can provide maximum benefits for the prosperity and
welfare of the people. In terms of benefits, forests have direct benefits and indirect benefits
(Ngadung cit Salim, 20003:46). Direct benefits are benefits that are felt or enjoyed directly by
the community, i.e. the community can use the main forest products, and the forest can be
used as a source of income various forest products such as rattan, sap, fruits, and others.
While the benefits are not directly enjoyed by the community, but can be felt by the
existence of the forest itself, such as being able to regulate water systems, prevent erosion,
provide health benefits, provide beauty, provide benefits in the tourism sector, provide
benefits in the field of defense and security, accommodate labor, and increase foreign
exchange.
Viewed from the chain of forestry agribusiness management systems, it consists of five
series of economic activities in the form of input subsystems for procurement and distribution
of saprohut, production process subsystems, output subsystems (processing/ agroindustry and
marketing), supporting institution subsystems, and management (Figure 2.11.).
1.
Input Subsystem (Raw material procurement)
The raw material procurement subsystem is an economic activity that uses and produces
saprohut (forestry production facilities) in the form of tree seedlings, fertilizers and
equipment.
2.
Process Subsystem (Cultivation)
The production business subsystem is an economic activity that uses saprohut to produce
primary products, such as sengon, teak, pine and lamtoro.
3.
Output Subsystem (Agro-industry and marketing)
The processing subsystem is an economic activity that processes primary products into
secondary (processed) products such as furniture (chairs, tables, and household furniture),
while the product marketing subsystem is in the form of primary products and secondary
products through the wood processing industry and end consumers (users of processed wood
industry products).
4.
Supporting institution subsystem
Supporting services consist of finance (banking), infrastructure (infrastructure and
facilities), research and development, forestry extension and consulting, forestry information
services, and government policy.
5.
Management
Application of management functions in each forestry agribusiness subsystem, including
planning, organizing, directing, controlling, and evaluating.
The forestry agribusiness system can be viewed as a management unit in a forestry
business unit. For example, teak wood farmers carry out agribusiness activities as a business
management chain that is integrated into one forestry business unit. (1) Activities in the raw
material procurement subsystem include the provision of teak seedlings, fertilizers, and
planting equipment; (2) production business activities (cultivation) starting from land
preparation, planting, maintenance, protection until the stand is declared as mature, as well as
harvesting and producing teak wood; (3) marketing activities include teak wood marketing
through the teak wood processing industry and to consumers; and (4) supporting service
activities in the form of credit/capital, R&D, insurance, forestry consultants, and government
policies (Figure 2.12.).
In terms of the marketing system in Indonesia, teak harvests can be marketed through
the wood processing industry which is then processed into furniture or furniture (chairs,
tables, RT equipment, and so on) and then marketed to direct consumers or exported.
According to Tini and Amir (2003:9) for the type of teak material in the form of tables and
chairs have a fairly wide market abroad, such as folding square tables and steamer chairs
(folding chairs for sunbathing which are usually placed by the family pool), adjustable
folding chairs (knock down garden chairs), and folding slat chairs (dining table chairs at
home or in restaurants).
