Agribusiness model: ‘No green agriculture, no agro-eco tourism’
Over 15 years since it has started, Taman Simalem Resort in Karo Highlands, Indonesia well combines business, agriculture and tourism and becomes a model to many. Eddy Tanoto Sukardi, its Director shares a good mix of success recipes.
Bringing up eco-agro tourism
“Taman Simalem Resort started an infrastructure project in year 2001-2002. The vision is to provide eco-agro tourism aspect and to visualize the North Sumatra’s tourism industry especially the Lake Toba. [TSR is located on the hills of north-western part of Toba Lake, which is one of the highest and deepest crater lakes in the world.] The project is sub-financed by the group of [private] investors.
“We started this project with 60 hectares of a bear land with no trees in the first year. In a year later, we acquired another 140 hectares which comprise with forests. The reason why we acquire land with forests is to try to stop the villagers from cutting trees for logging. We also rely on water supply from this forest and it supplies water to the whole project.”
Getting out of a comfort zone
“In 2003, we built orange farm followed by loquat farm. Around 2005, we started planting coffee and tea. At that time, we still did not do organic farming yet. We still did it in the conventional way, still using chemical. We started converting to organic in 2011. About five years ago, we started working with the farmers and that was when GIZ came in. Initially, the team first brought the trainers and persuaded us to convert into organic. They found us a consultant, technology and everything. They supplied us, motivated us and showed us success story from elsewhere. It is GIZ’s sustainable initiative project. [GIZ is an implementing agency on behalf of German Federal Ministry for Economic Cooperation and Development.]
“Simalem in Batak Karo language means cool and pleasing”
“Also, from 2005 to 2011 we saw that the use of chemical had increased, but the productivity had not risen. At the same time, we met a group of farmers nearby who grew tomatoes and potatoes who came to us for help in 2007. They told us about their problems that the use of chemical had increased 10 per cent but their productivity had in fact decreased by 15 per cent. Other than that, they also suffered a lot from insects that pierced into their tomato plantation [due to the pesticide resistant] from the chemical spray. After that, we met the GIZ officer, Mr. Sulaiman. [Sulaiman Ginting is Regional Project Director of ASEAN Sustainable Agrifood Systems based in Medan, Indonesia.]
“It took us four years from 2007 to 2011 to take courage to convert [from the conventional farming practice to organic]. We, initially, did not believe it. We were also very scared. We were worried about our young coffee plantation, our tea plantation and our orange farm. But, our motivation to move into organic is really on the production aspect and also the soil fertility.
“We actually investigated our soil and the result showed that the level of chemical residue had increased. CN ratio [Carbon-to-Nitrogen Ratio] was not that good. The Carbon was increasing very fast so that in 2011 we decided to convert into organic with the encouragement from GIZ team who also wanted to help us to get certified [organic] after one year.
“GIZ had us work with the farmers. And, we have implemented the initiative until today. We still go with farmers—we still supply them with seeds, fertilizer, organic fertilizer, liquid fertilizer, organic pesticide until we buy their products at higher prices than the market rate. This is how we convince the farmers to join us. The productivity has increased. From around five, types of crops we have increased the yield up to 35 crops. The main organic products are avocado and coffee. The rest are vegetables and fruits. The compost that we use is made of cow dungs. The cows are checked by inspectors. [The process has to be] all organic to make sure that we do not feed chemical to the cows. The cows actually eat only grass.
“We have about 50 contract farming farmers. The most active ones are about 30. The rest depends on the seasons. These are very new to the farmers that we train them with all kind of vegetables [growing]. We harvest vegetables three times a week, every Mondays, Wednesdays, and Fridays about 800 kg to 1,000 kg of 35 varieties of vegetables, about 3,000-4,200 kg per week. Some certain crops are difficult to be organic. They depend on the seasons.
“[In the future] It is to have more vegetable crops like sweet potatoes, red beans, and something that will last longer in the supermarket, maybe, also increase plantation crops like coffee or asparagus since it grows well in the weather here. These are easier crops to be organic.
“The agro-facilities were built in 2005. The agro-center, the greenhouses were started to build in 2012. So, all of these projects, the hotel, the agriculture are sub-financed by the investors because we are looking forwards to the long term and we do not really want to get bankrupt. We are motivated by profit and we know that in agriculture it takes time to be profitable. It may take more than 10 years, more than 50 years to be profitable.”
Investing in the young: Part I
“We have an initiative to work with the students. We try to educate the local farmers’ kids. We sponsor them, about 60 students for every four months. So, one year we sponsor more than 120 students.
“Initially, about three years ago before the government started the initiative education programme that school fees were free, we subsidised their school fees. But, since now the government pays for the school fees that it is free for the education, we change to supporting pocket money for them. And, every week we have to observe them. I spend one hour myself talking with them. The fruits of this after we are doing it for three and a half years since 2012. We start to reap some benefits. One day, they will go back and learn to use more compost. Some try to do organic farming in their own farm.
“It is difficult to change the people’s mindset. The only way to change their mindset is from the young. When I came back from Singapore in 2005, we tried to approach the farmers. We tried to talk to the farmers that they supposed to plant this way, but they still refused to change. They said that they had been planting this since my grandfather, my grandmother time and they were enjoying it. Even we told them that they could increase their productivity two times, they still refused.
“We have to start with the young generation. There are school kids that have graduated from the school and come to work with us before they further their studies. We always encourage them to further their study and become a leader. To have enough funds to further their studies they can work with us for one year and after that they continue their studies. What we want from these school children is that they can educate the others like we educate them and become leader of farmers’ groups.
“[At TSR] On the supervisor’s level, they are all university graduates. On the lower level, we use a lot of school students. After they graduate, they want to have work experience for one year and we encourage them to go to school instead of being labors. Since they are graduated, they should go to the university. This is how we ensure the quality of workforce as well. So, we make sure that after graduation, they will come and work with us for one year before they continue their study.
Organic: Losing or winning?
“In 2013, we received a local Indonesian organic standard. Organic leafy vegetables although do not last very long, they do not have a bitter-after-taste compared to the one with chemical spray. Because those use a lot of Urea and that causes a bitter taste especially the spinach. Second is the carrot. Our organic carrots are sweeter compared to those with chemical spray. The guests are aware on that.
“The demand for organic products has increased. In terms of the supply chain, we also supply our organic products to the supermarket every three months as well. I have my people over there standing inside the stores to tell the consumers the benefits of organic and give them flyers [every three months].
“That is also the cause of the increasing demand. We can see that the supermarkets are ordering more from us. There comes a lot of motivation although we are still at loss. We still cannot educate people from the supermarkets yet. They still want to see something very nice. But at least, we manage to educate the consumers that if you see holes in the vegetable, it means they are very pure organic. The insects are not running away from the vegetables [because of the chemical]. We overspend about 5 years since we go organic. But, our loss is cut about 25,000 USD to 15,000 USD. So, that motivates us to continue with this programme.
“The loss is subsidized by the rooms and the meals. So, the tourists subsidize the agriculture. But, if there is no agriculture, there is no tourism. They are related. If you only start a hotel with no agriculture, people will be bored. They are not going to see the scenery for three hours. So, we have to start these agro-activities. At least, take a look around the greenhouse and then appreciate the food better. You know that the vegetables are from the farm. We just want to show this feeling to the guests.
“We show most of our guests that visit us the organic farming and provide them activities that relate to organic farming. One is the coffee processing, tea processing and agro-tour. There is also agro-trekking as well. From 6 am they can trek around our agro-farm and then we also tell them our farm-to-kitchen concept. They can harvest the vegetable in organic farm. They can eat the vegetable they harvest themselves to be served on their plate.
“In term of benefits, because we are certified organic, our food gets more appreciation than before that we sprayed chemical. In term of indirect result, we get impressive feedback and that motivates others to come and see and enjoy the food as well as Lake Toba.
“One thing is that there should be a concern or awareness in this kind of eco-tourism industry. We should not serve bad breakfast or other bad meals to the guests. There should be a revolution that tourism must have education activities. The guests spend more time doing activities. So, we provide eco-activities for them like the jungle trekking, mountain bike and dinner at bonfire. We also have a handicraft center, a shopping mall with local culture.
Strong and healthy from the within
“We sell our organic vegetables to five big supermarkets in Medan. Almost every supermarket in Medan orders from us. Currently, even lower income supermarkets start thinking of us. So, the awareness of organic products is being raised. We export our organic products to another two provinces, Batang and Riau. We tried to export to Singapore but the transport cost is too huge.
“One of our visions is that we plant something healthy and we should promote it to the people nearby first. That means we should encourage people in Medan, our own place, to eat organic vegetable before we spread them to Singapore, Malaysia, or any other countries. We have to make our own people healthier first.
“We are the biggest certified organic veggie producer in Medan, in North Sumatra. There are a lot of vegetable producers that claim that they are organic but they are not certified. We are the only one organic producer in the Sumatra. We claim we are, because actually in other provinces, they are looking for the organic producers and they only call us. But, because of the low production, we cannot supply them. We send them about 100 kg per time, which is not much.
“One of the things we are doing is trying to develop our own website so that people in Medan or in nearby regions can send order to us through the website. So, this is one of the initiatives that we want to start maybe this year or early next year.
“We have a plan [in an oversea market]. We are looking for the serious customers. I mean a joint partnership. They are also willing to invest and want us to supply seeds. They are willing to make contract with us. That is a kind of partner that we want because we are worried that if we make contract with the farmers, after that, they just cut off the supply. It will not be able to be accountable to the farmers.”
By Giri Arnawa, Napaporn Rattanametta, Thitirat Uraisin and Rojana Manowalailao, ASEAN Sustainable Agrifood Systems and Kamol Taukitphaisarn, Better Rice Initiative Asia