The Government of Indonesia assisted by the United Nations Development Programme and the Food and Agriculture Organization of the United Nations, has been engaged in the project Seafarming Development (INS/81/008) whose main objectives are to develop seafarming in the coastal waters of Indonesia.
As part of the project operations, FAO assigned Mr Peter Gaiger as Marketing Adviser to 5 months consultancy from April to October 1989; the terms of reference were as follows:
to follow up the recommendation of the marketing consultant, Richard Elsy, on potential market outlets for seafarming products;
to elaborate a strategy to realize the market potential including analysis of appropriate handling, processing operations equipment and infrastructure requirement;
to propose suitable arrangements for market development scheme and establish costs of freight and service particularly with the private sectors;
to review and edit INS/81/008 Manual No. 13 on marketing and prospecting of investments in seafarming in Indonesia prepared by Banchong Tiensongrusmee and Soehardi Pontjoprawiro.
The Indonesian marine capture fishery produced 2.02 million t of fish in 1987, or 76% of total fisheries production. Most production is from shallow coastal waters within the archipelago and by artisanal or small-scale commercial fishing activities. Exceptions are a limited high seas fishery for tuna mainly for the export market producing 49 260 t (export volume) in 1988.
Most of the catch consists of finfish with minor quantities of cephalopods, mainly squids and various crustaceans. The commonly caught species are small pelagic fish; a consequence of trawling having been prohibited since 1982.
The only fishing specifically for live catch is limited operations to obtain broodstock for shrimp hatcheries and baitfish for tuna pole-and-line fishing.
The Indonesian marine fishery market is well summarized in Bailey et al. (1987). Handling and distribution systems are generally undeveloped and, apart from Java, much of the catch is processed traditionally before entering the market. A sizeable part of this enters inter-provincial trade where the product flow is towards Java, which with its population of 100 million, has a net deficit in fish products.
In Java, with its better developed road system, increasing quantities of the marine catch are being transported in chilled form to the large urban population centres. The quality of such fish is reduced by poor handling between the time of catching and the transfer of the catch to the port buyer rather than by the distance between port and consumer.
Fish forms a major source of animal protein in Indonesia and the sea fishery catch is supplemented by a much smaller catch from inland waters and a significant and largely traditional freshwater and brackishwater aquaculture. Freshwater and paddy field farming of carp, etc., yielded 184 600 t in 1987 but production has been static in recent years (Table 16 shows outputs).
Brackishwater aquaculture based on the traditional tambak system has been extended and intensified in recent years to produce 192 100 t in 1987.
The experience of aquaculture development in Riau, the most developed province, can provide useful indicators to the limitations on expansion (see Appendix 1).
Milkfish dominated the yield from original tambaks but since the mid-1980s increased investment and technology changed the emphasis from finfish to the export market-directed production of shrimp. In 1988 shrimp exports totalled 56 550 t for a value of $US 500 million, by far the leading fishery export item (Directorate General of Fisheries (DGF), 1989).
In contrast to the marine fisheries and brackish and freshwater aquaculture, finfish seafarming in open coastal waters is a relatively new and minor activity producing an estimated 100 t in 1988. Current statistics collection does not allow for its disaggregation from marine fisheries production.
The total sea area suitable for finfish culture is presently estimated at 3 600 ha (Tiensongrusmee et al., 1989) and less than 10% is in use (author's estimate).
The finfish considered suitable for seafarming are already harvested in the marine capture fishery or in brackishwater culture, where production levels for the most part dwarf those of seafarming. Thus in gross terms a market exists already for current estimated seafarming potential production. In reality, however, production costs in these other sectors are so low as to sustain a sale price at which seafarming would not be viable; in fact, such species are not the only or even the major target species.
The production potential for the seafarming of finfish in Indonesia has been outlined by Chan (1981) and elaborated by Tiensongrusmee et al. (1989a). Various species of five families: Serranidae (six species of groupers and coral trouts), Centropomidae (two species of seabass), Lutjanidae (four species of snappers), Siganidae (four species of rabbitfishes) and Carangidae (four species of crevalles or jacks) are classed as suitable for culture in floating net cages.
Indonesia has 580 million ha of marine coastal waters. Within this vast area, sites considered suitable for finfish culture have been identified in Tiensongrusmee et al. (1989a). Thus the total area is 3 600 ha; only a small proportion of the whole but distributed over 14 of the 29 provinces (Table 13).
These sites meet all the following criteria determined as important for successful seafarming: freedom from exposure to bad weather, pollution or conflicting use of the water body, topography, water transport, salinity, turbidity and nutrient loadings. Factors excluded were proximity to sources of seed, feed, skilled labour or to markets.
Based on these criteria and the guide rule of 500 cages/ha of sea area, the number of cages planned for implementation during the National Plan REPELITA V is assessed by Tiensongrusmee et al. (1989b) to rise from 200 cages in 1989 to 860 cages in 1993. The geographical distribution of planned development is shown in Table 14.
Even this scale of development represents utilization of less than 0.1% of the total area considered suitable. With target production figures of 3 t/four-cage raft the planned development would produce a modest 645 t annually by 1993. This target is the same as that for REPELITA IV which planned for the same number of cages to be operational by 1988. The negligible development within REPELITA IV is attributed to the novelty of seafarming, inadequacy of public support, and lack of investor confidence in profits or returns from investments in seafarming. These make financiers reluctant to provide funds for development. The Internal Rate of Return (IRR) for a model 16-cage farm unit selling 90% of its harvest live and 10% as fresh fish was nevertheless calculated to be 40% for grouper and 38% for seabass whilst IRRs for a unit 100 times larger were slightly lower at 37% and 32% respectively (Tiensongrusmee et al., 1989c).
It is, however, probable that other factors - the shortage of cheap feed, and of suitable fingerlings, motivated skilled labour and accessible markets - have restricted development. It is perhaps desirable that such criteria be incorporated into future assessments of the suitability of certain maritime areas for specific types of aquaculture. This would require a more comprehensive data base on aquaculture inputs and markets than is available at present.
