CC BY
22
UDC 332; DOI 10.18551/rjoas.2024-01.11
STRATEGY FOR THE DEVELOPMENT OF COMMUNITY COFFEE PLANTATIONS IN BANJAR REGENCY OF SOUTH KALIMANTAN PROVINCE, INDONESIA
Adie Agustinus*
Master's Study Program of Agricultural Economics, University of Lambung Mangkurat,
Indonesia
Luthfi, Husaini Muhammad, Lecturers Faculty of Agriculture, University of Lambung Mangkurat, Indonesia
*E-mail: [email protected]
ABSTRACT
As a province with the potential for coffee development, South Kalimantan is supported by very potential production land. When viewed from the perspective of the coffee plantation area, Banjar Regency ranks 5th in the coffee plantation area and 6th in production among 15 agricultural commodities, while if viewed from the production side, it is ranked 6th out of 15 agricultural commodities cultivated. The productivity figures for coffee plants in Banjar Regency are pretty high compared to the coffee productivity of the South Kalimantan Province region, namely 520 kg/ha/year or 0.52 tons/ha/year. However, the development of the coffee area and production in Banjar Regency over the last five years has been relatively stagnant, and there has been no significant growth. This research analyses internal and external factors and alternative strategies for developing coffee plantations in Banjar Regency. The research results show that the characteristics that determine the development of smallholder coffee plantations in Banjar Regency are significant efforts to increase farmers' income, support sustainable production, and optimize the potential of the coffee industry in Banjar Regency. The main priority alternative strategies for developing smallholder coffee plantations that have been identified include developing marketing strategies, encouraging innovation in the use of cultivation technology, building partnerships with MSMEs, and using available market information. Strategic steps that must be taken include counseling and technical training for farmers, empowering farmers through training programs and farmer groups, and partnerships with coffee processing MSMEs to increase the added value of products. Investment in cultivation technology to control coffee pests and diseases is also needed, while business capital support from local governments can stimulate industry growth. Better coordination in the supply chain and empowerment of farmer groups through training programs are essential components in achieving sustainable coffee production. The implementation of this strategy must pay attention to environmental, social and economic aspects to create a sustainable and quality coffee industry.
KEY WORDS
Development strategy, smallholder coffee plantations, SWOT.
Coffee is one of the leading commodities in the plantation subsector because it is a product that has good market opportunities both domestically and abroad. Most of the coffee production in Indonesia is exported to meet world market needs. According to the 2020-2022 National Leading Plantation Statistics issued by the Directorate General of Plantations, Ministry of Agriculture in 2020, the export value reached US$ 821,932,000, and the export volume was 379,354 tons, with the country The main destinations are the United States, Malaysia, Egypt, Japan and followed by several other European countries. Indonesia currently occupies fourth place in the world behind Brazil, Vietnam, and Colombia in producing coffee.
As a province with the potential for coffee development, South Kalimantan is supported by very potential production land. However, in the last 5 (five) years, there has been a
decrease in area of 3.25% (equivalent to 483 Ha), which in 2017 was 3,168 Ha and until 2021 it was only 2,685 Ha, with an average decrease in area over five years of 0. 65% per year. Meanwhile, productivity per hectare has also decreased from 2017 to 0.49 tons per hectare; in 2022, it will be 0.38 tons per hectare.
Referring to plantation statistics for 2022, Banjar Regency, when viewed in terms of coffee plantation area, is ranked 5th out of 15 existing plantation commodities, while if viewed from the production side, it is ranked 6th out of 15 agricultural commodities cultivated. The productivity figures for coffee plants in Banjar Regency are in the reasonably high category of coffee productivity in the South Kalimantan Province region, namely 520 kg/ha/year or 0.52 tons/ha/year, although still below the current average coffee productivity in Indonesia 0.7 tons/ha/year. At the same time, the potential that can still be optimized is 2.5 tons/ha/year.
Table 1 - Area and Production of Coffee Plantation Commodities in South Kalimantan with
Community Plantation Patterns in 2021
N Regency Area (Ha) Production (tons/dry beans)
1 Tabalong 559 389
2 Balangan 526 34
3 Hulu Sungai Tengah 322 108
4 Hulu Sungai Selatan 97 4
5 Tapin 48 4
6 Banjar 744 391
7 Tanah Laut 132 61
8 Kotabaru 248 26
9 Tanah Bumbu 9 4
Total 2,685 1,021
Source: Plantation statistics for 2022.
However, the development of the coffee area and production in Banjar Regency over the last five years has been relatively stagnant, and there has been no significant growth. Viewed in terms of climate suitability and land availability, coffee plants have great potential to be developed in Banjar Regency; besides, coffee plants are quite by local culture and are used for coffee gardening, even on a small scale, to meet household needs.
. Based on the percentage of land used for coffee plantations in Banjar Regency, it is still low, namely 1% of the area of plantation business in Banjar Regency that has been cultivated for coffee plants. This condition reflects the excellent potential for expansion of the coffee plantation area in Banjar Regency. On the other hand, Banjar Regency still has the opportunity to develop new plantation areas, including coffee commodities, which can be a regional flagship.
Based on the description above, it is necessary to conduct research regarding strategies for developing coffee plantations in Banjar Regency, South Kalimantan Province. The results of this research can later become a reference for policy-making to support the potential of coffee plantations in Banjar Regency, South Kalimantan Province.
Research purposes:
• To Analyse internal factors and external factors that determine the development of coffee plantations in Banjar Regency, South Kalimantan Province;
• To Analyse alternative strategies for developing coffee plantations in Banjar Regency, South Kalimantan Province.
METHODS OF RESEARCH
This research was carried out in Banjar Regency, South Kalimantan Province. We were starting from March 2023 to July 2023.
The types of data collected in this research are primary and secondary. Preliminary data was obtained directly from sources or experts, as well as farmers and practitioners of oil palm plantations, to obtain information regarding identifying internal and external factors for developing smallholder coffee plantations in Banjar Regency, South Kalimantan Province.
Primary data was collected through interviews, questionnaires and Focus Group Discussions (FGD), while secondary data was obtained from literature reviews and related agencies that support the research topic. The resource persons consisted of 5 farmers from the five largest coffee-producing sub-districts in Banjar Regency, five extension coordinators/instructors from each of these sub-districts and three people from the Banjar Regency Agriculture, Plantation and Livestock Service, and two people from the South Kalimantan Province Plantation and Livestock Service.
RESULTS AND DISCUSSION
Strengths in the IFE (Internal Factor Evaluation) Matrix are the positive internal factors of smallholder coffee plantations in Banjar Regency. In the context of SWOT analysis, strengths are internal factors that can provide competitive advantages for smallholder coffee plantations in Banjar Regency. A deeper understanding of these forces can be used to formulate more effective development strategies, such as increasing high-quality production, taking advantage of land availability, and promoting small-scale coffee with distinctive flavours.
Weaknesses in the IFE (Internal Factor Evaluation) Matrix refer to internal factors that negatively impact or limit the development of smallholder coffee plantations in Banjar Regency. Improvement efforts such as technical training, access to capital, promotion of innovation, and development of Marketing channels can help overcome these weaknesses and stimulate growth in the coffee sector. The following are the strengths and weaknesses of coffee plantation development in Banjar Regency in the IFE Matrix.
Table 2 - IFE Matrix (Internal Factor Evaluation)
N Strengths Average Rating Weight Total Score
1 The climate is suitable for growing coffee 3.80 0.08 0.31
2 Availability of sufficient plantation land 3.70 0.08 0.30
3 The resulting people's coffee has a distinctive taste 3.60 0.08 0.28
4 Availability of human resources 3.30 0.07 0.24
5 Long production life so that it can be a long-term investment 3.40 0.07 0.25
6 The location of the plantation is elementary to access 3.20 0.07 0.22
7 Long farming experience 3.10 0.07 0.21
8 Quality seeds are easy to get 3.00 0.07 0.20
9 Mastery of cultivation technology is still low 2.90 0.06 0.18
10 Coffee farmers who are still less innovative 2.40 0.05 0.13
11 Capital for coffee plantation businesses is significant, while the capital available to farmers is limited/low 2.90 0.06 0.18
12 There is a lack of effort by farmers to process their produce from the coffee harvest they produce 2.40 0.05 0.13
13 Farmers do not control the marketing channels for coffee plantation products 2.50 0.05 0.14
14 Lack of good plantation business management by farmers 3.00 0.07 0.20
15 Less empowered farmer groups 2.70 0.06 0.16
Total 1.00 3.12
Source: Primary Data Processing Results (2023).
Opportunities in the EFE (External Factor Evaluation) Matrix refer to external factors supporting or providing positive growth and development potential for smallholder coffee plantations in Banjar Regency, South Kalimantan Province. These opportunities show significant growth potential in the smallholder coffee plantation sector in Banjar Regency. Farmers and related stakeholders must design appropriate strategies and actions to take advantage of these opportunities, such as improving coffee quality, collaborating with MSMEs, and utilizing supportive government policies. In this way, the coffee sector can grow and develop sustainably.
Threats in the EFE (External Factor Evaluation) Matrix are external factors that can hinder the growth or sustainability of smallholder coffee plantations in Banjar Regency, South Kalimantan Province. Threats can come from various sources and can harm coffee plantation businesses.
Farmers and related stakeholders must take appropriate actions to overcome these threats, such as increasing resilience to climate change, improving monitoring and Control of pests and diseases, and reducing production costs. In addition, strong cooperation with the government and the private sector can also help to face these threats more effectively. With the proper steps, smallholder coffee plantations can remain sustainable and face external challenges better. The following are the opportunities and threats for developing coffee plantations in Banjar Regency in the EFE Matrix.
Table 3 - EFE Matrix (External Factor Evaluation)
N Opportunity Average Rating Weighted Average Total Score
1 The demand for coffee is increasing 3.80 0.10 0.36
2 Available market information 3.70 0.09 0.35
3 Stable coffee prices 3.50 0.09 0.31
4 An excellent collaborative relationship with suppliers 3.20 0.08 0.26
5 Government policies that support people's coffee plantation businesses 3.30 0.08 0.28
6 Development of communication technology 2.90 0.07 0.21
7 Many coffee-processing MSMEs can become partners for coffee farmers 3.40 0.09 0.29
8 Production continuity 3.20 0.08 0.26
9 Limitations of instructors 2.40 0.06 0.15
10 Partnerships with the private sector have not yet been developed 2.50 0.06 0.16
11 The presence of pests and diseases in coffee plants 2.30 0.06 0.13
12 Increase in costs of production facilities 2.90 0.07 0.21
13 Many competitors from other regions 2.50 0.06 0.16
Total 1.00 3.12
Source: Primary Data Processing Results (2023).
Table 4 - SWOT Matrix
IFE Matrix EFE Matrix Strengths (S) The climate is suitable for growing coffee. Availability of sufficient plantation land. The resulting people's coffee has a distinctive taste. Availability of human resources. Long production life so that it can be a long-term investment. The location of the plantation is straightforward to access. Long farming experience. Quality seeds are easy to get. Weakness (W) Mastery of cultivation technology is still low. Coffee farmers who are still less innovative. Capital for coffee plantation businesses is significant, while farmers' capital is limited. There is a lack of effort by farmers to process their coffee harvest. Farmers do not control coffee marketing channels. Lack of good plantation business management by farmers. Less empowered farmer groups
Opportunities (O) The demand for coffee is increasing. Available market information. Stable coffee prices. An excellent collaborative relationship with suppliers. Government policies that support people's coffee plantation businesses. Development of communication technology. Many coffee-processing MSMEs can become partners for coffee farmers. S.O. Strategy Develop marketing strategies that emphasize the unique taste of local coffee to meet increasing demand. Based on supportive government policies, establish training and mentoring programs for farmers to improve productivity and business management. It is building partnerships with coffee-processing MSMEs that utilize easily accessible plantation locations to expand distribution channels. Encourage innovation in the use of technology to optimize long production life and take advantage of stable coffee prices. W.O. Strategy We are forming partnerships with coffee-processing MSMEs to stimulate farmer innovation and increase product-added value. Take advantage of supportive government policies to gain easier access to business capital. We use available market information to develop more effective marketing strategies and reach a broader market.
Threats (T) Production continuity. Limitations of instructors. Partnerships with the private sector have not yet been developed. The presence of pests and diseases in coffee plants Increase in costs of production facilities. Many competitors from other regions. S.T. Strategy Develop production diversification strategies to reduce the impact of potential production continuity disruptions. Invest in cultivation technology to improve understanding and Control coffee plant pests and diseases. We are building strategic partnerships with private companies and the government to provide counseling and technology assistance for farmers. Develop innovative marketing strategies to increase the competitiveness of local coffee products in regional/national markets. W.T. Strategy We are establishing farmer group empowerment programs to support each other and share knowledge in overcoming the limitations of extension workers. We are building strategic partnerships with private companies or financial institutions to support loan programs or capital management for farmers. Improve coordination with all stakeholders in the supply chain to overcome potential threats to production continuity and increased production costs.
Source: Primary Data Processing Results (2023).
After analyzing the internal and external environmental factors that determine the development of coffee plantations in Banjar Regency, South Kalimantan Province, there are four alternative strategy sections: SO Strategy, S.T. Strategy, W.O. Strategy, and W.T. Strategy. The formulation for determining strategies that can be applied to the development of coffee plantations in Banjar Regency is shown in Table 4.
The final stage in determining alternative strategies is using the QSPM matrix. The QSPM matrix results from a calculation by multiplying the weights obtained from the identified internal and external environment with the attractiveness score (AS), producing a total attractiveness score (TAS); then, the AS value is multiplied by the weight to get the TAS value. The results of the QSPM ranking are shown in Table 5.
Table 5 - Ranking Strategy Alternatives from the QSPM Matrix
N Strategy Alternatives Total BAG Rating
1 Develop marketing strategies that emphasize the unique taste of local coffee to meet increasing demand. 7.93 1
2 Based on supportive government policies, establish training and mentoring programs for farmers to improve productivity and business management. 6.27 14
3 Building partnerships with coffee processing MSMEs that utilize easily accessible plantation locations to expand distribution channels. 7.50 3
4 Encourage innovation in the use of technology to optimize long production life and take advantage of stable coffee prices. 7.63 2
5 Forming partnerships with coffee processing MSMEs to stimulate farmer innovation and increase product-added value. 6.80 9
6 Take advantage of supportive government policies to gain easier access to business capital. 6.52 11
7 Using available market information to develop more effective marketing strategies and reach a broader market. 7.43 4
8 Develop production diversification strategies to reduce the impact of potential production continuity disruptions. 6.97 8
9 Invest in cultivation technology to improve understanding and Control coffee plant pests and diseases. 6.63 10
10 Building strategic partnerships with private companies and the government to provide farmers counseling and technology assistance. 7.15 6
11 Develop innovative marketing strategies to increase the competitiveness of local coffee products in regional/national markets. 7.26 5
12 Establishing farmer group empowerment programs to support each other and share knowledge in overcoming the limitations of extension workers. 6.41 12
13 Building strategic partnerships with private companies or financial institutions to support loan programs or capital management for farmers. 7.12 7
14 Improve coordination with all stakeholders in the supply chain to overcome potential threats to production continuity and increased production costs. 6.34 13
Source: Primary Data Processing Results (2023).
Based on the results of calculating the total attractiveness score (TAS), There are four main strategies:
First Strategy Priority. Developing a marketing strategy that emphasizes the unique taste of local coffee to meet increasing demand is given priority as the primary strategy in developing smallholder coffee plantations in Banjar Regency, South Kalimantan Province.
1. Advantages of Marketing Strategy. This strategy is given high priority because it has several advantages:
• Unique Taste: Focusing on the unique taste of local coffee is a significant asset. This can appeal to consumers looking for a unique experience in a cup of coffee. A fantastic taste image can also increase the selling value of the product;
• Rising Demand: Given the ever-increasing global demand for quality coffee, this strategy tries to capitalize on favourable market trends. Local, national, and international market exploration opportunities must be utilized properly;
• Local Brand Development: Highlighting local coffee's unique taste can help develop a strong local brand. A strong brand can increase the competitiveness of coffee products;
• Reducing Price Risk: Focusing on taste image and product uniqueness can help reduce dependence on fluctuating coffee prices in international markets. This can increase the stability of farmers' income.
2. Sustainability. This strategy has the potential to provide long-term benefits:
• Increased Added Value: By highlighting the unique taste of local coffee, the product's added value can be improved. This can generate higher income for farmers and local coffee industry players;
• Long-Term Competitiveness: By building a strong brand image based on unique taste, local coffee products can maintain their competitiveness in regional, national and international markets in the long term.
3. Policy Support. Regional and central governments that support the development of coffee plantations can also more easily support this strategy because it focuses on developing and marketing unique local products;
4. Potential Financial Gains. With improvements in brand image, increasing demand, and increasing local coffee prices, this strategy has the potential to generate significant financial benefits for farmers and coffee industry players in Banjar Regency.
Second Strategy Priority. The second strategy, namely encouraging technology innovation to optimize long production life and take advantage of stable coffee prices, is the second strategy in developing smallholder coffee plantations in Banjar Regency, South Kalimantan Province.
1. Optimization of Production Age and Utilization of Stable Prices. This strategy is given high priority because it tries to overcome two critical problems in the development of coffee plantations: the long production life of coffee plants and fluctuations in coffee prices on the international market. Here are some reasons why this strategy is essential:
• Increase Productivity. The application of modern technology in coffee cultivation can increase productivity. The use of technology, such as efficient irrigation systems or monitoring plant growth with sensors, can help increase crop yields;
• Utilizing the Longevity of Coffee Plants. Coffee plants have a long lifespan, allowing harvests to last for decades if they are managed well. This strategy can help maximize yields from existing coffee plants;
• Take Advantage of Stable Prices. With stable coffee prices, farmers can plan production and sales better. This can reduce the financial risks associated with price fluctuations.
2. Use of Technology. This strategy encourages the adoption of modern technology in coffee cultivation. This has several benefits:
• Pest and Disease Control. Technology can be used to monitor and control coffee plant pests and diseases, which can reduce crop losses;
• Weather Monitoring and Prediction. Technology can also be used for weather monitoring and forecasting, which can help farmers in better agricultural planning, especially in the face of climate change;
• Production Monitoring. The use of monitoring technology can help farmers track and improve production efficiency.
3. Sustainability. This strategy supports the long-term sustainability of coffee production, as well-managed plants will continue to produce good yields for many years;
4. Improved Coffee Quality. With the right technology, the quality of coffee beans can be improved. This supports a marketing strategy highlighting local coffee's unique taste (first strategy);
5. Policy Support. The importance of technology in coffee cultivation can get support from the government in the form of policies and technical assistance.
Third Strategy Priority. The third strategy, "Building partnerships with coffee processing MSMEs that utilize easily accessible plantation locations to expand distribution channels," was given priority as the third strategy in developing smallholder coffee plantations in Banjar Regency, South Kalimantan Province.
1. Expand Distribution Channels This strategy is given priority because it opens up opportunities to expand distribution channels for local coffee products. Here are some reasons why this is important:
• Easier Access to Markets: By partnering with coffee processing MSMEs that use easily accessible locations, coffee products can reach local, national, and international markets more quickly and efficiently;
• Diversification of Distribution Channels: Diversifying distribution channels helps reduce the risks associated with dependence on one or a few primary distribution channels. This can increase business resilience.
2. Collaboration and Innovation. This strategy encourages collaboration between community coffee plantations and coffee-processing MSMEs. This has several benefits:
• Increasing Added Value: Collaboration can produce more diverse and value-added coffee products, such as processed coffee, special coffee, or innovation-based coffee;
• Reducing Distribution Costs: Using existing coffee processing MSME facilities and distribution networks can help reduce logistics and distribution costs;
• Joint Innovation: Coffee processing MSMEs can bring innovation in processing and packaging, while community coffee plantations can contribute with high-quality raw materials. This can create sustainable business opportunities.
3. Local Empowerment. This strategy supports local economic empowerment and contributes to regional economic development. This can strengthen local communities and increase farmer incomes;
4. Policy Support. Policies that support cooperation between coffee plantations and coffee processing MSMEs can facilitate the implementation of this strategy. Local government support is an essential factor in the success of this strategy;
5. Sustainability. Collaboration with coffee-processing MSMEs located near plantations can also support the sustainability of local coffee production. The quality of coffee beans can be maintained with easier access to processing.
Fourth strategic priority. The fourth strategy, "Using available market information to develop more effective marketing strategies and reach a wider market," was prioritized as the fourth strategy in developing smallholder coffee plantations in Banjar Regency, South Kalimantan Province.
1. Understand the Market and Customers. This strategy is given priority because a good understanding of the market and customers is the key to success in marketing local coffee products. Here are some reasons why this strategy is essential:
• Market Segmentation: Using market information can help identify potential market segments. This allows farms to customize products and marketing according to customer needs and preferences;
• Know the Competition: Market analysis helps in understanding the competition in the market. This allows plantations to develop more effective marketing strategies to compete with other players in the coffee industry;
• Anticipate Market Changes: Continuously updated information can help anticipate market trends or demand changes. This allows rapid adaptation to market changes.
2. More Effective Marketing. By understanding markets and customers, plantations can develop more effective marketing strategies. This includes appropriate pricing, appropriate promotion, and efficient distribution;
3. Market Expansion. This strategy also aims to reach a broader market. With good market knowledge, farms can consider expanding into larger regional, national or international markets;
4. Increased Competitiveness. With a more effective marketing strategy, local coffee products can gain more substantial competitiveness in the market. This supports achieving higher prices and more outstanding market share;
5. Production Sustainability. A stable and well-managed market is an essential factor in the sustainability of local coffee production. With a reasonable market understanding, plantations can plan more sustainable production;
6. Responsive to Consumer Changes. Continuously updated market information makes plantations more responsive to changing consumer preferences and behaviour. This can support the development of coffee products that suit market trends.
CONCLUSION AND RECOMMENDATIONS
Internal and external factors that determine the development of smallholder coffee plantations increase farmers' income, support sustainable production, and optimize the potential of the coffee industry in Banjar Regency. There needs to be a comprehensive and coordinated strategy with various stakeholders, including farmers, government, private companies, and coffee processing MSMEs, to achieve success in enhancing individuals' coffee farms.
Alternatively, The main priorities of the people's coffee plantation development strategy that have been identified include developing marketing strategies, encouraging innovation in the use of technology cultivation, Building partnerships with MSMEs, and Using available market information.
Recommendations:
• Implementing a production diversification strategy requires support in counseling, technical training for farmers, and access to modern technology. Governments and private companies can play a role in providing the necessary resources and knowledge;
• Increasing farmers' capacity to manage their plantations must be the main focus. Training and mentoring programs that support farmer empowerment and group empowerment programs, the farmer's principle, can be applied;
• Strategic partnerships with coffee-processing MSMEs can encourage innovation, increase product-added value, and enable knowledge and technology. Technical support and assistance need to be provided to farmers in this collaboration;
• Investment in cultivation technology to control coffee plants' pests and diseases must be increased. Programs want Pest and disease management, and related training should be implemented;
• Local governments need to support more accessible access to business capital through supportive policies. This could include financial assistance programs or loans to coffee farmers;
• Better coordination between all stakeholders in the supply chain needs to be sought. This will increase efficiency, reduce production costs and improve the quality of local coffee;
• Empowerment of farmer groups needs to be encouraged with training and mentoring programs. This will increase farmers' capacity, knowledge exchange knowledge, and support production sustainability.
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