Indonesia - 07 September, 2023
UPPB Juring Raya and Tropenbos Indonesia (TI) attended the "2023 Meeting on Increasing International Market Access and Business Matching for Plantation Business Actors" organized by the West Kalimantan Province Livestock and Plantation Agency in Pontianak, 26-28 July 2023. The activity involves almost all parties related to the rubber commodity supply chains starting from farmer groups, UPPB (Bokar (Crumb Rubber) Processing and Marketing Unit), crumb rubber processing companies, rubber farmer associations, rubber entrepreneur associations (industry), agricultural extension workers, district and provincial Plantation Agencies, district and provincial Industry Services, Regional Office of the Directorate General of Customs and Excise in West Kalimantan, Directorate of Processing and Marketing of Plantation Products, Ministry of Agriculture, Directorate of Export of Agricultural and Forestry Products, Ministry of Trade, as well as NGOs and work projects development team that has attention and work focus on rubber commodity in West Kalimantan Province.
In this event, Triana, Tropenbos Indonesia Project Coordinator for MoMo4C shared experiences regarding the initiation and strengthening of the Juring Raya UPPB as well as the challenges and opportunities of connecting it with crumb rubber processing companies. In her presentation, Triana conveyed the intervention strategy for initiating and strengthening UPPB as an integrated strategy in order to build a sustainable rubber supply chain. One of the strategies implemented is the implementation of the Rubber Agroforestry Farmer Field School, which not only aims to increase farmers' technical capacity regarding cultivation, but is also the starting point for organizing farmers to form UPPB. This experience sharing session also presented resource persons from crumb rubber processing companies, PT Hok Tong and PT Bintang Borneo Persada, as well as UPPB from other districts, UPPB Damai Rindu (Sanggau Regency) and UPPB Sindak Citra (Sambas Regency).
The business matching session of the event revealed the situation and challenges faced by the rubber commodity in West Kalimantan and in Indonesia in general. Of the 16 crumb rubber processing factories in West Kalimantan, only 6 are still operating, but total production is currently below the installed production capacity. This is due to a shortage of raw materials for bokar (crumb rubber processing material) which was previously supplied from smallholder rubber plantations. When further investigated, this occurred because most of the farmers no longer tapped rubber due to low rubber price or had changed their rubber plantations to oil palm plantations. In addition, the low productivity of rubber plantations that are still being tapped is partly due to disease attacks and local clones that need rejuvenation (old rubber plants).
The low price of rubber is influenced by various factors, especially the situation of the global rubber market. As the second natural rubber exporting country in the world, Indonesia and other rubber producing countries have tried to develop market instruments to maintain price stability, but they have not been fully effective. The Directorate General of Customs and Excise, Ministry of Finance, has also contributed to maintaining the crumb rubber processing industry so that it can continue to operate. For example, the provision of KITE facilities (Ease of Import for Export Purposes) such as import duty exemption and non-collection of taxes for imported bokar – from Africa – by several crumb rubber processing companies in West Kalimantan so that they can still produce rubber material for export purposes (in the form SIR = Indonesian Standard Rubber or rubber blocks with technical specifications following Indonesian national standards.
As for farmers as the main actors in the rubber supply chain, various supports have also been given by the Ministry of Agriculture and the West Kalimantan Province Plantation and Livestock Agency. Among them is encouraging the formation and facilitating UPPB so that it can produce clean and quality bokar as well as being a joint marketing platform for bokar for farmers who are connected in the rubber commodity supply chain, in this case partnering directly with crumb rubber processing companies. The West Kalimantan Province Plantation and Livestock Agency continues to boost the formation and facilitation of UPPB which still lag behind compared to other rubber producing provinces in Indonesia.
The next day, UPPB Juring Raya and TI visited PT Bintang Borneo Persada to explore opportunities for collaboration after the business matching session. On this occasion, the UPPB management expressed the challenges faced in providing regular supplies of bokar and improving the quality of bokar. Meanwhile, the company management expressed their commitment to assisting farmers, as what they have done in Kapuas Hulu Regency to produce clean and quality bokar and provide premium prices to farmers.
At the end of the discussion, the company management challenged the UPPB Juring Raya management to use a method of processing bokar that was more efficient and could increase the selling price, namely producing bokar in lump form (bowls) and without soaking. They are willing to buy bokar in the form of lumps or slabs which are usually produced by farmers, and invite the UPPB administrators to compare the difference in prices obtained from the two forms. Based on their experience assisting farmers in Kapuas Hulu who produce bokar in the form of bamboo lumps without soaking, the dry rubber content (K3) for this form is quite high so that the selling price is better than the bokar produced with soaking.
What was conveyed by the management of PT Bintang Borneo Persada motivated the UPPB Juring Raya management to produce bokar in lump form, apart from purchasing bokar in slab form which is still produced by members. They admitted that the method of producing lumps as suggested was more efficient in terms of working time compared to producing slabs. Now they are preparing to send bokar to PT Bintang Borneo Persada as a trial to encourage more of their members to produce clean, quality bokar and have a higher selling value.**