Rita A.Widiadana and Wasti Atmodjo, The Jakarta Post, Nusa Dua, Bali
Despite the fact that Indonesia's rubber plantations covers the largest area in the world with around 3.3 million hectares, the country comes second to Thailand in terms of production due its low yield levels, says a senior government official.
Achmad Suryana, director general for agricultural research and development at the Agriculture Ministry, said Thursday that besides having lower yields, Indonesia's rubber was also of lower quality compared to Thailand's
Speaking during a two-day rubber conference, he said that production problems were due to the fact that most rubber plantations were owned or managed by tappers who lacked not only capital, but also the technology needed to boost production and improve quality.
Vice President Jusuf Kalla is scheduled Thursday to address the annual gathering, which brings together experts, policy makers and rubber-industry stakeholders from 16 member countries, including India, Thailand, China and Malaysia.
Indonesian's foreign exchange earnings from rubber exports increased by 60 percent to US$4 billion in 2006 from $2.58 billion in 2005.
This year, rubber output may rise 4.9 percent to 2.77 million tons as the area under rubber has increased to 3.3 million hectares from 3.29 million previously, Mukti Sardjono, director for perennial crops, told the conference.
Indonesia expects production to rise 8 percent by 2008 as plantations are expanded and yields improve, an official from the Agriculture Ministry said.
About 85 percent of the 3.30 million hectares under rubber are operated by smallholder tappers, and have very low productivity. Private-sector firms and state-owned enterprises operate the remaining plantations, mainly located in Kalimantan and Sumatra.
The productivity of smallholder plantations varies between 600 kilograms and 800 kg per hectare per year, as compared to 1,300 kg from rubber estates. Thailand and India produce between 1,800 kg and 1,900 kg per hectare a year.
According to Suryana, the low productivity of smallholder plantations in Indonesia was caused by a number of factors. Firstly, the trees in smallholder plantations were grown from low-yielding seeds. Secondly, a large proportion of the smallholder plantations consisted of old and unproductive trees.
Indonesia has the potential to profit greatly from the rubber sector. Currently, the price of standard Indonesian rubber stands at $2 per kg, while processed rubber timber, such as that used for parquet flooring, is worth more than $500 per cubic meter.
Agus Pakpahan, deputy state minister for state-owned companies, said that Indonesia was unable to compete with Thailand and Malaysia because of the low quality of its rubber production.
Most Indonesian rubber was produced by tappers using traditional technology, Pakpahan explained.
He said that Indonesia had failed to develop a mutually beneficial partnership with the growers. "We developed the wrong partnership scheme in the nucleus-smallholder system. This scheme treats farmers only as suppliers. Our links with the farmers are weak and the position of the farmers is even weaker under this scheme," Pakpahan said.