Question: Dear Kryon: I live in Spain. I am sorry if I will ask you a question you might have already answered, but the translations of your books are very slow and I might not have gathered all information you have already given. I am quite concerned about abandoned animals. It seems that many people buy animals for their children and as soon as they grow, they set them out somewhere. Recently I had the occasion to see a small kitten in the middle of the street. I did not immediately react, since I could have stopped and taken it, without getting out of the car. So, I went on and at the first occasion I could turn, I went back to see if I could take the kitten, but it was to late, somebody had already killed it. This happened some month ago, but I still feel very sorry for that kitten. I just would like to know, what kind of entity are these animals and how does this fit in our world. Are these entities which choose this kind of life, like we do choose our kind of Human life? I see so many abandoned animals and every time I see one, my heart aches... I would like to know more about them.
Answer: Dear one, indeed the answer has been given, but let us give it again so you all understand. Animals are here on earth for three (3) reasons.
(1) The balance of biological life. . . the circle of energy that is needed for you to exist in what you call "nature."
(2) To be harvested. Yes, it's true. Many exist for your sustenance, and this is appropriate. It is a harmony between Human and animal, and always has. Remember the buffalo that willingly came into the indigenous tribes to be sacrificed when called? These are stories that you should examine again. The inappropriateness of today's culture is how these precious creatures are treated. Did you know that if there was an honoring ceremony at their death, they would nourish you better? Did you know that there is ceremony that could benefit all of humanity in this way. Perhaps it's time you saw it.
(3) To be loved and to love. For many cultures, animals serve as surrogate children, loved and taken care of. It gives Humans a chance to show compassion when they need it, and to have unconditional love when they need it. This is extremely important to many, and provides balance and centering for many.
Do animals know all this? At a basic level, they do. Not in the way you "know," but in a cellular awareness they understand that they are here in service to planet earth. If you honor them in all three instances, then balance will be the result. Your feelings about their treatment is important. Temper your reactions with the spiritual logic of their appropriateness and their service to humanity. Honor them in all three cases.
Sunday, November 30, 2008
Friday, 28 November, 2008 | 19:34 WIB
TEMPO Interactive, Medan:Around 400.000 - 500.000 hectares of protected forest areas in the regencies of South Tapanuli, Central Tapanuli and North Tapanuli will be released to the people. "The area must be opened because people have lived there for many years," said the chief of North Sumatra Forestry Service, James Budiman Siringoringo, in Medan yesterday.
According to James, the North Sumatra Forestry Service will propose releasing the area to the Forestry Department on December 2008.
SOETANA MONANG HASIBUAN
Saturday, November 29, 2008
The Jakarta Post | Fri, 11/28/2008 7:57 PM | Jakarta
Volunteers plant a tree in a city park area in Srengseng, West Jakarta, on Friday. Three hundred volunteers participated in a Jakarta urban greenification program by planting 1,000 trees in the forested park. (JP/Ricky Yudhistira)
The Jakarta Post, Jakarta | Sat, 11/29/2008 11:27 AM
Growing up among dairy cows, Dedy said he gave up on drinking milk when he was a boy, he became bored with fresh milk, having been directly exposed to it and the animals that produce it for so long.
"I don't like milk," Dedy Iskandar, 33, the son of a dairy cattle farmer in Pondok Rangon, East Jakarta said.
Dedy's parents have more than 20 cows, which together can produce more than 70 liters of fresh milk every day. The modest family home looks out over the farm's broad pastures.
Besides Dedy, 26 other farmers, along with more than 1,100 dairy cows live in the area. The farms, which produce more than 4,500 liters of milk every day, are the only authorized dairies left in Jakarta.
According to Wahyuna Rahmani, Dedy's mother, before moving to Pondok Rangon, all the farmers lived in Kuningan, South Jakarta, which was a famed dairy center until the 1990's.
"Dedy's great grandfather owned more than 50 dairy cows in the Kuningan area. They were a good breeders compared to us, we only have a few cattle.
"The government forced us to move because the area was part of a strategic development site, which is now the site of many important buildings," she added.
At the time however, Wahyuna refused to move. She was overwhelmed by the idea of moving to an unknown area and worried about raising cattle in a new place.
The government reserved 11 hectares of land in Pondok Rangon for dairy farmers to live and work on. Deddy's family moved there in 1993. The family packed up their belongings, took five of their dairy cows, and started to build a new life.
"At that time, the area was so silent and empty. It was a miserable place with no trees," Wahyuna said.
The area also has changed a great deal since then. Not only has it become a well-known dairy center, but the cows now compete for space with an every growing number of people, buildings and paved roads.
After 15 years Wahyuna has 22 cattle, including some calves.
Wahyuna said that her cows often give birth to male offspring.
"Usually I rear those bulls to sell. The meat of dairy cattle is so good and more expensive than the other kinds of cattle. It always fetches a good price, especially around the Islamic sacrifice day of Idul Adha," she said.
According to Dedy, the farmers milk their cows twice a day, in the early morning and around midday. "We use margarine as a lubricant to squeeze the cows' teats," Dedy said. Before milking the cows, the farmers first clean their stable, and, after the milking is finished, the farmers feed the cows. The routine is very important.
"The cows have their own routine activities. If we changed anything, it would confuse them and they would produce less milk," he said.
"This is a traditional dairy cattle farm. We hope someday we will be able to afford milking machines," Dedy said.
Deddy is most worried that traditional farmers like him will lose customers because it is so easy to get powdered milk at supermarkets.
"I don't know how much longer these traditional farms can survive," Dedy said. (naf)
Tuesday, November 25, 2008
Tuesday, 25 November, 2008 | 18:30 WIB
TEMPO Interactive, Jakarta:Around 64 percent of tobacco farmers want to change their livelihood after their crops were devastated by insects due to the lack of costly intensive treatment. "Farmers are often the reason to reject tobacco legalization, when in fact the environment itself is not encouraging," said an analyst from University of Indonesia's Demographic Institution, Abdillah Ahsan, at a Tobacco Farmers Panel Discussion in Jakarta yesterday.
The conclusion was a result of a field study conducted in three provinces this year, namely Kendal in Central Java; Bojonegoro in East Java; and East Lombok in West Nusa Tenggara.
Working seven hours for 16.8 years, farmers only get 47 percent (Rp 413.374) from the average national monthly income. Despite the tobacco price increase for the last three years, farmers still receive no benefit, given rising costs of production.
Iskak, 65, a former tobacco farmer who turned to rice farming, said the profit in planting tobacco is only Rp 2,5 million a year per one plantation, which lasts only five months in a year. "By planting rice, we can get Rp 9.5 million per hectare, and we can harvest twice a year, on average," he said. Since 1997, Iskak and a few other farmers have turned to rice farming.
The Jakarta Post, Bekasi | Tue, 11/25/2008 11:26 AM
Residents of the remote Muara Gembong area, 60 kilometers north of Bekasi, on Saturday discovered what they say are fossils belonging to a large, mysterious animal.
Resident Muasim was the first to discover the remains, while digging a fish pond.
Upon his discovery, Muasim thought it was a large chunk of wood. But after he observed it further, he said he saw that it was a piece of bone.
More bones were discovered and after a preliminary reconstruction, it seems the animal was somewhere between 6 to 6.5 meters long.
A total of more than 200 pieces of fossilized bones were discovered. Locals believe the bones belonged to a pre-historic dinosaur.
The head of Muara Gembong Police, Adj. Comr. Lestariyono, said the largest bone was 42 centimeters long.
"We can't be sure what kind of animal this is. We are still trying to contact the archaeological department. They have the required skills." he said.
"For the moment, all we know is that it is an ancient, large animal."
The bones were mostly buried two meters deep, which, according to the police, implies that it might have been buried for more than 200 years.
The Muara Gembong subdistrict office will facilitate a detailed investigation and coordination between the police and the archaeological department, said Makmur Sanusi, head of the subdistrict's public order unit. (hdt)JP
Bali will spend nearly Rp 400 million (US$3,200) to plant the seeds of 1.35 million trees next year, as part of the central government's plan to "green up" the island in anticipation of environmental disasters.
The seeds, including chestnut and mahogany, will be planted inside and outside forests all across Bali, said Dewa Dharma Putra, head of the environmental division of the province's Regional Development Planning Agency.
"However, this is just the number of seeds we will plant, we cannot foresee how many of them will actually grow into trees," he stressed.
Dharma Putra said areas such as southern Badung suffered from a lack of absorption areas, making them prone to floods, while other areas, such as the Seraya district in Karangasem Regency suffered from extreme drought, which might lead to fires.
He added that the areas were categorized according to the state of their degradation, from extremely critical to critical to slightly critical and so on.
"Karangasem has one of the widest critical areas, while areas in southern Badung such as Kuta, Pecatu and Nusa Dua are also categorized as critical and are among our main priorities."
The southern Badung area is the island's main tourism region.
The program, which is part of the Gerhan (forests and field rehabilitation movement) initiative launched by the government in 2004, actually began in Bali in 2006; it has simply been renamed the "Green Bali" program.
The aim of the program is to plant local trees and reduce deforested areas in Bali by a minimum of 9,000 hectares every year.
The latest report from the agency revealed that 20,000 hectares of land in Bali remain in critical condition, a reduction from the 55,000 hectares identified in 2004.
He further estimated that as many as 2.5 hectares of the island's mangrove forests - also a target of the "Green Bali" program - remain in critical need.
When asked about the exact impact of the "Green Bali" movement, Dewa Dharma said several regional agencies, which include the provincial, regional and municipal forestry agencies were still working on identifying the newly improved areas.
"According to our temporary data, there has been a significant reduction in the number of critical areas, but we're still re-capping the exact number. We are doing this along with the identification phase," he said.
This latest data, he said, would serve as a guideline for the agency's future "Green Bali" program, including setting benchmarks of how many of the trees should be planted each year.
Meanwhile, Putu Subagiartha, head of the Bali Regional Development Planning Agency, hoped the re-planting program could increase the island's attractiveness to tourists.
"We have to prove that we can conserve our environment as well as develop our tourism industry at the same time," he said.
Monday, November 24, 2008
Sunday, November 23, 2008
The Jakarta Post | Sat, 11/22/2008 5:39 PM
The Balikpapan city administration in East Kalimantan has issued a new regulation demanding couples to plant a tree before they can obtain a formal recommendation letter.
“That is true. We have made it mandatory for those wanting to get married to submit one tree seedling or else we will not give them a recommendation letter,” said city spokesperson Samauna Rizal as quoted by Antara newswire on Saturday.
A recommendation letter from a local district office is essential for the Religious Affairs Court to process a marriage proposal. Such measure has also been implemented in Sabang, Aceh, and Bandung, West Java.
Rizal said the new regulation was aimed at promoting awareness among the citizens of the importance trees to the natural habitat of human.
“For the mean time, the obligation to plant a tree is only imposed for those wanting to get married. Consider it as a wedding gift for the government,” he said.
He hoped that the planting trees would become a new habit of the citizens of Balikpapan. East Kalimantan has seen massive deforestation due to illegal logging and mining activities.
“Not only for weddings, but also for birthdays, circumcision celebration, party for having a first born or a golden wedding anniversary,” he said. (and)
Thursday, November 20, 2008
Rio de Janeiro (ANTARA News) - Indonesia needs to learn more about agricultural development and research from Brazil, Agriculture Minister Anton Apriyantono said here on Wednesday.
Rio de Janeiro (ANTARA News) - Indonesia needs to learn more about agricultural development and research from Brazil, Agriculture Minister Anton Apriyantono said here on Wednesday.
"We need to learn many things from Brazil," said Apriyantono who is one of several cabinet members accompanying President Susilo Bambang Yudhoyono on a tour of four American countries, including Brazil.
Earlier in the day, he had accompanied President Yudhoyono on a visit to the Brazilian government`s agricultural research institute, Empresa Brasileira de Pesquisa Agropecuaria (Embrapa).
On the occasion, Embrapa executive director Tatiana de Sa briefed Yudhoyono on the activities of the institute which was established in 1973 and being run under the coordination of the country`s agricultural ministry.
At present the institute had 8,400 workers , 2,210 researchers and around 1,000 experts on agriculture who gave advice to farmers.
Tatiana said Embraga`s work to increase agricultural production began to yield results in 1991. For instance, the country`s production of sugar and its derivative ethanol had since then increased by 139.8 percent or at a rate of 15 percent per year.
Anton Apriyantono said Brazil had the widest agriculture area in the world and therefore the country was able to be self-sufficient in food, and even the largest agricultural-commodity-exporting country.
"Of a total of 850 million hectare area of Brazilian land, 366 million hectares are agriculture area, and 210 million hectares are for cow breeding," Anton said.
Compared with Brazil concerning the width of land, he said Indonesia would not possibly be self-sufficient in various agricultural commodities.
Meanwhile, President Yudhoyono said Indonesia would apply Brazilian agricultural technology.
"We want to study the Brazilian concept of technology, research, development and other innovations in order to increase Indonesia`s agricultural production," Yudhoyono said.
He said Indonesia wanted to apply Brazilian agricultural technology to increase its own agricultural and energy production.
"We are convinced that to increase our agricultural production we need coordinated technology, and thus we want to learn from Brazil," Yudhoyono added.
Wednesday, November 19, 2008
Tuesday, November 18, 2008
Ruslan Sangaji, The Jakarta Post, Palu, Central Sulawesi | Tue, 11/18/2008 12:36 PM
A powerful 7.5-magnitude earthquake struck off northern Sulawesi early Monday, killing at least four people, destroying thousands of homes and forcing thousands of residents to flee.
The quake triggered a tsunami warning from U.S. officials for an area within 1,000 kilometers of the epicenter, but a similar alert by Indonesian authorities was withdrawn shortly after being issued, AFP reported.
Indonesian crisis center official Rustam Pakaya said a 56-year-old man was killed and 23 people were injured in Kwandang village, Gorontalo province.
In the neighboring province of Central Sulawesi, Governor H.B. Paliuju said one person had been killed, two injured and hundreds of homes destroyed.
"The victim was killed by a collapsing wall," Paliuju told reporters.
More than 700 homes were flattened in Buol regency, 600 kilometers north of the Central Sulawesi capital of Palu, and another 500 damaged.
The governor said communication links with Buol had been cut during the quake and information was sketchy. "We are still waiting for an updated report from officials there," he said.
The U.S. Geological Survey (USGS) said the earthquake struck 136 kilometers off the coastal town of Gorontalo at a depth of 21 kilometers.
Thousands of people in several villages across Gorontalo province fled their homes for higher ground over fears of a tsunami, Antara news agency reported.
The sea level rose briefly in some areas but no large waves were detected, it added.
The Hawaii-based Pacific Tsunami Warning Center warned the quake had the potential to spawn a destructive regional tsunami and advised authorities in the region to "take immediate action to evacuate coastal areas".
The USGS also reported two powerful aftershocks. An official earlier told AFP that residents of Tolitoli, 250 kilometers away, had also reported collapsed buildings.
"In an earthquake like this, I think it's likely there will be victims," Indonesian geological official Sutiono said.
Indonesia was the country worst hit by the earthquake-triggered tsunami in December 2004 that killed more than 200,000 people in 11 nations across Asia, with more than 168,000 killed in Aceh province alone.
The Indonesian archipelago straddles several continental plates in an area known as the Pacific Ring of Fire, where seismic and volcanic activity is recorded on an almost daily basis.
Monday's quake comes less than a week after Indonesia launched a high-tech tsunami early warning system in a bid to prevent a repeat of the 2004 disaster.
The Rp 1.4 trillion (US$130.2 million) system is meant to be able to detect an earthquake at sea and predict within five minutes whether it could cause a tsunami.
The system, built with German technology and funding from a number of foreign nations, will eventually include 23 or 24 buoys linked by cables to detectors on the ocean floor.
President Susilo Bambang Yudhoyono said at system's launch Tuesday that Indonesia was "living on the edge".
"Three tectonic plates -- the Eurasian, Indo-Australian and Pacific -- meet here," Yudhoyono said.
"This kind of disaster can strike at any time."
Saturday, November 15, 2008
The Jakarta Post | Sat, 11/15/2008 11:16 AM
Sutarno, 26, of Kebasen village in Banyumas regency, Central Java, plows a rice field using a hand tractor to prepare the field for another harvest cycle on Friday. Sutarno is paid per plot, receiving Rp 100,000 (US$8.69) for every bau or 700 square meters, tilled. In a typical day Sutarno can plow two bau. (JP/Agus Maryono)
Friday, November 14, 2008
Yuli Tri Suwarni, The Jakarta Post, Cianjur | Fri, 11/14/2008 2:11 PM
As many as 15 residents of Nyalindung in Cianjur regency, West Java, are feared dead after their homes were buried by a landslide on Thursday evening resulting from recent torrential rain.
The landslide damaged scores of houses, but most residents managed to evacuate in time.
Around 100 police officers, military personnel, volunteers and residents were at the scene attempting to manually evacuate the remaining residents. Their efforts faced difficulties because necessary heavy equipment could not be brought to the isolated area.
"All of the landslides occur in high soil shifting zones," head of the Bandung Volcanology and Geological Disaster Mitigation Center, Surono, said as quoted by tempointeraktif.com on Friday.
Surono added that the West Java towns South Cianjur, South Garut and Sukabumi were at high risk of similar incidents.
"We implore residents living in these high-risk areas to be on alert and to be ready to evacuate immediately upon warning," Surono said.
Padang (ANTARA News) - Saudi Ambassador to Indonesia MA, Al Kayyat, said his country was interested in investment in agriculture and animal husbandry in West Sumatra's fertile land.
After having a close look at the region and learning its high potentials in agriculture and plantations, the Saudi diplomat became interested in investment in the region, he said with the help of an intepreter here on Thursday.
He made the remarks in response to West Sumatra Governor Gamawan Fauzi's call for Saudi investment in that region.
West Sumatra is vast and rich in natural resources and fertile farmland, the ambassador quoted Governor Gamawan Fauzi as saying.
"The land of this region is fertile and very suitable for agricultural products and vegetables," Al Kayyat said.
In addition, West Sumatra also invited Saudi Arabia to invest in animal husbandry for raising goats and sheep, especially in Padang City, Pesisir Selatan and Padang Pariaman districts.
The ambassador said his office would immediately take preparatory measures of investment in the province.
The Jakarta Post, Fri, 11/14/2008 11:04 AM
The Indonesian economy has been generating lucrative profits from the soaring prices of agricultural commodities during the last two years. Following increasing dependency on this business, the recent slump in commodity prices has severely impacted on the economy. The Jakarta Post business section features a special report on commodity sector problems. Here are the stories:
For seasonal farmer Alex Sinaga of Tanjungjabung Barat regency, Jambi, the world is tumbling down around his ears after knowing that his October revenue has dropped by a factor of 10 times following the plummeting global prices for palm oil.
Having previously enjoyed a monthly income of Rp 5 million (US$434 million), six times higher than a university-graduate civil servant in his province, Alex now has to end his shopping spree earlier than expected.
In Jambi, fresh oil palm fruit bunches are now sold at Rp 200 per kilogram, having dropped like a stone from Rp 1,500 per kilogram a few months ago.
Alex is just one example of how Indonesians living in rural areas have already taken a severe knock from the global economic crisis earlier than the government has estimated, since the government initially concluded that the full negative impact would not be felt until the first quarter of next year.
As one of the world's top producers of palm oil, rubber, cocoa and coffee, the Indonesian economy, Southeast Asia's biggest, was making good profits from high agricultural commodity prices earlier this year.
In the first nine months of the year, exports of crude palm oil (CPO), for example, reached $12.12 billion, or 14.5 percent of the country's non-oil and gas exports, according to the Central Statistics Agency.
"Commodity prices soared since 2007 up until early 2008. Clearly, Indonesia benefited significantly from commodity trade, as proven by exports and industry expansion," said World Bank chief economist and senior vice president Justin Yifu Lin recently.
The magnitude of agricultural commodity business is even more significant when remembering that it is estimated to have employed 99.9 million workers, both seasonal and permanent, according to Siswono Yudhohusodo, chairman of the Indonesian Farmers Union (HKTI) advisory board.
Producing an estimated 18.5 million tons of palm oil this year from more than six million hectares of plantation, Indonesia is the world's largest producer of the commodity.
However, with slumping demand from the world's largest importers of palm oil -- China, India and Europe -- local palm oil farmers are now likely to seek more loans from the pawnshop to help ends meet.
The slowing demand has sent the Malaysian CPO benchmark price down to 1,505 ringgit ($419.89) per ton on Wednesday from its peak of 4,486 per ton on March 4, as reported by Bloomberg.
Indonesian Association of Oil Palm Producers (Gapki) chairman Akmaluddin Hasibuan said the plummeting prices had been exacerbated recently by moves from several countries to intentionally default on purchase contracts due to slow demand.
Among the importers carrying out this practice are 30 Indian companies.
"The Indian companies are being unethical by defaulting on their import contracts that have consequently affected our exporters as well as our farmers," Akmaluddin told The Jakarta Post recently.
"We have filed complaints with the Indian government and Indian oil palm-related trade associations but we haven't received any response yet," he said.
There are also contract defaulters in the European Union countries and China.
Indonesia and Malaysia together produce around 85 percent of the world's CPO and account for 88 percent of global CPO exports.
Last year, Indonesia and Malaysia produced about 17 million tons and 15.7 million tons of CPO respectively.
Indonesia recorded exports of $5.5 billion in 2007, with more than 75 percent of its palm oil output being exported as CPO, while by contrast Malaysia posted a higher export revenue of $10.4 billion, with 80 percent of its output exported as value-added products.
In a bid to help bolster the CPO price, Indonesia and Malaysia agreed last week to cut palm oil output by 75,000 tons and around 500,000 to 600,000 tons respectively next year, according to the Agriculture Ministry's director general for plantations, Achmad Manggabarani.
Indonesia also plans to replant 50,000 hectares of oil palm trees while Malaysia plans to replant 250,000 hectares next year.
Achmad hoped the prices of palm oil could then reach its commercially viable level of around $700 to $800 per metric ton.
Meanwhile, Indonesian Vegetable Oil Producers Association (Gimni) executive director Sahat Sinaga said the export drop had actually been developing since 2006 when European countries began to use soybean and sunflower oil as alternatives to CPO for feedstock for biofuel.
Furthermore, he said, the financial crisis and economic downturn had led some foreign buyers to stop ordering CPO due to the drying up of liquidity in their banks, which had previously helped to finance CPO purchases.
"Capacity utilization of CPO production is expected to decline to 48 percent by the end of this year, from 52 percent forecast earlier," said Sahat.
Rubber, coffee and cacao are all experiencing similar problems to those experienced by the CPO sector.
Indonesian Rubber Association (Gapkindo) executive director Suharto Honggokusumo said the price of natural rubber reached its peak at $3.3 per kilogram on June 27 before slumping to its lowest point at $1.53 per kilogram on Sept. 16.
The price has since failed to recover.
With rubber production amounting to 2.7 million tons last year, Indonesia is the world's second biggest rubber producer after Thailand.
Last week, Indonesia, Malaysia and Thailand , which produce between them 70 percent of global natural rubber production, jointly agreed to cut rubber production by 210,000 tons next year by replanting trees.
Robusta coffee also fell to its lowest point at $1.5 per kilogram after peaking at $2.5 per kilogram around three months ago, according to the Indonesian Coffee Exporter Association (AEKI) chairman Hassan Wijaya.
Indonesia is the fourth largest producer of coffee after Vietnam , Colombia and Brazil, producing around 450,000 tons per year of which 250,000 tons are exported.
Cacao also dipped to around $1,930 per ton from a record high of $3,200 per ton around August, according to Indonesian Cacao Association (Askindo) secretary general Zulhefi Sikumbang.
Zulhefi, however, said cacao farmers were relatively safe from price volatility.
"Our farmers are still able to earn profits by selling cacao for around Rp 15,000 to Rp 16,000 per kilogram. They would suffer losses if the price dipped below Rp 11,000 to Rp 12,000 per kilogram," he said.
Indonesia is the world's third largest cacao producer with an estimated production of 500,000 tons. Ivory Coast and Ghana are the first and second largest. JP/Mustaqim Adamrah
Manggi Habir, The Jakarta Post, Jakarta | Fri, 11/14/2008 11:03 AM
Plantation companies are one of the first to suffer from the deepening global downturn. And, as the year end nears, it is plantations with scale of production, the right mix of tree maturity and a conservative balance sheet (low debt and high cash levels), that are best able to weather the storm.
It was only a few months back, that the sector's outlook still looked so bright. Crude palm oil (CPO) prices were on an unprecedented upward climb. Fueled by high economic growth in India and China CPO prices soared to reach a peak of US$1,200 per ton by mid-year, about double its historical prices in the $350 to $600 per ton range.
Reflecting this trend, the share price of Indonesia's three top listed plantation companies, PT Astra Agro Lestari (AALI), PT Bakrie Sumatera Plantations (UNSP) and PT London Sumatera (LSIP) also doubled in 2007, reaching respective peaks of Rp 28,000, Rp 2,275 and Rp 10,650 per share by early 2008.
However, with the consolidation of the global downturn in the second semester, these earlier gains disappeared in a couple of months. CPO prices began their steep decline after June, reaching a low of $500 per ton by November. Reflecting this drop, share prices of the above three companies also fell by more than 70 percent, to reach lows of Rp 8,550, Rp 340 and Rp 2,725 per share, respectively.
This has been a painful awakening for plantation managers after seeing margins and profitability levels rise. So what has been the impact? First, there has been the drop in revenue with falling commodity prices. Costs, on the other hand, are fairly fixed and not easy to adjust downward in this sector. This ultimately translates into narrowing margins and profitability.
For instance, Astra Agro Lestari, the largest of the three plantation companies, showed a steady decline in quarterly net income from Rp 827 billion in the first quarter of the year, to Rp 770 billion in the second and further down to Rp 532 billion in the third quarter.
How have they responded? In the short-term, the response has been on finding ways to control costs and push them downward. This is difficult in a business with a long business cycle. Palm oil tree crops take 3-4 years to plant and grow to first production level, during which time it is all cash outflow. This is then followed by another 6-7 years for a tree to reach its maturity and generate peak yields.
Interestingly, the plantation cost structure has undergone a fundamental change with the rise in oil prices. In 2006, the largest cost component was labor, accounting for 39 percent of total cost.
However, by 2008, with rising gas prices, fertilizer costs have rapidly grown to replace labor as the largest cost component. Fertilizer, which previously accounted for just 14 percent of total cost, now takes up 34 percent of the CPO cost structure.
As a result, it has become the major focus in the sector's cost cutting efforts. Efforts are underway to use fertilizers more efficiently and to look at replacing costly chemical-based fertilizers with natural organic compost waste. The drop in oil and gas prices should help bring down fertilizer prices, although companies have yet to notice and confirm this trend.
In the long term, there is a focus on improving tree crop yields by investing in higher yielding and disease resistant seeds. Currently Fresh Fruit Bunch or FFB yields are about 18.2 tons per year per hectare. This palm fruit is then further processed by mills yielding an average of about 4.2 tons of CPO per year per hectare.
Most Indonesian plantation companies limit their activity to the upstream part of the value chain, focusing on planting, harvesting and processing palm fruits into CPO. Rarely have they ventured further downstream to vertically integrate into the next phase of processing, for example, into cooking oil or cosmetics, where the value added and larger margins are to be found.
There is also little discussion thesedays about investing in biofuel processing plants, with the decline in oil prices.
Plantation owners explain that moving downstream would require extensive investment. This is not limited to large processing plants but also to building distribution networks and marketing capability, as well as investing in creating strong brand names. This, they argue, requires a different skill base.
Besides, they also say, there is much to do already at their end of the value chain. The argument is that it would be more prudent if they focused on what they are good at, which is expanding and investing in their existing processing mill capacity, improving efficiency in their planting phase and increasing yields and then further seeking additional land or acquiring other plantations to plant more hectares and expand their capacity.
Astra Agro operates some 235,000 hectares of tree crops across the islands of Sumatra, Kalimantan and Sulawesi. About 80 percent of its tree crops are mature, with the remaining 20 percent in the planting or immature phase. In a downturn cycle planters prefer to have a larger mature proportion in their tree crop mix as it minimizes the heavy cash outflow found in the initial phase.
With a large mature area, there is also more cash flow generation, even with lower prices. This is why plantation companies that are relatively new or have a larger immature proportion of tree crops are suffering more in this downturn cycle.
Another cost that needs to be managed well in a downturn is financing costs. All commodity companies that face volatile commodity prices tend to have conservative balance sheets, carrying low debt levels in proportion to their capital. Astra Agro, for example, has Rp 1.9 trillion in cash as of September 30, 2008, and practically no debt.
It is too early to tell whether the recession will be long enough to encourage consolidation in this sector. What is sure is that those with scale, an appropriate mix between mature and immature tree crops and a conservative balance sheet should be able to ride out the storm more comfortably than others.
Manggi Habir is Contributing Editor at The Jakarta Post
Thursday, November 13, 2008
Andi Hajramurni and Nurni Sulaiman, The Jakarta Post, Makassar, Samarinda|Thu, 11/13/2008 10:38 AM
The government said Wednesday it had sufficient funds and logistics to handle natural disasters until the end of the year, as regions begin to feel the impacts of a series of floods in the past week.
"We still have enough disaster relief funds for this year, but I forget the exact figure because there are various posts or budgets that can be used for disaster funds," Social Services Minister Bachtiar Chamsah said, adding that there was "no need to worry".
Bachtiar was in Makassar to open the ministry's national meeting to discuss budgeting and the ministry's work and social welfare development plans.
"We have allocated some Rp 500 billion (US$44 million) for disaster relief in the 2009 state budget," he said.
"Food stocks are available at logistics warehouses in each region.
"The supplies can be readily distributed to refugees without requesting permission from the ministry, as we cannot let the victims starve."
Bachtiar said the ministry had also provided evacuation equipment including tents, public kitchens and standby vehicles.
"We have called on all governors, regents and mayors to take immediate take action if disasters strike their areas," he said.
"They do not need to coordinate with the minister, but must act quickly.
"With the current weather conditions, natural disasters may occur at any time. That's why we have to remain alert."
Realizing the limited human resources of his ministry, Bachtiar established a youth disaster response team, known by its Indonesian acronym, Tagana.
The group employs mostly young people as volunteers to help natural disaster victims in various situations including evacuation to reconstruction.
There are currently some 30,000 Tagana volunteers, and Bachtiar hopes this number will reach 40,000 by 2009.
Meanwhile, in Samarinda, floods that hit the capital city of East Kalimantan during the past week have spread, resulting in the death of a boy.
Robby, 12, died after being electrocuted on Tuesday evening while playing in water near a traffic light.
The floods were initially only in North Samarinda district but have now spread to Ulu and Ilir Samarinda districts, damaging public facilities and disrupting the community.
Three schools on Jl. Ahmad Yani and Jl. Gatot Subroto were forced to send their students home while students of the Teaching and Pedagogy Faculty at Mulawarman University must pass through knee-deep water to reach their campus.
Samarinda Mayor Achmad Amins said his administration needed some Rp 1.3 trillion to construct a good drainage system for the city.
"But we have only managed to raise Rp 100 billion, so we are not yet able to handle flood problems properly," he said.
"We need five years at least to rebuild the infrastructure."
Separately, from Bandarlampung a researcher was reported missing since Monday in flooding that has affected the Tanggamus and West Lampung regencies during the past week.
Ahmad Masadi, 30, who was conducting research on the clouded leopard (Neofelis nebulosa) went missing on the Way Pemerihan River in West Lampung.
Meyner Nusalawo, an activist with the Wildlife Conservation Society (WCS), said Masadi had drowned in the flooded river after attempting to cross it.
Meyner said he and Masadi had been doing research at Way Canguk Research Station operated by WCS in the Bukit Barisan Selatan National Park, on the border between Tanggamus and West Lampung regencies.
As of Wednesday, a search and rescue (SAR) team were still looking for Masadi's body.
Oyos Saroso contributed to this article from Lampung
Wednesday, November 12, 2008
Serang (ANTARA News) - A total of 89 volcanic tremors from Anak Krakatau volcano were recorded in the Sunda Strait on Monday, raising the mountain`s danger status.
"Until now the volcanic activity of the mountain is still continuing," Jumono, in charge of monitoring the mountain`s activities at the monitoring post in Pasauran, Cinangka, Serang, West Java, said here on Tuesday.
He said until now visitors and fishermen were not yet allowed to get near the volcano. He said the danger status was set at level II and it had not been lifted by the Volcanology Center of the Geological Disaster Mitigation Agency in Bandung.
Because of that visitors as well as fishermen were only allowed to be in a radius of two kilometers from the peak of the volcano.
He said the mountain`s deep and shallow volcanic tremors and gust still continued. "It is very dangerous to climb the mountain at this time," he said.
Fishermen had followed the call. "I do not dare to get close to the volcano because it is dangerous," Nurdin, a fisherman from Pasauran said.