TOWARDS A BETTER WORLD COCOA: “MOVING TOGETHER FROM

WEST SULAWESI – INDONESIA”

Presented by:

Anwar Adnan SalehGovernor

At:

West Sulawesi Province - Indonesia

21st World Cocoa Foundation Partnership Meeting

Spynx Club – Washington DC

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June 13 -14, 2012

Profile of Indonesia

Geography GeographyArea : Land: 2 Million & Maritime 7.9 Million km2

No. Island : 17,508Major Island : Sumatera (473,606 km2)j ( , )

Java & Madura (132,107 km2)Kalimantan (539,460 km2)Sulawesi (189,216 km2)Papua (421,981 km2)

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Most known : Bali (5,632 km2)

Profile of Indonesia

PeoplePopulation : 242 Millions (EST 2012)

Youth Population : 110 Million

No. of Ethnic Group : 300

Major Ethnic Group :

- Javanese (40.6%) - Sundanese (15.0 %)

- Madurese (3,3 %) - Minangkabau (2,7%)

- Bugis (2.4%) - Banten (2.0%)

- Banjar (1.7%) - Others (29.9%)

Work Force Allocation : 98 Millions

- Agriculture (43.3%)Agriculture (43.3%)

- Trade & Restaurant (20,4%)

- Manufacturing (11.8%)

- Public Service (11 2%)

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Public Service (11.2%)

Economy of Indonesia

Fact

GDP 2012 : USD 820 BillionGDP 2012 : USD 820 Billion

GDP Growth Rate : 6.7 %

GDP per Capita : USD 3,504

Trade (Non Oil & Gas)

Export : 203 496 (USD Billion)Export : 203.496 (USD Billion)- Major Markets : China, Japan, USA & India

Import : 177.435 (USD Billion)- Major Suppliers : China Jepang USA & ThailandMajor Suppliers : China, Jepang, USA & Thailand

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Total Balance of Trade IndonesiaBilli f USD

Billion of USD Export Import Surplus2008 137.020 129.197 7.823

Billion of USD

2009 116.510 96.829 19.6812010 157.779 135.663 22.1162011 203.496 177.435 26.061

Export Import Surplus

Billion of USD2012Export Import Surplus

January 15.570 14.554 1.016

February 15.695 14.866 829

March 17.267 16.427 840

Total 48.532 45.847 2.685

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GROWTH OF NON-OIL AND GAS EXPORTS BY DESTINATIONS

No Country 2007 2008 2009 2010 2011 Trend (%)2007-2011

1 China 6.664,1 7.787,2 8.920,1 14.080,9 21.595,6 34,23

2 Japan 13.092,8 13.795,3 11.979,0 16.496,5 18.330,1 8,89

3 United States 11.311,3 12.531,1 10.470,1 13.326,5 15.684,2 7,41

4 India 4.885,0 7.060,9 7.351,4 9.851,2 13.279,0 26,28

5 Singapore 8 990 4 10 104 6 7 947 6 9 553 6 11 113 4 3 755 Singapore 8.990,4 10.104,6 7.947,6 9.553,6 11.113,4 3,75

6 Malaysia 4.593,1 5.984,5 5.636,4 7.753,6 9.200,1 17,92

7 Rep. Korea3 746 4 4.660,3 5.174,3 6.869,7 7.565,8 19,653.746,4

8 Thailand 2.646,9 3.214,5 2.598,4 4.054,4 5.242,5 17,34

9 Netherland 2.749,5 3.881,2 2.902,9 3.682,1 5.076,3 12,45

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10 Taiwan 2.337,8 2.901,2 2.875,5 3.252,3 4.205,1 13,75

GROWTH OF NON-OIL AND GAS IMPORTS BY ORIGINS

No Country 2007 2008 2009 2010 2011 Trend (%)2007-2011

1 China 7.957,3 14.947,9 13.491,4 19.688,0 25.456,4 29,71

2 Japan 6.472,7 14.864,7 9.810,5 16.910,7 19.321,0 26,06

3 United States 4.711,8 7.731,5 7.037,6 9.299,4 10.697,0 20,01

4 Singapore 3.908,3 11.095,6 9.236,6 10.053,3 10.548,4 20,77

5 Thailand5 Thailand 4.194,8 6.269,9 4.570,8 7.420,6 10.248,3 21,59

6 Rep. Korea 1.994,5 4.792,4 3.807,8 5.593,0 7.440,9 32,15

7 Malaysia 2.149,9 3.931,2 3.184,2 4.521,8 5.745,4 23,44

8 Australia 2.817,1 3.980,5 3.374,1 4.092,9 5.173,6 13,24

9 India 1.604,4 2.510,3 2.084,9 2.696,0 3.979,2 20,78

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10 Taiwan 1.439,7 2.713,9 2.008,3 2.956,4 3.854,3 22,81

Anwar Adnan Saleh in Brief

Governor of West Sulawesi Province, Indonesia since 2006 (2nd period)( p )Focus on cocoa development to increase prosperity of under “West Sulawesi Cocoa Initiative Program”Initiator of “a national program for higher cocoa production and quality” Also known as “Cocoa Governor”Also known as Cocoa GovernorIn designing and implementing cocoa program, West Sulawesi collaborates with HasanuddinUniversity and other institutions including Swiss Contact & Nestle (recently), Mars, IFC, ACIAR, Amarta 2 (to begin), etc; and hopefully with WCF

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Amarta 2 (to begin), etc; and hopefully with WCF (soon)

9Bappeda Prov. Sulbar

Economic Growth of West Sulawesi 2006-2010

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Sumber: BPS Sulawesi Barat, Tahun  2010

Purpose of Presentation

To share experiences from West Sulawesi To share experiences from West Sulawesi on cocoa development sector.To discuss opportunities for collaborations To discuss opportunities for collaborations to strengthen cocoa development program in indonesia for the benefit of smallholders and all stakeholders in cocoa industries.

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Key Factor of Cocoa In Sulawesi

Sulawesi contributes 65 % to Indonesian cocoabean production and West Sulawesi is among thep gmajor cocoa producing provinces.Cocoa in Sulawesi was first grown in WestS la esi in ea l 1960sSulawesi in early 1960s.At present, the province has 165,000 ha cocoafarms, producing beans around 150,000 tons per, p g , pyear.West Sulawesi is aiming at producing at least250 000 t f b b 2015 d250,000 tons of beans per year by 2015 – andworking closely all stakeholders to achievehigher smallholder income and stronger cocoa

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industry.

Key Factor of Cocoa In Sulawesi

Cocoa sector is responsible for 71 % of theCocoa sector is responsible for 71 % of thepopulation livelihood and prosperityThe government of West Sulawesi started its cocoaprogram by establishing “West Sulawesi CocoaInitiative Program” in 2007, only a year after itbecame a province with the support ofbecame a province, with the support ofHasanuddin University.The initiative was then scaled up to be a nationalprogram movement called “National Program forCocoa Production and Quality Improvement”.

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Government Full Support for The Better Cocoa Movement

The governor

with cocoa field

FacilitatorsFacilitators

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Cocoa In Sulawesi Economic Corridor

With the support of Hasanuddin University, thegovernment of West Sulawesi has pioneered angovernment of West Sulawesi has pioneered anintegrated zero waste cocoa – cow productionsystem.Farm profitability increases due to higher cocoayield, better bean quality, substantial extra incomefrom cow compost biogas and some food cropfrom cow, compost, biogas and some food cropproduction.The soil is healthier and cocoa pests and diseasesare better controlled.

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MP3EI – 6 Economic Corridor

•Sumatra Economic Corridor as a “Center for Production and Processing of Natural Resources and As Nation’s Energy Reserves”•Java Economic Corridor as a “Driver for National Industry and Service Provision”•Kalimantan Economic Corridor as a “Center for Production and Processing of National Mining and Energy Reserves”•Sulawesi Economic Corridor as a “Center for Production and Processing of National Agricultural, Plantation, Fishery, Oil & Gas, and Mining”

i i i f i i

1 Sumatra EC 2 Java EC 3 Kalimantan EC 4 Sulawesi EC 5 Bali – Nusa Tenggara EC 6 Papua – Kepulauan Maluku EC

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•Bali – Nusa Tenggara Economic Corridor as a “Gateway for Tourism and National Food Support”•Papua – Kepulauan Maluku Economic Corridor as a “Center for Development of Food, Fisheries, Energy, and National Mining”

Program: Integrated Zero Waste Cocoa Production

The Indonesian government launched a new comprehensive economic development program through a Master Plan of Acceleration and Expansion of Indonesian Economic Development 2011 2025 Expansion of Indonesian Economic Development 2011 – 2025 (MP3EI)Under this MP, six economic corridors are identified as growth centers expected to boost the economic development throughout the country. p p g yOne of the corridors is “Sulawesi Corridor”. Sulawesi Corridor focuses on cocoa, food crops, fisheries and nickel/oil & gas. Six major issues to address:

Sustainable crop and farm productivityQuality and added valueP ocessingProcessingFair and competitive marketingFarmer empowerment and capacity building; and Database support enhancement for a better, more comprehensive

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Database support enhancement for a better, more comprehensive cocoa sector management.

Integrated Zero Waste Cocoa Production Systemy

o Soil is healthyo Much better controlled

(reduced) pests &diseasesHigh bean q alito High bean quality

o Cocoa yield increaseso Substantial extra incomeo Substantial extra income

from cows, compost,biogas & biopesticides

o More sustainable(economical,environmental & social)

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environmental & social)

Cocoa Agrifinance

The West Sulawesi government, with supports from multi stakeholders (IFC, supports from multi stakeholders (IFC, bank, off takers, fertilizer manufacturer, farmer groups) has also introduced a scheme for cocoa agri-finance program to:

Increase cocoa productivity & quality (yield increases by 2 to 3 times bean count < 100)increases by 2 to 3 times, bean count < 100)Increase profitabilityEncourage balanced fertilizer used by farmers Encourage balanced fertilizer used by farmers for healthy soilsStimulate more competitive business.

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Need Based Training

Under the umbrella of Cocoa Sustainability Partnership (CSP) forum we collaborate with Swisscontact & other institutions forum, we collaborate with Swisscontact & other institutions (members of CSP) to conduct a training program based on our dynamic needs.Through promoting collaborations we encourage the public Through promoting collaborations, we encourage the public (farmer’s community) to improve their knowledge sensible farming

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Accelaration of Indonesia Economic Trasformation

A Master Plan: “Acceleration and Expansion of Indonesia Economic Development” (MP3EI)p ( )MP3EI – An Integral Part of National Development PlanningSulawesi Economic Corridor:

Cocoa is one of the main economic activities (along with agricultural crops, fishery, nickel and oil & gas) Cocoa is a sector that involves the largest number of smallholders in SulawesiCocoa has huge potential to grow furtherCocoa as uge pote t a to g o u t e

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Closing Remarks

We are looking forward to have WCF on board in ourcocoa programMuch has been achieved, yet more support and innovationsare needed to scale up and accelerate the success for a moreprosperous cocoa smallholders, better farming quality andsustainable cocoa industry.We believe that World Cocoa Foundation and its worldwidemembers can provide valuable support for the development ofcocoa center of excellence in Indonessia and specifically inWest Sulawesi towards better world cocoa industry.The government of West Sulawesi will do its best to facilitategood atmosphere for our needed strategic collaborations.We look forward to having close collaborations with WCF

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