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RI tries to fix supply chains to join global seaweed rush

As Indonesia’s seaweed production continues to fall even as global demand rises for the commodity, the government is banking on a new pilot project that aims to address ingrained supply chain issues.

Deni Ghifari (The Jakarta Post)
Jakarta
Sat, March 25, 2023

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RI tries to fix supply chains to join global seaweed rush

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mid rising global demand and production, Indonesia’s seaweed production has been declining steadily because of supply chain issues. The government is trying to tackle the problem with a pilot project that it hopes will touch every aspect of the industry and provide a blueprint for businesses across the country.

Indonesia’s coastline totals 99,000 kilometers, second only to Canada’s, according to the WorldAtlas website, making the archipelago an ideal place for seaweed cultivation.

And true enough, the country also ranks second in terms of output, only behind China. According to a report published in Hakai Magazine, seaweed farms account for 40 percent of the nation’s fishery output and employ around 1 million people.

However, the latest available data from the Maritime Affairs and Fisheries Ministry show that seaweed production has been declining by hundreds of thousands of tonnes per year, dropping from more than 10.5 million tonnes in 2017 to barely above 9 million in 2021, even as many other countries have seen multifold growth in their production.

Data from the United Nations’ Food and Agriculture Organization (FAO) show that global seaweed production has grown more than sixfold over the past 30 years.

“The problems are both upstream and downstream in the supply chain,” the ministry’s aquaculture director general, T.B. Haeru Rahayu, told The Jakarta Post on Thursday.

The main downstream issue was the high cost of logistics and transportation, resulting in tiny profit margins, explained Haeru, while outdated farming practices had been identified as the key problem upstream.

Specifically, he was referring to farmers still resorting to cutting parts of their plants to gather the next batch of spores.

This method can compromise product quality, given that farmers sometimes harvest too early, after 35 days instead of 45, due to financial constraints. The cutting-edge method for seaweed cultivation is known as tissue culture, in which the algae’s tissue is reproduced in a controlled environment for better quality spores.

Read also: 3 ways to help Indonesia grow more seafood from aquaculture, with less local impact

Because of costly logistics and transportation, as well as a lack of skills and technology, farmers are mostly left with no choice but to sell their produce as raw material, missing out on the added value that further processing could generate.

“So far, around 70 to 80 percent of harvested seaweed is sold in raw, unprocessed form. All they do is dry it out then sell it, which [doesn’t] give them a good margin,” Haeru said.

The reasons behind this were a lack of off-takers and farmers’ reluctance to use processing facilities, he explained. “Even if there are processing facilities, they’re typically far [away], so the farmers incur transportation costs” that pushed down their margins even further, he added.

To tackle that very problem, the ministry launched a pilot project earlier this month in Southeast Sulawesi’s Wakatobi regency, which Haeru says is a “comprehensive program” that is hoped to become a blueprint for the future of national seaweed production.

Through this project, the government is looking to solve the cultivation problem by procuring a steady flow of high-quality seedlings using the tissue culture method.

Haeru claimed that six technical units under his supervision in Southeast Sulawesi, Ambon, West Nusa Tenggara, Lampung and East Java were ready to supply seedlings, armed with advanced tissue culture know-how accumulated through studying in Kyoto, Japan.

Simultaneously, the government is working on a downstream solution by inviting off-takers to build facilities near production areas to shorten the supply chain and make it more efficient. In addition, it is lobbying state-owned banks to incentivize off-takers interested in building downstream facilities by offering favorable loans. These will be in addition to the loans the ministry is offering through the state budget.

The dry seaweed yield from the Wakatobi project currently amounts to 3,028 tonnes per year, and the ministry is aiming to more than double that to 6,703 tonnes within two years.

“We understand that the industry holds to the principle of ‘seeing is believing’. Everyone is looking for an established and [stable] system before they follow suit. That’s what we’re trying to do,” said Haeru, expressing his hope that seaweed businesses across the archipelago would replicate the Wakatobi project.

Irzal Effendi, a mariculture lecturer at IPB University, told the Post on Friday that the government had put enough effort into the pilot project, but the issue now was to apply these practices in the field to develop the national seaweed industry.

“If [the pilot project is] only ceremonial, it is likely to end up in failure, [especially if] it is not handled with strong, comprehensive and systemic implementation,” he said.

Irzal explained that cultivating seaweed relied heavily on environmental factors, meaning that any external changes, such as in the global climate or environmental quality, could easily cause seaweed farmers to abandon a particular region.

“Regulation is needed to ensure that a [seaweed] cultivation area can coexist, undisturbed, with other allotments,” Irzal said. “That regulation could take the form of spatial plans for [coastal areas] and small islands. [Spatial] conflicts could be minimized with such a regulation.”

Read also: Executive Column: Sea6 Energy to substitute fossil fuel with greener seaweed biofuel

Nurjanah, who chairs the Indonesian Fishery Products Processing Association (MPHPI), said the pilot project was the right step to take as long as it had been developed holistically. But she told the Post on Thursday that her experiences in the field differed from what she had seen in the government-led project.

The MPHPI chairwoman, who is also a fisheries and marine science professor at IPB University, said the government needed to pay attention to every detail if it was looking to bring real change to the industry.

“It happened with an ice factory in Lombok. The factory was provided, it ate up a big budget, but there was no electricity to run it,” Nurjanah recalled.

“If the thought process is only partial, these [efforts] will only go to waste,” she added. “Building factories on a whim when there is no road, no electricity, is pointless. That’s what has been happening all this time.”

Nurjanah said that up until July 2022, more than 900 species of seaweed had been identified in Indonesian waters, pointing to the country’s great biodiversity potential.

However, the many seaweed production centers spread across 17 provinces in the country mainly farmed just three species: Eucheuma cottonii, Eucheuma spinosum and Gracilaria verrucose.

“What don’t we have?” Nurjanah asked rhetorically. “No one can deny our potential”.

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