Tourism challenge on small-scale agribusiness in Bali

 

I Made Supartha Utama

Study Program of Agriculture and Biosystem Engineering

Faculty of Agricultural Technology

Udayana University, Bali – INDONESIA

supartha_utama@unud.ac.id

 

SUMMARY

Bali is a small island and small province in Indonesia known as tourist destinations in the world with visitors tend to increase every year. The number of visitors tripled in 2016 compared to the residents of Bali, of which about 4.2 million.  This indicates a significant movement of dynamic consumers related to foods that have to be fulfilled by mostly small-scale agribusiness in Bali.  The highland of Bedugul is known as the center area of vegetable production.  The production is occupied by small scale family farmers and link with small-scale agribusiness distribution chain systems.  The case study indicated that the systems are still inefficient and ineffective in creating the values emerging in dynamic modern consumers/markets. The farmers tend to exploit their lands by using hybrid seeds and intensively used agrochemicals of which are contra-productive with the concerns of dynamic modern consumers related to food safety, declining biodiversity, and environmental destruction.  With the inefficient and ineffective production, skyrocketing of land price and changes in lifestyle, have threatened the agriculture sustainability in the Bedugul area. 

INTRODUCTION

The small island of Bali is part of 17,000 islands in Indonesia.   About 90% of 4.2 million the people of Bali are Hindus and have created unique traditions and cultures, and positioning Bali is one of the top-ranking tourist destinations in the world.  The philosophy of life of Balinese to live in harmony is framed by three pillars of good relationships, namely the relationship between human (sociological aspect), between human and the environment (ecological aspect), and human with God (spiritual dimension), known as TRI HITA KARANA.  This philosophy has been believed to create the unique traditions and cultures.  The Agriculture activities are also inspired by the TRI HITA KARANA and; therefore, they are attractive to be visited by tourists. During the last decade, the tourist visited Bali increased significantly.  By 2016, the visits are approximately 4.9 million foreigners and 7.9 million domestic tourists compared to the inhabitants of Bali of which just about 4.2 million (Bali Central Bureau of Statistics 2017).

The high mobility of people in the tourism sector has brought consequences of changes in the agricultural sector in Bali.  The increase of accommodation and services which have to be provided for tourists has threatened the existence of farming lands.  The significant increase in land price and change in lifestyle of Balinese people in the global tourism interaction has triggered the shifting of land from the use in agricultural to non-agricultural purposes.  The Agriculture Census in 2013 indicated that about 3,617 ha of farmland were shifted to non-agricultural uses every year during 2003-2013.

The tourists coming to Bali, which bring their food traditions, have changed activities in agriculture of which mostly occupied by small scale farmers.  The change was from self-sufficient oriented production to commercial production in responding demands of the dynamic evolution of consumers/markets, including institutional consumers (hotels, restaurants, and catering services).  Could the existing agriculture system meet the rapid development of tourism in Bali? This is interesting to be studied.  Bedugul, the region known as the center of production of many species and varieties of vegetables, was investigated.  The small-scale family farmers in this region are highly responded to adapt the needs the institutional consumers and modern markets.  The area is a valley or crater located in the central highland of Bali.  The climate, soil and the availability of water have created a condition that is suitable for growing different species/varieties of high-value vegetables.

CASE STUDY

Bedugul is a 3,942 ha valley consisting of two villages, namely Pancasari and Candikuning, located in the mountains (1200-1500 m asl) between  Tabanan and Buleleng districts. Pancasari village is governed by the district of Buleleng and Candikuning by the district of Tabanan. The night air temperature in the area can reach 18^oC and at noon 24^oC. The average rainfall is about 19.20 cm and the humidity ranges from 60 percent to 90 percent. In September to February, the rainfall is relatively high (rainy season), while March to August, the rainfall is relatively low (dry season). There are two lakes in the valley, namely Beratan and Buyan.  There is another lake near the lake of Buyan called Lake Tamblingan, but its location is not in the valley of Bedugul.  With good climatic conditions and supported by dominantly regosol soil, the area can be grown with various high-value vegetables and herbs species/varieties.

The number of residents in the two villages is about 3,400 households who are about 80 percent work in the agricultural sector. The average farming area of ​​a family farm is 0.35 ha with cultivated horticultural crops of which previously are predominantly local open-pollinated crops, such as cabbages, celery, potato, carrot, tomato, cucumber, and chili. However, with the development of tourism, the variety of vegetables increased and now dominated by hybrid crops.  Moreover, most local seeds are now replaced by the hybrid ones. By the needs of tourists, different species of herbs have also been developed

More than 100 species/varieties of vegetable crops and commercial herbs are cultivated in the Bedugul area as a response to consumer demands in the tourism sector. Those numbers of vegetables and herbs do not grow in other locations in Indonesia where less developed in tourism.  The small scale family farmers in Bedugul are flexible in choosing crops that can grow in the rainy or dry season.  They mostly cultivate different species or varieties of crops in their lands with intensive family involvement.  In the dry season, in some lands that are far away from a water resource farmers are even willing to buy water for their crop irrigation at an additional cost of Rp 750,000 to Rp 1,500,000 per month.

            The response of family farmers to changing demands of institutional consumers and modern markets have involved the intensive use of agrochemicals both in open farm and in the simple greenhouse of which made from woods and bamboos. The simple greenhouses are used to grow bell pepper, Strawberry and cut flower of Chrysanthemum. Siaka et al. (2004) reported that the edible parts of leafy vegetables i.e. cabbages, mustard greens, lettuce, broccoli, and spring onion on open land, contained heavy metals Pb, Cu, Cr, and Zn higher than those permitted by FAO / WHO. They concluded that the soil in the Bedugul heavy metals has polluted the area. Another indication of the high use of agrochemicals was found in the contamination of agrochemicals in the lake of Buyan (Manuaba, 2008 and 2009).  The contamination of organic phosphate pesticides (dimethoate, klorfirifos and profenofos) were identified for a total of 14.9 ppb, and carbamate (carbofuran and methomyl) for a total of 15 ppb.  This suggest that the farmers are tried to protect their crops hardly and secure the production for the family incomes, even though the practices are endangering the environment, biodiversity, and consumers, or contradictive with sustainable agricultural practices.

The study conducted by Utama and Kitinoja (2015) found that there are five vegetable distribution channels from the Bedugul area to different markets or consumers, as shown in Figure 1. Based on eight criteria developed by Collins (2009) in assessing the value orientation of the distribution channels, it was found that 1-3 distribution chains were very weakly value-oriented. A total of 75 percent of production was through chains 1-3. The long 2^nd and 3^rd distribution chains in which about 60 percent of products are delivered cause high losses, more significant than the losses in the 1^st short distribution chain. The losses in the city's traditional markets were found higher than in the village-traditional retail markets.  The differences were due to longer transportation time and more top quality preferences of the consumers in the city traditional markets.  Figure 1 can be seen that losses/wastages at the farm level, especially on the field is relatively high (5-10 percent).  This massive loss was because of product defects, attacks by pests and diseases, and the sizes or forms did not meet the standards of commercial markets. In the 1^st, 2^nd and 3^rd distribution chains, there was weight deduction performed by the buyer or collectors in the range of 5-10 percent depending on the perishability of vegetables.  The deduction is for the compensation of damages during handling and transportation.

The 4^th and 5^th distribution chains are found more value-oriented, but they still need to be strengthened in line with the increase of market sophistication, especially to create intrinsic and extrinsic quality. Only 25 percent of the vegetables and herbs from Bedugul were delivered through 4^th and 5^th chains. The calculation of losses of 10 percent in the modern market was due to the risk of damages, trimming before products are tied or packing into retail units, and unsold products (wastages). The losses are the responsibility of suppliers.  Instead of the 10 percent automatic deduction, one multinational supermarket in Bali charges the suppliers 8.3 percent of total fresh produce for offering a regular discount (3.5 percent) and tax rebates (1 percent) on the products, promotion budget (1.5 percent), anniversary support (1 percent), Eid support (1 percent), and packaging cost (0.3 percent).