Economic Development of Mangosteen Agro-Industry Based on Sustainability

Jejak Vol 12 (1) (2019): 33-53 DOI: https://doi.org/10.15294/jejak.v12i1.17677

JEJAK Journal of Economics and Policy http://journal.unnes.ac.id/nju/index.php/jejak Economic Development of Mangosteen Agro-Industry Based on Sustainability

Parwa Oryzanti1, Ernan Rustiadi2, Eriyatno3, Nurul Taufiqu Rochman4

1Study Program of Natural Resource and Environment Management Post-Graduate School of Institute of Agriculture Bogor 2Faculty of Agriculture, Institute of Agriculture Bogor 3Study Center of Agriculture and Rural Development (PSP3), Institute of Agriculture Bogor 4Physics Research Center, the Indonesian Institute of Science

Permalink/DOI: https://doi.org/10.15294/jejak.v12i1.17677

Received: October 2018; Accepted: January 2019; Published: March 2019

Abstract The concept of developing agro-industry based agropolitan area for Mangosteen Peel Extract is a solution to create the high added value and to increase people’s income in the area. Agro-industry development in agropolitan areas by optimizing the local strategic commodities is a breakthrough to support the regional economy growth to be sustainable, so it is common in accordance with the potential regional leading commodities. The aim of this research is to analyze the sustainability of the area and to assess the feasibility of mangosteen agro-industry investment. The results of analysis show that the level of sustainability of technological and infrastructure, economic, social, and environmental and technological aspects are categorized as less sustainable with the sustainability index ranging from 34.12% to 49.96%. While the policy aspects in the development of Karacak agropolitan area are categorized as unsustainable with the sustainability index of 22.31%. The results of the feasibility analysis show that the capsulated agro-industrial product of mangosteen peel extract have greater opportunity to attract the investors because it is feasible with NPV value of Rp 17,690,067,855 and the added value of Rp 90,833/ kg of raw materials..

Key words : Agropolitan Approach, Agro-Industry, Mangosteen, Regional Economy.

How to Cite: Oryzanti, P., Rustiadi, E., Eriyatno, E., & Rochman, N. (2019). Economic Development of Mangosteen Agro-Industry Based on Sustainability. JEJAK: Jurnal Ekonomi dan Kebijakan, 12(1), 33-53. doi:https://doi.org/10.15294/jejak.v12i1.17677

 Corresponding author : p-ISSN 1979-715X Address: Jl. Raya Dramaga, Babakan, Bogor1 West Java 6680 e-ISSN 2460-5123 E-mail: [email protected]

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INTRODUCTION agricultural and industrial sectors. (Mubyarto,1993). Poverty and economic, social, and The chain of life in rural level should be cultural gap between the city and rural society strived for by establishing the sustainable become one strategic issue in the national agrobusiness activities and building the proper development plan. The emergence of residential centers in order to support people’s agropolitan concept through the Acts No. 26 welfare. It is strengthened by Rustiadi and in 2007 on Layout, supported by the Dardak (2008) that agropolitan development Regulation of Minister of Agriculture No. 50 in is aimed at increasing the agricultural 2012 on the Guide of Area Development, products and sales of agricultural products, becomes a strategy to build the agricultural supporting the growth of small-medium scaled area in rural areas by increasing the value agro-processing industry, and encouraging the added of the area, decreasing the imbalance of varied economic activities of the market welfare, harmonizing rural-city development, center, so that those will create the value strengthening rural agro-business activities, added for the sustainability of the agropolitan and increasing the people’s participation in areas to be something significant. the area. Rural areas have potential abundant The value added creation for the natural resources and natural charm become agricultural commodities is conducted by the attractiveness for people to be willing to processing it into a product having higher stay inside. value and competitiveness, which is known as The problem is that the potential has not agro-industry. The definition of agro-industry been maximally developed. Dominant and is presented by Austin (1981) that is a company major livelihood on farm and the undeveloped processing the vegetable materials (originated off farm become the challenge to be solved. from plants) or animal ingredients (produced The agricultural products that can only be sold by animals). The process used covers in raw materials cause many leakage of the alteration and preservation through physical value added to the city. This makes the rural or chemical treatment, storage, packaging, and areas not developed. Whitby (1984) and distribution. Friedman (1966) present that in the rural Such frame can be completed by some development process the main thing to be factors those are planning, production process, concerned is that agricultural sector is the and marketing. The production process should economic base in the rural area. The relation be brought closer to the technique and with agropolitan is that the starting point if application of green productivity (GP) to the this is the (agricultural) basic sector agro-industry. In Marimin et.al. (2015), it is development in the frame of the area mentioned that to establish a business that development. The follow-up, the processing can answer the social demand on the quality industries and the supporting services are of life through supplying the goods and service developed in accordance with the rural produced by sustainable ways. The focus of GP environment. It is in line with the balanced on the small middle companies, in which development principle between the

41 Parwa Oryzanti, et al., Economic Development of Mangosteen

UKM become the backbone of business in the agro-industry built must be in the Asia. UKM is a key to the overall economy agropolitan area, the next question is what development in the whole Asia. GP focuses on kind of role model to make the agro-industry creating the relationship among environment, possible to be conducted by the people around quality, and profitability. It is explained by the area, and also to be dominated and even to Sadjad (2005), all this time the development in be owned by them. The existence of agro- agricultural sector using the extension device industry can give utility and value added for has not targetted yet in the change in attitude, the increase in income of the area and also can but still in the level of using the modern decrease the massive economic leakage. One agricultural device. There is no change in of the requirements is that the agro-industry attitude and mindset from subsistent to agro- should be beneficial and appropriate based on industry. Agro-industry here is a village as the the investment criteria and could be base of raw materials to be established into implemented by the people in the agropolitan agro-industry base in which there is a value area. The idea of agro-industry agropolitan added process to the agricultural product such development is a big concept to grow an as sorting, standardization of product, economy in rural level and to create packaging, service, and transportation. employment in the village. Rustiadi, et.al. (2011) suggest that the The agro-industry developed is based on significance of agropolitan area development the local resources, or optimizing the leading is closely related to the idea of Marimin, et.al commodities owned by the agropolitan area. (2015) about the issues mentioned above. Both In this research, Karacak agropolitan has opinions, if related to the concept of industrial mangosteen commodity. All this time village by Sadjad (2005), will bring a new mangoesteens are sold in fresh condition concept that can bridge the aim of rural area either at the local market or the export and agro-industry development in a big circle market. The value added owned by the people of natural and environment resource in the agropolitan area is still dominant in the management sustainability. cultivation business and not sourced from the The agropolitan area planned by the post-harvest processing activitiies or the agro- government becomes a positive effort in industry, so that there is still leakage in the bringing the progress in the village. However, value added that can be overcome through the the aspects supporting the agropolitan area mangosteen based agro-industry activity. have not been simultaneously collaborated yet For the sustainability and preservation those are settlement and agrobusiness aspect of life environment in the agropolitan area, the as the main aspect forming the definition of approach of technique and application of agropolitan, as presented by Rustiadi (2004). green productivity concept and zero waste is One of agrobusiness functions is agricultural applied to plan the frame of production product processing or known as agro-industry. process for the agro-industry. The concept of Afterwards, what kind of agro-industry model green productivity is introduced for the first that can be developed and can involve the time by Asian Productivity Organization people in agropolitan area? Considering that (APO) in 1994 as the respond to the needs on

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relationshipbetween the strategy of economy RESEARCH METHOD development and the environment This research is conducted in Bogor preservation.The problems in model Regency since July 2017 until August 2018. The development of the sustainable agro-industry case study is at Karacak Agropolitan Area, agropolitan area involve various complex Karacak Village, Leuwiliang District. The case elements, among others are the natural study of mangosteen agro-industry is resources (SDA), the environmental resources conducted in UMKM and industry scale. The (SDL), the social resources (SDS), the human UMKM scale is mangosteen dodol and resources (SDM), the technological resources mangosteen peel extract floor soap located in (SDT) and the economic resources (SDE). All Karacak agropolitan area. While the agro- these elements are the composer of agro- industry scale at PT Zena Nirmala Sentosa industry agropolitan system. In order to be producing the same products with Garcia able to analyze the needs and interest of brand is located at Jl. Raya Cicadas No. 51, RT various elements to reach the same goal, this 01/02 Cicadas Village, Gunung Putri District, research is conducted through System Bogor Regency. Approach. According to Eriyatno (2012), in the Table 1. Category of Sustainable Index mechanism of joining the system, the activity Index Value Sustainable Category moves from an individual to be a group’s effort 0 – 25 Bad; Unsustainable to bear various terminologies in management 26 – 50 Less; Less Sustainable sector such as: interaction, inter-disciplinary, 51 – 75 Enough; Enough Sustainable interface, interrelated, interconnectivity, and 76 – 100 Good; Very Sustainable the most famous coordination. Systematic Source: Pitcher (1999) thinking covers the process of thinking of a The sustainable level analysis uses Multi- purpose, a goal, and a target in one’s mind dimensional Scaling Analysis (MDS) (Young, covering interaction of element, component, 2009; Borg and Groenen, 1997). The and sub-system to form a system. sustainable status of Karacak agropolitan area In this research, the feasibility analysis is stated in the form of sustainable index based on agro-industry investment is conducted by on the Rap-Agro approach by applying the the financial feasibility method to make an MDS technique. The Rap-Agro approach is economic study of mangosteen peel that is the modified from the Rapfish (Rapid Assessment consumption waste or the mangosteen food Techniques for Fisheries) Method developed processing valuable in health or business by the Fisheries Center, University of British prospect in the agropolitan area. The aim of Columbia (Fauzi and Anna, 2005). MDS this research is : (1) analyzing the condition of method is a statistic analysis technique that sustainable status of Karacak agropolitan area transforms each dimension and multi- and (2) analyzing the feasibility and the value dimension into the sustainable dimension of added of mangosteen peel based agro- agro-industry agropolitan system. This industry. research is aimed having a description of the

41 Parwa Oryzanti, et al., Economic Development of Mangosteen

sustainable level of agropolitan area reaching the next purpose so that the criteria development in Karacak, Bogor Regency. The of product to hold an agropolitan area can be step of MDS analysis is presented in Table 2. widened into the social, environmental, technological and infrastructure, institutional Table 2. Steps of MDS Analysis or any other factors that can be found in the Steps Description Explanation time of field observation. Determina Economy Each tion of Environment dimension is The net value of B/C ratio bigger than Attribute Social outlined based one is a requirement to make a project Policy on the feasible in finance so it can be continued, on Technology attribute the contrary, if the value is smaller than one. It and Infrastructure is a sign that the project is not feasible to be Assesment In the ordinate The score is conducted (Gray, et.al, 1992). According to of scale based on based on Sofyan (2002), PBP technique is used to Attribute the sustainable Scientific criteria of each Judgement. determine how long the capital planted in a dimension The score is business will be back. ranging If the alternative of cash flow is found between 0 – 2, which starts from the business proposed again, the from bad (0) alternative suggestion of business that gives to good (2) the shortest period is the best. The Break Even Composition The score value 0 – 24.99 of index and of each bad Point (BEP) analysis is used determine the sustainable attribute is 25 – 49.99 volume of production or sales as minimum as status analyzed in less possible to make the expense is the same with multidimension 50 – 74.99 al way to enough the benefit found (Gray et. al, 1993) determine one 75 – 100.0 Afterwards, to see the elasticity of a or some points good project of agro-industry, a sensitivity analysis reflecting the sustainable is conducted. This analysis is conducted by position changing the value of a parameter on a time to further see how the effect on the acceptability Afterwards, the assesment method of of investment. The parameters that usually investment feasibility is used to determine the change and change can affect the decision are agro-industry investment feasibility status investment expense, cash flow, rest value, using the financial feasibility criteria including interest rate, tax rate, economic condition, et Net Present Value (NPV), Intenal Rate of cetera (Umar, 2007). The criteria of financial Return (IRR), B/C Ratio, Break Even Point feasibility of agro-industry is summarized in (BEP), Pay Back Periode (PBP) referring to Table 3. In this research a sensitivity analysis is Gray et.al (1992) and Gittinger (1982) in conducted to the change of interest rate, raw Rustiadi, et.al.(2011). There are some choices of material expense, and decrease in product mangosteen-based agro-industry which price. By taking two scenario those are (1) the feasibility has been tested. The result of product price is stable, but the raw material analysis then becomes one of inputs in price and the interest rate are increased, and

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(2) the product price is decreased, the raw Province and at the East is Cibungbulang material price is increased, and the interest District and Pamijahan District. rate is increased. The investment feasibility Bogor Regency has varied type of area study can be used to calcultae the economic morphology, from the relatively lowlands at value added of the area. The economic value the North to the highlands at the South.about added of the area is analyzed using Hayami 29.28% at the height of 15-100 meter above the method. sea level (dpl), 42.62% at the height of 100-500 meter dpl, 19.53% at the height of 500 – 1,000 Table 3. Criteria of Financial Feasibility of meter dpl, 8.43% at the height of 1,000–2,000 Agro-Industry meter dpl and 0.22% at the height of 2,000– Parameter of Feasible Criteria 2,500 meter dpl. Besides, the morphology Feasibility condition of Bogor Regency mostly is the PBP (Year) Lower than the highlands, the hills, and the mountains with required time the building blocks dominated by the results NPV (Rp) More than 0 (nol) of volcanic eruption covering andesit, tufa and B/C Ratio More than 1 (satu) basalt. The combined stone is included in the Bigger from the nature of relatively pass water stone, in which IRR (%) walking interest its feature of steeping the rain water is great. rate The type of this weathering stone is relatively vulnerable to the movement of the ground if RESULTS AND DISCUSSION receiving the steady high rainfall. Afterwards, the type of land covering is dominated by the Karacak agropolitan area is located in rather sensitive and very sensitive off volcanic Bogor Regency, precisely at Leuwiliang materials to the erosion, among others are District. Geographically Bogor Regency has an Latosol, Aluvial, Regosol, Podsolik and area on 298,838.304 hectare, located between Andosol. Therefore, some areas are vulnerable 6º18'0" – 6º47'10" South Latitude and 106º23'45" to the landslide. – 107º13'30" East Longitude. This area at the The area width of Bogor Regency based South is bordering with South Tangerang City, on the land use pattern is grouped into: mixed Tangerang Regency, Depok City, and Bekasi garden of 85,202.5 ha (28.48%), built Regency/City. At the West it is bordering with area/settlement of 47,831.2 ha (15.99%), shrubs Lebak Regency; at the East it is bordering with of 44,956.1 ha (15.03%), dense vegetation forest Karawang Regency, Cianjur Regency and /plantation of 57,827.3 ha (19.33%), irigation Purwakarta Regency. At the South it is farm/raid fed of 23,794 ha (7.95%), empty land bordering with Sukabumi Regency and Cianjur of 36,351.9 ha (12.15%). Regency; while at the Middle it is bordering Administratively, Bogor Regency has with Bogor City. Leuwiliang District has an 40 districts including 417 villages and 17 sub- area of 9,143.39 hectare, or about 3% of Bogor districts (434 villages/sub-districts), covered in Regency, with the administrative border at the 3,882 Citizen Association and 15,561 North is Leuwisadeng District, at the West is Neighborhood Association. In 2012 four new Nanggung District, at the South is Banten

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villages have been built those are Pasir Horticulture Food Crops and Plantation of Angin Village, Megamendung District, Urug Bogor Regency, UPTD of Leuwiliang District, Village and Jayaraharja Village Sukajaya PPL (The Agricultural Extention Worker) from District and Mekarjaya Village Rumpin the Agricultural Extension Center (BPP) District. Leuwiliang District administratively Leuwiliang, farmers group, association of has eleven villages those are Purasari, farmers group (gapoktan) and KTNA (Farmers Puraseda, Pabangbon, Karyasari, Karacak, Contact). The institution has its own role Barengkok, Cibeber I, Cibeber II, Leuwimekar, assisting the farmers to solve the agricultural Leuwiliang, and Karehkel. problems occuring in Karacak agropolitan area The amount of residents of Bogor specifically related to the leading commodity Regency based on the data of Central Bureau that is mangosteens. of Statistics (BPS) in 2016 is 5,587,390 people, Leuwiliang District is included in the covering 2,856,529 male people and 2,730,861 strategic commodity development zone female people. In 2015 there are 5,459,668 through the agropolitan area development. people, which means that in 2016 there is an Karacak village is one village located in increase of 2.34 % compared with 2015. From Leuwiliang District and is the part of the data of potential population, Leuwiliang Agropolitan Area in Bogor Regency as the District has a projection of total population of development stub of Agropolitan program in 121,597 people covering 62,752 male people and 2005. The marketing of Mangosteen 58,845 female people. The amount of male Commodity has reached the overseas like population is more than the female one. It is Hongkong and Taiwan, also to the middle East potential for the area in the development of countries. Mangosteen Development has used mangosteen farming business and maintaining the Procedure Operational Standard (SOP) of the sustainability of mangosteen cultivation Good Agricultural Practices in its cultivation. cycle in Karacak agropolitan area. Besides, the The central location of leading commodity of potential may support the increasing dynamic mangosteen is located in Leuwiliang District, of the adult male farmers in the area. Leuwisadeng District, and Cigudeg District, Most people work as farmers but there the development area is located in Jasinga are still 1,364 farmers who have no lands or District and Klapanunggal District. about 47.8% farmers who do not cultivate Mangosteen is included in one of the primary their won lands. This condition is aggravated leading commodities in Bogor Regency in by the land ownership of less than 1 ha 2016, which production reached 79,927 ton amounted 51.3% of the total 2,885 farmers’ (Bureau of Horticulture Food Crops and household, or it can be concluded that half of Plantation of Bogor Regency, 2016). the amount of farmers in Karacak Village are As leading commodity, mangosteen the smallholders. As the agropolitan area, production has great potential to be able to Karacak Village is an agricultural village that increase the farmers’ income. One effort of the must be supported by the adequate Bureau of Agriculture of Bogor Regency to agricultural institution. The external hold the integrated guidance and counselling, institutions assisting are PKHT-IPB, Bureau of in 27thFebruary 2001 mangosteen farmers

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group of ”Karya Mekar” has been established the information of cooperation between the in Cengal Kampoong, Karacak Village, government and the society to prepare the Leuwiliang District, with the number of agropolitan area. The program is follow-up members amounted 33 people.The of the Decision Letter of the Minister of development of mangosteen commodity has Agriculture No. 312/TU.210/ A/X/ 2002 on the been continuing up to the rise of the initial estabishment on agropolitan area in 2002 and concept development of Agropolitan Area that its position as the second hierarchy in the is realized through the Masterplan of environment of Bogor Regency. In the Agropolitan Area of Bogor Regency in 2005 establishment of agropolitan area, one village (Figure 1) covering nine districts including in Leuwiliang District that is Karacak Village is Leuwiliang District. The development determined as the agropolitan area center with projection of this area in the future can be the mangosteen leading commodity. Karacak carried out by developing either the on farm agropolitan area in Bogor Regency is or off farm commodity and the sustainable supported by the plantation commodity that is area development. The development of this mangosteen as the area leading commodity. commodity is conducted by increasing the The plantation sub-sector is one of the quality, quantity, and continuity of the strategic sub-sectirs concerning all activities of production and raw materials provision of management of natural resource, human mangosteen. The continuity of mangosteen resource, production facililites, tools and raw materials is required to support the machine, cultivation, harvest, processing, and development of downstream of mangosteen marketing related to the plantation plants (the product. Acts No.39 in 2014). It is mentioned further The increase in production can be that the plantation activities will give benefit, conducted by the area expansion from the economic, ecological, and social (extensification) or the increase in sectors, in line with the sustainable productivity of each tree (intensification). The development. Sustainable development is a land area expansion has been conducted by development concept that has become the distributing CV variety mangosteen seeds.. mainstream of the world development in Raya (Cultivar Raya) known as Manggis Raya, general including Indonesia. It can actually be is the leading local mangosteen developed by seen from the implementation of development the Institute of Agriculture of Bogor (IPB). by putting forward the sustainable aspects in Based on the program planning of all sectors including plantation and industrial agropolitan area development in Bogor sectors. According to Todaro and Smith Regency in the project period of 2005-2010, the (2003), the sustainable development gives agropolitan program in Karacak District has implication on the dynamic balance between finished without any sustainability. The the functions maintenance and transformation agropolitan program is held through the in the frame of fulfilling the requirement of establishment of agropolitan POKJA life. The sustainable development is widely strengthened by the Decision Letter of the based on three pillars of development those Regent No.590/191/Kpts/Huk/2004 containing are economy, social, and ecology

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(Munasinghe, 1993). Further Ekins and Simon agropolitan program including the (2001) mention that the sustainable development of Karacak agropolitan area in development usually has three main aspects of Bogor Regency is that the program is expected development as follows: 1) environmental to give the wide benefit (multiplier effect) development, either in the use of resources, especially from the social economy aspect of the protection of ecological process, the the society and the own-source revenue system of life support, and the biodiversity; 2) (PAD). Thus, the effort of optimizing the economic development to improve the quality development of Karacak agropolitan area of of human life that is a development Bogor Regency needs to be continuously emphasizing on human as the central of conducted to be able to increase the standard attention; (3) fair social development in the of life of the farmers community and to distribution of development benefit covering increase the own-source revenue from the all the society and among generations. On the plantation sub-sector. Therefore, it needs to program developed to support the increase in conduct many analysis and evaluations to the national plantation production is the Karacak agropolitan program in Bogor agropolitan program. The agropolitan concept Regency to be more optimal and to be able to is contained in the Master Plan of Agropolitan reach the goal as have been planned. One of Area Development of the Ministry of which is the sustainable level analysis. The Settlement and Regional Infrastructure result of sustainability of each dimension is determining the agropolitan centers, the then made in a kite diagram to see the trade- regional units, the leading commodities, the off of the sustainability of Karacak infrastructure and institutional support. In the agropolitan area development in Bogor Master Plan, the leading commodity Regency. The analysis result of the determination must meet the criteria as sustainability of Karacak agropolitan area follows: the leading commodity supported by development in Bogor Regency, which is the downstream, the agrobusiness activity evaluated based on five aspects includes the involving the actors and greatest society (local aspects of environment, economy, social, wisdom), and the producing economic scale technology and infrastructure, and policy, as for a big scale and socially accepted by the presented in Table 4 as follows. society (Adisasmita, 2007). The significane of

Table 4. Analysis Result of Sustainability of Karacak Agropolitan Area Development Aspect/ Index of Monte R2 Stress Value Category of Dimension Sustainability Carlo Value Value (%) Sustainability (%) (%) (%) Environment 43.35 43.55 94.53 15.33 Less Sustainable Economy 48.78 48.62 94.62 15.23 Less Sustainable Social 49.96 49.84 94.47 13.85 Less Sustainable Technology & 34.12 34.76 94.93 14.18 Less Sustainable Infrastructure Policy 22.31 23.15 95.26 13.86 Unsustainable Source: RapAgro Analysis, 2018

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The result indicates that the sustainability of sustainability about 22.31-49.96%. In details Karacak agropolitan area development in the key attribute or the lever of sustainable Bogor Regency is categorized unsustainable or level of each aspect reviewed is presented in less sustainable with the index value of Table 5.

Table 5. Key Attribute at Aspect of Research Review Aspect/ Key Attribute RMS Category Dimension Value (%) Environment Level of utilization of mangosteen peel 3.03 Less Sustainable waste as raw material of mangosteen based agro-industry/UMK. Economy Investment cost of mangosteen based 2.54 Less Sustainable agro-industry. Market Availability for mangosteen based processing agro-industry product/ 2.10 UMKM. Availability level of mangosteen raw 2.00 material sourced from access to fresh mangosteen export useful for agro- industry raw material Social Influential level of area development for 5.68 Less Sustainable access to education and health. Level of people’s participation on 5.07 development of agropolitan area. Conflict of land use in agropolitan area. 4.34 Availability of supporting infrastructure 7.11 Technology & Infra in agro-industry/UMKM development. Less Sustainable structure Level of environmentally friendly 4.65 technology use. Policy of mangosteen commodity price determination supporting agro- 4.38 industry/UMKM based area development Policy Availability of strategic policy in regional 4.24 Unsustainable level of regency/province. Incentive and disincentive policy in 4.14 agro-industry/UMKM based agropolitan area development

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ranging from 34.12 to 49.96%. The condition of The result of analysis can be accepted based the trade off in the sustainability of Karacak on the result of validation test found from agropolitan area development indicates that the difference between Monte Carlo value and the whole aspects need to have serious the index of sustainability (ordination value) attention, starting from the aspects of policy, about 0.12-0.84% or <1%. Kavanagh (2001) technology and infrastructure, social, mentions that the difference between Monte economic and social. The policy aspect Carlo value nad the ordination value is becomes an aspect that needs to have the maximally 5%. The value indicates that the most attention in the sustainability of Karacak galat effect (error) or the impact of mistake in agropolitan area development because this giving the very relatively little score. Thus, aspect is categorized unsustainable. Therefore, RapAgro model developed is stated adequate this aspect is the basis of the study in this as the estimator of sustainable index value. dissertation. The policy is more emphasized The output of R2 value is found more or on the regional economic policies by including less between 94.47-95.26% indicating that the the agro-industry aspect to the aspect of value is high enough of >80%. Kavanagh agropolitan area development, so that these (2001) mentioned that Squared Correlation two aspects can support Karacak agropolitan (R2) value is more than 80% indicating that sustainability. the estimator model of sustainable index is On the policy aspect there is the lever good and adequate to use. attribute or the key attribute of sustainability The output in the form of stress value of that is the policy of pricing the mangosteen five aspects reviewed is found more or less commodity that supports the development of between 13.85-15.33% indicating that the non- agro-industry based areas, the availability of confomity criteria is categorized quite strategic policies in the regency / province appropriate. Kavanagh (2001) mentions that level, and the incentive policies in the the stress value tolerated is <20%. development agro-industry-based agropolitan Based on the three criteria of output area. Of the three lever attributes and some validation/analysis result, it can be concluded other data related to the previous analysis, it that the model produced is valid and adequate will then be used as the material for as the estimator. The difference between formulating the alternative of policies to select Monte Carlo value and the sustainable value a priority policy that can be used as a direction for all aspects of review is <5%. It is similar to for the economic development of the the R2 that all reach >80%, and the stress value mangosteen agro-industry based sustainable <20%. The overall sustainability of the aagropolitan area of Karacak. development of the agropolitan area in The economic and social aspects are the Karacak, Bogor Regency is categorized as biggest aspects closest to sustainability unsustainable and less sustainable. From the compared to the other three aspects, although sustainability trade off it is obtained that the they are still categorized as less sustainable. policy aspect is the aspect having the lowest The thing supporting these two aspects is the sustainability level of 22.31% or categorized as existence of mangosteen farming that has unsustainable. While the other four aspects supported Karacak agropolitan area from are categorized unsustainable with the indexes

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generation to generation, so that mangosteen plantations for the farmers and the has economically contributed to their community. Other environmental programs livelihood. The social aspects is reflected by has started to be driven by the environmental the dynamics of farmer groups that are still task force by synergizing with the farmer active and increasingly developing into a groups in the environmental management and combination of farmer groups (Gapoktan) of the waste management in Karacak agropolitan Karya Mekar Karacak Village led by Mr. Bakri. area. In general, the agropolitan echo that is The dynamics of farmer groups and actually a national program is almost unheard mangosteen cultivation cannot be separated, today. The infrastructure and facilities both are interrelated and supportive each previously constructed exist as if they are only other. The lever attribute of the social aspect is used during the program. In other words, the the level of influence of regional development optimization the utilization of infrastructure on the access to education and health, the and facilities seems to be stagnant after the level of people’s participation in the program is over. This condition is unfortunate agropolitan area development and the land because the investment is a high-value asset use conflicts in the agropolitan area. The lever that should be used optimally and attribute of the economic aspect is the cost of continuously in order to support the mangosteen-based agro-industry investment, agricultural development, especially in the the availability of markets for agro-industry agropolitan program area. products and mangosteen-based processing It is necessary to review and find a model MSMEs, and the level of availability of that can re-earth the agropolitan area mangosteen raw materials sourced from the development program so that it becomes a export excess of fresh mangosteen that can be sustainable national program.The requirement used for agro-industry raw materials.The is the existence of government policies that environmental aspect is also quite large have strong legal legitimacy and support and approaching the sustainable category although collaboration from all stakeholders involved. it is still less sustainable. The lever attribute of The agropolitan program should be synergized the environmental aspect is the level of with the concept of economic development utilization of mangosteen peel waste as the through a collaboration with the local leading raw material for agro-industry and commodity based agroindustry in order to mangosteen-based MSMEs. achieve a successful representation of the The thing that supports the target or goal of the agropolitan area sustainability of this aspect is the mangosteen development. The implementation of this nursery business carried out by the farmer program is that the existence of agropolitan groups and Karacak agropolitan area program assets must be optimally utilized and community. In addition, there is also the it needs the additional development of support of the local government in the information and communication networks assistance program for horticulture plants and (IT), technology, and other physical

47 Parwa Oryzanti, et al., Economic Development of Mangosteen infrastructure supporting the agro-industry information for the parties involved in the development. management of Karacak agropolitan area. Mangosteen products are a leading Processing mangosteen fruit with a scale product of Karacak agropolitan area that has of home industry has not provided the optimal attraction and uniqueness value compared to results. This means that it has not been able to other regions in Bogor Regency because it has give a double impact on the environment the potential of mangosteen commodities around the area. Therefore, to obtain a high traditionally cultivated by the local indigenous selling value and to be able to create a people as the main farming in gardens and multiplier effect for the region, it needs to be yards. A financial analysis of mangosteen increased to an industrial scale. This is farming has ever been investigated by Fauzan because Mangosteen has characteristics that A (2011) by assuming a 20-year project period, are easy to experience browning process, so and the results show an average net profit per processing mangosteen must be stable to year of Rp 66,096,770.00; NPV of Rp. obtain its visual interest side. Therefore, 43,544,536; B / C ratio of 3.57; IRR of 9.54%; processing through an agro-industry scale and PBP for 12 years 5 months. The results of approach needs to be conducted. analysis indicate that under normal conditions The characteristics of the mangosteen mangosteen cultivation is feasible to be flesh are quickly turning brown, having the implemented. The selling price of mangosteen water content of 96%, having fiber and seed at the farm level is assumed to be Rp 500 / content. If the concentrate is taken, it is only fruit and will increase by Rp100 / fruit every 5 about 3% of the initial weight of the fresh years. Mangosteen fruit. The peel cannot be made The large potential of mangosteen is a into drink or food because it tastes bitter. So source of raw materials for mangosteen-based the best alternative to take the fully valuable agro-industry. But so far the observations and benefits of mangosteen peel is by processing it research have shown that the management of into preparations, both in the form of the off farm side of mangosteen is not optimal capsules, tea, and xanthones syrup. The in Karacak agropolitan area. Therefore, this xanthone content is almost all of the research studies a policy direction to mangosteen peel. But many products being encourage the establishment of mangosteen- circulated in the market with the brand based agro-industries in the agropolitan area xanthone only contain 3% of mangosteen peel one of which is to answer the optimization of extract, the rest is a mixture of other simplicia the use of mangosteen as a regional leading extracts such as soursop. Thus, the approriate product. So the investment analysis needs to product form to process mangosteen peel into be conducted to find out the benefits and mangosteen peel extract is in the form of drug value of benefits for the investors or the preparations, and the product must be interested parties to establish the agro- registered to BPOM as medicine. Mangosteen industries. The results of the investment peel extract is interesting to be used as feasibility analysis can be used as a proposal or traditional medicine in capsule dosage form.

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The development of mangosteen peel extract capsulated mangosteen peel extract. The industry in capsule preparations requires in- assumptions for calculating the value of each depth analysis support, especially if it is investment are presented in Table 6. The basic associated with the development of Karacak assumptions used are the researcher’s agropolitan areas that has the potential as a simulations based on any information provider of raw materials that is fresh collected from studies at the agro-industry mangosteen. The extracted mangosteen peel level and the scale of mangosteen-based SMEs extract products going to be developed for the in Bogor Regency. region are high value products. Mangosteen Mangosteen peel extract cleaners have peel is a waste product or waste from the already existed in Karacak agropolitan area consumption of fresh or processed although they have only been processed with mangosteen fruit. In addition to leather waste, simple technology and the business scale is fresh whole fruit from low-grade export still relatively small, so that the production has residues can also be used as raw material for not been continuous, and still has some the agro-industry. obstacles including marketing, quality and The very cheap price of remaining export capital. While the capsulated mangosteen peel mangosteen when sold directly in the market extract is a mangosteen derivative product is a strong reason to use it as a processed proposed through this research. The product product of mangosteen peel, thus giving a has not been produced in Karacak agropolitan greater output for Karacak agropolitan area. In area. Karacak agropolitan area itself there has Through this study it is directed to be already been processed mangosteens those are developed into an agro-industry that can be mangosteen dodol and mangosteen peel implemented in Karacak agropolitan area. The extract. Both types of products are carried out feasibility analysis of agro-industry investment with the scale of regional women's MSME is conducted by the analysis tools in the form businesses. of financial feasibility criteria and regional Empowering women in economy like economic values. It is intended to find out this needs to be supported to develop that will how feasible the mangosteen-based agro- eventually becomes a driver of the regional industry is so that it becomes the information economy. However, the two products have not for the public and the investors or the private beenanalyzed yet for business feasibility if they sector in making investment decisions in the want to be scaled up to become agro- agropolitan area. industries in the region. So these products Mangosteen dodol products and The need to be analyzed. The feasibility analysis of results of analysis obtained indicate that the agro-industry investment in this research mangosteen peel extract agro-industry is includes three types of mangosteen derivative feasible with the parameters of B / C ratio of products those are mangosteen dodol, 1.39 and the duration of return on investment mangosteen peel extract cleanser and of 1.025 years. Compared to the dodol and

47 Parwa Oryzanti, et al., Economic Development of Mangosteen mangosteen peel floor cleaner agro-industry, agro-industry is still higher and the value of the added value of mangosteen peel extract the benefits is also greater for health.

Table 6. Assumption of Investment Cost of Mangosteen Product Agro-industry Product Investment Fixed Cost (Rp) Variable Cost Spending/ Value (Rp) (Rp) Year (Rp) Mangosteen Dodol 984,725,000 1,970,379,750 2,256,120,000 4,226,499,750 Floor Cleaner Soap of 1,447,840,000 2,047,032,400 2,318,927,200 4,365,959,600 EKM Mangosteen Peel 5,200,000,000 3,963,080,000 5,196,000,000 9,159,080,000 Extracted Capsule

Dodol and mangosteen peel extract extracted cleaner agro-industries are analyzed cleaner agro-industries have a high because both of these businesses have already vulnerability to fluctuations in raw material existed in Karacak agropolitan although they prices and product price competition in the are still SME scaled and not continuous. But market with similar products. In general, the this has provided education for the results of the investment feasibility analysis of community that mangosteen can also be the three products are presented in Table 7. developed through downstreaming develop. Dodol mangosteen and mangosteen peel

Table 7. Result of Investement Feasibility Analysis of Mangosteen Agro-Industry in Normal Condtion No Criteria of Investment Values of Product (1) (2) (3) 1 PBP (Year) 1.03 3.50 0.46 2 NPV (Rp) 4,914,291,007 1,186,600,410 68,369,956,937 3 B/C Ratio 1.18 1.04 2.13 4 IRR (%) 111 20.2 223.4 5 BEP (Rp) 42,967,849,791 51,797,300,675 60,914,477,799 6 1,432,262 3,453,153 870,207 BEP (product) 7 8,595,277,500 2,878,387,200 114,569,200,000 Net Profit (Rp) Information: Mangosteen Dodol Mangosteen Peel Extracted Floor Cleaner Capsulated Mangosteen Peel Extract

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If the sensitivity is withdrawn, the by the price increase of mangosteen raw condition of the price drop of the product to material to Rp. 15,000 / kg, the price drop of Rp 13,000 / bottle on the mangosteen peel products for mangosteen dodol to Rp. 25,000, floor cleaner becomes inappropriate to carry and for thecapsulated mangosteen peel extract out with a B / C ratio of 0.9 and NPV of IDR - to Rp. 50,000 / pack and the interest rate rising 2,745,885,380. The next sensitivity is tested to 20%. The results are shown in Table 8.

Table 8. Calculation Result of Sensitivity of Investment Criteria of Mangosteen Agro-Industry No Criteria of Investment Values of Product

Mangosteen Dodol Mangosteen Peel Extract 1 PBP (Year) -134.90 1.025 2 NPV (Rp) -1,013,423,329 17,690,067,855 3 B/C Ratio 0.95 1.39 4 IRR (%) -116.6 102.1 5 BEP (Rp) 58,763,377,812 77,685,494,941 6 BEP (pack of product) 2,350,535 1,553,710 7 Net Profit (Rp) -1,052,722,500 49,889,200,000

Source of data: Result of financial feasibility analysis

In Table 8 it can be seen that Under these conditions, this agro- mangosteen dodol agroindustry is very industry can achieve a net profit of IDR vulnerable to the price increase of raw 49,889,200,000 with an NPV value of IDR materials and the price drop of products. In 17,690,067,855. The feasibility analysis of agro- addition, the increase in interest rates also industry investment is significant in this plays an important role in the adaptation of research study to determine the economic the agro-industry. With a B / C Ratio of 0.95 or value of the processed products from the below 1, and a NPV value that shows a minus, regional leading commodities that is the mangosteen dodol industry is not feasible mangosteen that will be used as an icon or as a to run at a product price of Rp. 25,000.00. lever for the sustainability of Karacak While the capsulation of mangosteen peel agropolitan area. Seen from the point of view extract agroindustry shows that the B / C ratio of health, education, environment, economy is still above the number 1, indicating that it is and social, mangosteen processed products still feasible and very adaptive to the increase give benefits and added value. Investment is in bank interest rates with an IRR of 102.1%. needed for the implementation.

53 Parwa Oryzanti, et al., Economic Development of Mangosteen

The added value of each mangosteen- region's economic development based on based product analyzed using the Hayami mangosteen peelagro-industry. Bringing method in this research can be seen in Table mangosteen peel waste into the core of business 9. in the region through the mangosteen peel extract agro-industry gives a multiplier effect on Table 9. Added Value of Mangosteen Agro- the development of other mangosteen-based Industry Products agro-industry. No Agro- Value Margin Mangosteen peel extract agro-industry Industry Added (Rp) becomes the most adaptive alternative to Products changes in some parameters of sensitivity to 1 Mangosteen 53,677/kg 89,857/kg investment feasibility. In addition, the use of Dodol mangosteen peel into products that have high 2 Floor Cleaner 18,745/L 33,745/L economic value can give solutions to the Soap of EKM 3 Mangosteen 90,833/kg 132,833/kg environmental sustainability, optimize the Peel regional resources and encourage the creation Extracted of jobs in the agropolitan area so that the living Capsul standards of the regional community will be better. The agro-industry can be established on The biggest added value is the an industrial scale or small and medium scale capsulated mangosteen peel extract product industry (IKM) in Karacak agropolitan area as a of Rp 90,833 / kg. Then the added value of buffer zone and it has a dual role in giving spirit mangosteen dodol is Rp. 53,677 / kg and the to the regional economic growth through the smallest on the mangosteen peel extract floor development of SMEs in the region. cleaner soap is Rp. 18,745 / L. From the The role of agro-industry in general is information obtained, it will give knowledge mainly to give solutions to the results of to the stakeholders to glance at the area and analysis of the sustainability of Karacak give serious attention to the management of agropolitan area especially on the economic natural resources as a whole in the region. aspects, because the results of analysis show Some related stakeholders in the that it is less sustainable. This lack on the side development of agropolitan areas by making will be complemented by agro-industry agro-industries as core development include activities as a driving force and lever for government, private sector, BUMN / BUMD, regional economic growth. R & D, universities, farmers, SMEs, With the movement of the agro-industry cooperatives, associations, communities, sector, the added value that rotates in the community institutions and banks. The region becomes more abundant from the feasibility information stating that upstream (cultivation)downstream sectors mangosteen-based agro-industry, especially (especially agro-industry). Wages that will roll the mangosteen peel extract product, that in the region are increasingly being accepted by this capsulation is feasible, becomes the the regional community, among others are capital and the basic spirit in the agropolitan labor wage cultivation, wages of agro-industrial

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labor both technical and operator levels and creation of high added value conducted by the managerial levels. If more and more regional leading commodity-based agro-industry model communities involved in mangosteen-based of the agropolitan area. The model is universal, economic activities, both cultivation and can be applied in any region adapted to agro-industry, the money rotating in the commodities and characteristics of the region. region will be even more numerous. This will CONCLUSION increase the purchasing power of people of the region, which in turn will promote the The sustainable index of the economic welfare and economic sustainability of aspects of Karacak agropolitan area amounted Karacak agropolitan area. The other role of 48.78 means that the status of agropolitan area the mangosteen peel extract industry is the for the economic development is less creation of new jobs for people in Karacak sustainable. The potential mangosteen as the agropolitan area and other surrounding export commodity can be optimized and areas. followed by the downstreaming development of Agro-industries of mangosteen dodol mangosteen products with high value added and mangosteen peel extract floor cleaner through the agroindustry approach. The can be carried out using raw materials that capsulated mangosteen peel extracted agro- are adjusted to the price capabilities of the industry products have big opportunity to SME business scale, so that SMEs in the atrract the investor’s interest because it is region also become part of the regional feasible with the NPV value of Rp 17,690,067,855 economic improvement. By targeting the and the additional value of Rp 90,833/kg of raw consumers and the different market levels, materials. these SMEs can be directed towards The sustainable index value of technology becoming an alternative creative economy and infrastructure aspects of Karacak for the regional community. agropolitan area is 34.12, which means that the In addition, these mangosteen-based status of agropolitan area to develop the SMEs may collaborate with a good technology and infrastructure is less partnership system with agro-industry to be sustainable. The optimalization of the role of able to utilize agro-industrial waste that can Department of Public Works and Public still be used to produce other products with Housing (PUPR) in the regional dan province SME-scale processes. level become the key element of the success, Agro-industry and UKM may coexist especially the support for physcial building and with their respective roles and business feasible housing for the society in agropolitan orientations but can still achieve the same area. goals in developing sustainable agropolitan The sustainable value of environmental economic area of Karacak. The development aspect is 43.35, which means that the status of of the theory of agropolitan through the agropolitan area to manage the environment is research of study finally has found the less sustainable. The sustainable index value of development of the theory of economi agro-industry asepct of Karacak agropolitan growth of agropolitan area through the area is 49.96, which means that the status of

53 Parwa Oryzanti, et al., Economic Development of Mangosteen

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