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

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

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

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 the has not targetted yet in the change in attitude, increase in income of the area and also can but still in the level of using the modern decrease the massive economic leakage. One of agricultural device. There is no change in 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 is the local resources, or optimizing the leading closely related to the idea of Marimin, et.al commodities owned by the agropolitan area. In (2015) about the issues mentioned above. Both 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 either concept that can bridge the aim of rural area at the local market or the export market. The and agro-industry development in a big circle value added owned by the people in the of natural and environment resource 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 of those are settlement and agrobusiness aspect as life environment in the agropolitan area, the the main aspect forming the definition of approach of technique and application of green agropolitan, as presented by Rustiadi (2004). productivity concept and zero waste is applied One of agrobusiness functions is agricultural to plan the frame of production process for the product processing or known as agro-industry. agro-industry. The concept of green Afterwards, what kind of agro-industry model productivity is introduced for the first time by that can be developed and can involve the Asian Productivity Organization (APO) in 1994 people in agropolitan area? Considering that as the respond to the needs on the agro-industry built must be in the relationshipbetween the strategy of economy agropolitan area, the next question is what kind development and the environment of role model to make the agro-industry preservation.The problems in model

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development of the sustainable agro-industry Karacak Village, Leuwiliang District. The case agropolitan area involve various complex study of mangosteen agro-industry is elements, among others are the natural conducted in UMKM and industry scale. The resources (SDA), the environmental resources UMKM scale is mangosteen dodol and (SDL), the social resources (SDS), the human mangosteen peel extract floor soap located in resources (SDM), the technological resources Karacak agropolitan area. While the agro- (SDT) and the economic resources (SDE). All industry scale at PT Zena Nirmala Sentosa these elements are the composer of agro- producing the same products with Garcia industry agropolitan system. In order to be able brand is located at Jl. Raya Cicadas No. 51, RT to analyze the needs and interest of various 01/02 Cicadas Village, Gunung Putri District, elements to reach the same goal, this research Bogor Regency. is conducted through System 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 sustainable and sub-system to form a system. status of Karacak agropolitan area is stated in In this research, the feasibility analysis on the form of sustainable index based on the Rap- agro-industry investment is conducted by the Agro approach by applying the MDS technique. financial feasibility method to make an The Rap-Agro approach is modified from the economic study of mangosteen peel that is the Rapfish (Rapid Assessment Techniques for consumption waste or the mangosteen food Fisheries) Method developed by the Fisheries processing valuable in health or business Center, University of British Columbia (Fauzi prospect in the agropolitan area. The aim of and Anna, 2005). MDS method is a statistic this research is : (1) analyzing the condition of analysis technique that transforms each sustainable status of Karacak agropolitan area dimension and multi-dimension into the and (2) analyzing the feasibility and the value sustainable dimension of agro-industry added of mangosteen peel based agro-industry. agropolitan system. This research is aimed having a description of the sustainable level of agropolitan area RESEARCH METHOD development in Karacak, Bogor Regency. The This research is conducted in Bogor step of MDS analysis is presented in Table 2. Regency since July 2017 until August 2018. The case study is at Karacak Agropolitan Area, Table 2. Steps of MDS Analysis

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

Steps Description Explanation that can be found in the time of field Determina Economy Each observation. tion of Environment dimension is Attribute Social outlined based The net value of B/C ratio bigger than one Policy on the is a requirement to make a project feasible in Technology attribute finance so it can be continued, on the contrary, and Infrastructure if the value is smaller than one. It is a sign that Assesment In the ordinate The score is the project is not feasible to be conducted of scale based on based on (Gray, et.al, 1992). According to Sofyan (2002), Attribute the sustainable Scientific PBP technique is used to determine how long criteria of each Judgement. dimension The score is the capital planted in a business will be back. ranging If the alternative of cash flow is found between 0 – 2, from the business proposed again, the which starts from bad (0) to alternative suggestion of business that gives the good (2) shortest period is the best. The Break Even Composition The score value 0 – 24.99 Point (BEP) analysis is used determine the of index and of each bad 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 the benefit found (Gray et. al, 1993) al way to enough determine one 75 – 100.0 Afterwards, to see the elasticity of a or some points good project of agro-industry, a sensitivity analysis is reflecting the conducted. This analysis is conducted by sustainable 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 Gray Table 3. In this research a sensitivity analysis is et.al (1992) and Gittinger (1982) in Rustiadi, conducted to the change of interest rate, raw 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 reaching price and the interest rate are increased, and (2) the next purpose so that the criteria of product the product price is decreased, the raw material to hold an agropolitan area can be widened into price is increased, and the interest rate is the social, environmental, technological and increased. The investment feasibility study can infrastructure, institutional or any other factors be used to calcultae the economic value added

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of the area. The economic value added of the sea level (dpl), 42.62% at the height of 100-500 area is analyzed using Hayami method. meter dpl, 19.53% at the height of 500 – 1,000 meter dpl, 8.43% at the height of 1,000–2,000 Table 3. Criteria of Financial Feasibility of meter dpl and 0.22% at the height of 2,000– Agro-Industry 2,500 meter dpl. Besides, the morphology Parameter of Feasible Criteria condition of Bogor Regency mostly is the Feasibility highlands, the hills, and the mountains with PBP (Year) Lower than the the building blocks dominated by the results of required time volcanic eruption covering andesit, tufa and NPV (Rp) More than 0 (nol) basalt. The combined stone is included in the B/C Ratio More than 1 (satu) nature of relatively pass water stone, in which IRR (%) Bigger from the its feature of steeping the rain water is great. walking interest 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 District. materials to the erosion, among others are Geographically Bogor Regency has an area on Latosol, Aluvial, Regosol, Podsolik and 298,838.304 hectare, located between 6º18'0" – Andosol. Therefore, some areas are vulnerable 6º47'10" South Latitude and 106º23'45" – to the landslide. 107º13'30" East Longitude. This area at the South The area width of Bogor Regency based 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 40 with Bogor City. Leuwiliang District has an area districts including 417 villages and 17 sub- 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 villages have been built those are Pasir Angin Province and at the East is Cibungbulang Village, Megamendung District, Urug Village District and Pamijahan District. and Jayaraharja Village Sukajaya District and Bogor Regency has varied type of area Mekarjaya Village Rumpin District. Leuwiliang morphology, from the relatively lowlands at the District administratively has eleven villages North to the highlands at the South.about those are Purasari, Puraseda, Pabangbon, 29.28% at the height of 15-100 meter above the

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Karyasari, Karacak, Barengkok, Cibeber I, has its own role assisting the farmers to solve Cibeber II, Leuwimekar, Leuwiliang, and the agricultural problems occuring in Karacak Karehkel. agropolitan area specifically related to the The amount of residents of Bogor leading commodity that is mangosteens. Regency based on the data of Central Bureau of Leuwiliang District is included in the Statistics (BPS) in 2016 is 5,587,390 people, strategic commodity development zone covering 2,856,529 male people and 2,730,861 through the agropolitan area development. female people. In 2015 there are 5,459,668 Karacak village is one village located in people, which means that in 2016 there is an Leuwiliang District and is the part of increase of 2.34 % compared with 2015. From Agropolitan Area in Bogor Regency as the the data of potential population, Leuwiliang development stub of Agropolitan program in District has a projection of total population of 2005. The marketing of Mangosteen 121,597 people covering 62,752 male people and Commodity has reached the overseas like 58,845 female people. The amount of male Hongkong and Taiwan, also to the middle East population is more than the female one. It is countries. Mangosteen Development has used potential for the area in the development of the Procedure Operational Standard (SOP) of mangosteen farming business and maintaining Good Agricultural Practices in its cultivation. the sustainability of mangosteen cultivation The central location of leading commodity of cycle in Karacak agropolitan area. Besides, the mangosteen is located in Leuwiliang District, potential may support the increasing dynamic Leuwisadeng District, and Cigudeg District, the of the adult male farmers in the area. development area is located in Jasinga District Most people work as farmers but there and Klapanunggal District. Mangosteen is are still 1,364 farmers who have no lands or included in one of the primary leading about 47.8% farmers who do not cultivate their commodities in Bogor Regency in 2016, which won lands. This condition is aggravated by the production reached 79,927 ton (Bureau of land ownership of less than 1 ha amounted Horticulture Food Crops and Plantation of 51.3% of the total 2,885 farmers’ household, or Bogor Regency, 2016). it can be concluded that half of the amount of As leading commodity, mangosteen farmers in Karacak Village are the smallholders. production has great potential to be able to As the agropolitan area, Karacak Village is an increase the farmers’ income. One effort of the agricultural village that must be supported by Bureau of Agriculture of Bogor Regency to hold the adequate agricultural institution. The the integrated guidance and counselling, in external institutions assisting are PKHT-IPB, 27thFebruary 2001 mangosteen farmers group of Bureau of Horticulture Food Crops and ”Karya Mekar” has been established in Cengal Plantation of Bogor Regency, UPTD of Kampoong, Karacak Village, Leuwiliang Leuwiliang District, PPL (The Agricultural District, with the number of members Extention Worker) from the Agricultural amounted 33 people.The development of Extension Center (BPP) Leuwiliang, farmers mangosteen commodity has been continuing group, association of farmers group (gapoktan) up to the rise of the initial concept and KTNA (Farmers Contact). The institution development of Agropolitan Area that is

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realized through the Masterplan of Agropolitan environment of Bogor Regency. In the Area of Bogor Regency in 2005 (Figure 1) establishment of agropolitan area, one village covering nine districts including Leuwiliang in Leuwiliang District that is Karacak Village is District. The development projection of this determined as the agropolitan area center with area in the future can be carried out by the mangosteen leading commodity. Karacak developing either the on farm or off farm agropolitan area in Bogor Regency is supported commodity and the sustainable area by the plantation commodity that is 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 strategic quality, quantity, and continuity of the sub-sectirs concerning all activities of production and raw materials provision of management of natural resource, human mangosteen. The continuity of mangosteen raw resource, production facililites, tools and 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 that The increase in production can be the plantation activities will give benefit, from conducted by the area expansion the economic, ecological, and social sectors, in (extensification) or the increase in productivity line with the sustainable development. of each tree (intensification). The land area Sustainable development is a development expansion has been conducted by distributing concept that has become the mainstream of the CV variety mangosteen seeds.. Raya (Cultivar world development in general including Raya) known as Manggis Raya, is the leading Indonesia. It can actually be seen from the local mangosteen developed by the Institute of implementation of development by putting Agriculture of Bogor (IPB). forward the sustainable aspects in all sectors Based on the program planning of including plantation and industrial sectors. agropolitan area development in Bogor According to Todaro and Smith (2003), the Regency in the project period of 2005-2010, the sustainable development gives implication on agropolitan program in Karacak District has the dynamic balance between the functions finished without any sustainability. The maintenance and transformation in the frame agropolitan program is held through the of fulfilling the requirement of life. The establishment of agropolitan POKJA sustainable development is widely based on strengthened by the Decision Letter of the three pillars of development those are Regent No.590/191/Kpts/Huk/2004 containing economy, social, and ecology (Munasinghe, the information of cooperation between the 1993). Further Ekins and Simon (2001) mention government and the society to prepare the that the sustainable development usually has agropolitan area. The program is follow-up of three main aspects of development as follows: the Decision Letter of the Minister of 1) environmental development, either in the Agriculture No. 312/TU.210/ A/X/ 2002 on the use of resources, the protection of ecological estabishment on agropolitan area in 2002 and process, the system of life support, and the its position as the second hierarchy in the biodiversity; 2) economic development to

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

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 the Karacak agropolitan area development in Bogor key attribute or the lever of sustainable level of Regency is categorized unsustainable or less each aspect reviewed is presented in Table 5. sustainable with the index value of

Table 5. Key Attribute at Aspect of Research Review Aspect/ Key Attribute RMS Value Category Dimension (%) 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 4.38 determination supporting agro-

industry/UMKM based area development

Availability of strategic policy in regional Policy 4.24 Unsustainable level of regency/province.

Incentive and disincentive policy in agro- 4.14 industry/UMKM based agropolitan area

development

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

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

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

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

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

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 community results of the investment feasibility analysis of that mangosteen can also be developed the three products are presented in Table 7. 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 If the sensitivity is withdrawn, the 2,745,885,380. The next sensitivity is tested by condition of the price drop of the product to the price increase of mangosteen raw material Rp 13,000 / bottle on the mangosteen peel to Rp. 15,000 / kg, the price drop of products floor cleaner becomes inappropriate to carry for mangosteen dodol to Rp. 25,000, and for out with a B / C ratio of 0.9 and NPV of IDR - thecapsulated mangosteen peel extract to Rp.

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50,000 / pack and the interest rate rising 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 mangosteen Under these conditions, this agro- dodol agroindustry is very vulnerable to the industry can achieve a net profit of IDR price increase of raw materials and the price 49,889,200,000 with an NPV value of IDR drop of products. In addition, the increase in 17,690,067,855. The feasibility analysis of agro- interest rates also plays an important role in the industry investment is significant in this adaptation of the agro-industry. With a B / C research study to determine the economic Ratio of 0.95 or below 1, and a NPV value that value of the processed products from the shows a minus, the mangosteen dodol industry regional leading commodities that is is not feasible to run at a product price of Rp. mangosteen that will be used as an icon or as a 25,000.00. While the capsulation of lever for the sustainability of Karacak mangosteen peel extract agroindustry shows agropolitan area. Seen from the point of view of that the B / C ratio is still above the number 1, health, education, environment, economy and indicating that it is still feasible and very social, mangosteen processed products give adaptive to the increase in bank interest rates benefits and added value. Investment is needed with an IRR of 102.1%. for the implementation.

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

The added value of each mangosteen- economic development based on mangosteen based product analyzed using the Hayami peelagro-industry. Bringing mangosteen peel method in this research can be seen in Table waste into the core of business in the region 9. through the mangosteen peel extract agro- industry gives a multiplier effect on the Table 9. Added Value of Mangosteen Agro- development of other mangosteen-based agro- Industry Products 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 of Extracted 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 analysis to the stakeholders to glance at the area and of the sustainability of Karacak agropolitan area give serious attention to the management of especially on the economic aspects, because the natural resources as a whole in the region. results of analysis show that it is less sustainable. Some related stakeholders in the This lack on the side will be complemented by development of agropolitan areas by making agro-industry activities as a driving force and agro-industries as core development include lever for regional economic growth. government, private sector, BUMN / BUMD, With the movement of the agro-industry R & D, universities, farmers, SMEs, sector, the added value that rotates in the region cooperatives, associations, communities, becomes more abundant from the upstream community institutions and banks. The (cultivation)downstream sectors (especially feasibility information stating that agro-industry). Wages that will roll in the region mangosteen-based agro-industry, especially are increasingly being accepted by the regional the mangosteen peel extract product, that this community, among others are labor wage capsulation is feasible, becomes the capital cultivation, wages of agro-industrial labor both and the basic spirit in the agropolitan region's technical and operator levels and managerial

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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 areas. export commodity can be optimized and Agro-industries of mangosteen dodol followed by the downstreaming development of and mangosteen peel extract floor cleaner can mangosteen products with high value added be carried out using raw materials that are through the agroindustry approach. The adjusted to the price capabilities of the SME capsulated mangosteen peel extracted agrobusiness scale, so that SMEs in the region also industry products have big opportunity to atrract become part of the regional economic the investor’s interest because it is feasible with improvement. By targeting the consumers the NPV value of Rp 17,690,067,855 and the and the different market levels, these SMEs additional value of Rp 90,833/kg of raw can be directed towards becoming an materials. alternative creative economy for the regional The sustainable index value of technology community. and infrastructure aspects of Karacak In addition, these mangosteen-based agropolitan area is 34.12, which means that the SMEs may collaborate with a good status of agropolitan area to develop the partnership system with agro-industry to be technology and infrastructure is less sustainable. able to utilize agro-industrial waste that can The optimalization of the role of Department of still be used to produce other products with Public Works and Public Housing (PUPR) in the SME-scale processes. regional dan province level become the key Agro-industry and UKM may coexist element of the success, especially the support for with their respective roles and business physcial building and feasible housing for the orientations but can still achieve the same society in agropolitan 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 area growth of agropolitan area through the is 49.96, which means that the status of creation of high added value conducted by the

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

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