East Kalimantan Environmentally Sustainable Development Strategy

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64 Exhibit 42 New pockets of environmentally sustainable growth can be developed from agriculture and aquaculture on already degraded land Rubber ▪ Total suitable area: 3.29 million Ha ▪ Main commodities: Latex ▪ Investment: IDR 94 Billion ▪ NPV: IDR 176 Billion ▪ Payback: 10 year Cocoa ▪ Main commodities: Forastero (bulk cocoa), criolo (fine cocoa), and hybrid cocoa ▪ Investment: IDR 1,200 Billion ▪ NPV: IDR 160 Billion ▪ Payback: 8 year Pepper ▪ Main commodities: Pepper for food industry and pharmacy ▪ Investment: IDR 0.04 Billion ▪ NPV: IDR 0.03 Billion ▪ Payback: 3 year Coffee ▪ Main commodities: Robusta coffee ▪ Government has established Sasamba Zone (in Balikpapan and Kutai Kertanegara) as integrated development zone for coffee export Livestock ▪ Main commodities: Beef ▪ Local demand is 36,000 cattle/year, existing local supply is only 3,000 cattle/year; National demand is 491,200 cattle/year Oranges ▪ Main commodities: Premium borneo orange ▪ Premium commodity of East Kalimantan ▪ High productivity: 20-25 kg/tree ▪ Investment: IDR 0.4 Billion Fishery ▪ Suitable area for fishery: 72.24 million Ha ▪ Main commodities: Tuna, Kakap, Cakalang, Kuri, Bawal, Udang Windu, Lobster ▪ Investment: IDR 2.7 Billion ▪ NPV: IDR 1.7 Billion Seaweed ▪ Main commodities: seaweed for food, cosmetics, and medicine ▪ Investment: IDR ▪ 1.1 Billion ▪ NPV: IDR 1.5 Billion ▪ Payback: 3 years Pineapple ▪ Main commodities: Srikaya Pineapple ▪ Investment: IDR 0.05 Billion ▪ NPV: IDR 0.02 Billion ▪ Payback: 2 years SOURCE: East Kalimantan Investment Board Exhibit 43 A wide variety of estate crops with different characteristics and returns can be developed in East Kalimantan Characteristics of crops in East Kalimantan Cocoa Rubber Orange Coconut Seaweed Revenue (IDR Million/ha) 0 19.5 25.9 40.4 42.0 75.9 100 Investment required (IDR Million/ ha)* 0 11.8 19.4 39.1 66.4 128.7 150 Jobs (Workers/ha) 0 0.9 1.0 1.2 1.5 1.7 2 IRR (%) 0 28 31 31 35 39 40 Payback period (years) 0 2.5 7.6 7.7 9.1 10 15 Source: Regional Investment and Permittance Board of East Kalimantan Province
65 farmers . We have identified several important enablers for the agricultural sector including spatial planning, technology, farmer productivity, market access, and MRV. An agricultural transformation depends on all parts of the agricultural system working together; while each element can improve the agricultural sector’s production and abatement, a sustainable solution requires all elements working together. In order to support the growth of the agricultural sector, spatial planning should focus on identifying several ‘breadbasket’ areas. A breadbasket strategy aims at a breakthrough in food production in certain defined geographic areas. Breadbaskets are defined as agricultural areas with potentially high productivity for specific food crops, good market access potential, and relatively high rural population density. In addition, to support East Kalimantan’s goal to reduce CO2e emissions, these breadbaskets should also be located in areas with degraded lands or grasslands to prevent further deforestation. By identifying breadbasket regions, agricultural expansion can be focused in the areas with highest potential as well as lowest emissions. Nucleus-Plasma schemes (Perkebunan Inti Rakyat) are an important tool to raise yields of smallholder estate crops located near major plantations. Nucleus-plasma programs have been developed for palm oil plantations but could be expanded to other, high-value estate crops. The programs work by having plantation companies develop palm oil plots for smallholders in a ‘plasma’ area around their own plantation ‘nucleus’. The management of the plasma area is run by a cooperative of the smallholders, which typically contracts technical functions back to the nucleus plantation company, thus growers often work as laborers on their plots. The smallholders receive seedlings, inputs such as fertilizers, and often a guaranteed price for their produce. These schemes have worked in East Kalimantan, and plasma smallholders have yields twice as high as independent palm oil smallholders. But the plasma schemes do have weaknesses as they can interfere with traditional community management of lands (adat) as well as change traditional land ownership patterns. Plasma schemes could be expanded to other high-value estate crops; for less profitable estate crops, government subsidies may be needed to get private sector support for such programs. Capability building can be achieved by creating a limited number of aggregation units operated by private local change agents (e.g., local entrepreneurs and farmers as well as small warehouse operators on the post-harvest side) whom government, donors, input/off-take companies, and banks can work with and who in turn will aggregate and extend support to lead farmers and or farmer groups and individual smallholders on the production side. One option is to develop Agriculture Centers that will perform three types of activities: (i) offer off-take from farmer groups; (ii) provide inputs on credit; and (iii) provide services (e.g., tractor services, storage). Each Agriculture Center should have a large warehouse facility. International examples suggest it could serve farmers within a 20 km radius and work with about 200 to 300 lead farmers who would in turn aggregate about around 5,000 smallholders overall. These centers should be placed in agricultural breadbasket areas with sufficiently dense smallholder populations; based on current agricultural lands, number of smallholders, and infrastructure or market access, potential pilots could be in Kutai Kertanegara, Kutai Timur, and Penajam Paser Utara. DRAFT Extension services are still an important government program to supporting smallholders, particularly in isolated regions. Private sector cooperation with farmers is often limited to those with high-value estate crops who are located in the lowlands near plantations and processing facilities. Thus, government extension workers are still important, particularly to provide access to credit, seeds, and technology to smallholders growing food crops and located in the more remote interior of East Kalimantan. Both the budget and number of extension service workers has fallen in Indonesia; today Indonesia has roughly 6 extension service workers per 10,000 farmers, compared to China, which has a ratio of 16 per 10,000. Moving to China’s benchmark, East Kalimantan would need an additional 200 extension workers.
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East Kalimantan Environmentally Sus
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3 East Kalimantan Environmentally S
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5 Contents Preface 7 Acknowledgemen
Page 7 and 8:
7 Preface A broad global consensus
Page 9 and 10:
9 Acknowledgements The DNPI and the
Page 11 and 12:
11 Executive summary East Kalimanta
Page 13 and 14: 13 1. The development of coal-bed m
Page 15 and 16: DRAFT 15
Page 17 and 18: 17 Kaltim Green Program The Governm
Page 19 and 20: 19 1. The context for East Kalimant
Page 21 and 22: 21 This resource development pathwa
Page 23 and 24: 23 Both Berau and Malinau are large
Page 25 and 26: 25 In the BAU scenario, CO 2 e emis
Page 27 and 28: 27 TOP 5 ABATEMENT INITIATIVES Top
Page 29 and 30: 29 Kalimantan’s shift to a climat
Page 31 and 32: 31 The sector’s 57 MtCO2e of net
Page 33 and 34: 33 Outside of the sector’s need f
Page 35 and 36: 35 The greatest expansion is expect
Page 37 and 38: 37 improving water management in on
Page 39 and 40: 39 Including financial transfers fo
Page 41 and 42: 41 after the identified abatement m
Page 43 and 44: 43 The Case of Oil Palm Permits and
Page 45 and 46: 45 Emissions from the forestry sect
Page 47 and 48: 47 across Kalimantan in 1997 and 19
Page 49 and 50: 49 Utilizing concession buyout sche
Page 51 and 52: 51 Pilot Projects Pilot projects ha
Page 53 and 54: 53 GDP Potential The economic decli
Page 55 and 56: 55 Downstream manufacturing would i
Page 57 and 58: 57 downstream manufacturing as it w
Page 59 and 60: 59 Swidden agricultural practiced b
Page 61 and 62: 61 Although East Kalimantan has far
Page 63: 63 Reaching average national yields
Page 67 and 68: 67 Many mining operations are locat
Page 69 and 70: 69 Unlike timber or oil palm planta
Page 71 and 72: 71 exploration and production conce
Page 73 and 74: 73 The Economic Opportunity of Post
Page 75 and 76: 75 Entering downstream value chain
Page 77 and 78: 77 Current Context The oil and gas
Page 79 and 80: 79 granted in 2008-2009 and contain
Page 81 and 82: 81 Emission from flaring is declini
Page 83 and 84: 83 Satellite images can help monito
Page 85 and 86: 85 Under business as usual, relativ
Page 87 and 88: 87 BERAU Berau is the third largest
Page 89 and 90: 89 350,000 ha of Kutai Timur is cat
Page 91 and 92: 91 substantial natural resource ext
Page 93 and 94: 93 Borneo conservation area as well
Page 95 and 96: 95 agricultural processing. As Pena
Page 97 and 98: 97 Range of climate related risks t
Page 99 and 100: 99 predict increased precipitation
Page 101 and 102: 101 In addition to the refinery and
Page 103 and 104: 103 The greatest economic risks fro
Page 105 and 106: 105 change issues. In December 2009
Page 107 and 108: 107 Proposed BFCP governance and ma
Page 109 and 110: 109 the lack of a strong system, th
Page 111 and 112: 111 Carbon Accounting, Standards, a
Page 113 and 114: 113 EXAMPLE INITIATIVES REQUIRING C
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115 for example, includes represent
Page 117 and 118:
DRAFT 117
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119 Sources • 2010, Kesiapan Kali
Page 121 and 122:
121 • Badan Perijinan Dan Penanam
Page 123 and 124:
123 • Daniel Murdiyarso et al, Me
Page 125 and 126:
125 • Marcus Colchester et al, Pr
Page 127 and 128:
127 • Yosep Ruslim et al, STUDY O
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