11 Jul 2011

SEAP Quarterly Newsletter 2011-03

In this IssueIPNI SEAP initiates two new BMP projects in oil palm
IPNI Program Updates
IPNI SEAP initiates two new BMP projects in oil palm

Advances in Nutrient Intelligence

New staff with Southeast Asia Program, Penang

News From the Region


Cooperation lifts rice profits in the Mekong Delta

Crop insurance for Philippine rice farmers

Mekong Delta's post-harvest rice losses hit $635 m

Rice breeding brings billions to SE Asia


Vietnam's coffee farms hit by falling berries


Sustainable oil palm hits 1 million ha

IJM Plantations to invest RM 1 billion in Indonesia in next three years

Six companies to invest RM 300 million in Sarawak oil palm estates
IPNI SEAP is initiating with some of its partner plantations and with support from its member companies two new projects in oil palm:
  • NEW! - Best Management Practices for All Growth Stages in Oil Palm, and
  • NEW! - Best Management Practices for Nutrition Management in Oil Palm.
The purpose of both of these projects is to enhance sustainably the yield and profitability of oil palm plantations, facilitate the effective use of production inputs, and improve the soil quality of intensively managed oil palm production systems. There are substantial opportunities to increase yield and profitability on existing land through implementation of Best Management Practice (BMP) in oil palm estates. However, plantations are challenged with the identification and implementation of suitable BMP that would promise greatest triple bottom line gain.

The IPNI Southeast Asia Program has been instrumental in developing a BMP concept that has been successfully evaluated and introduced in several estates. IPNI SEA promotes BMP through collaborative projects in Southeast Asia providing assistance in training, agronomic and economic data analysis. A series of six BMP projects was conducted between 2006 and 2011 with 5 collaborating plantation groups in Indonesia using a whole systems approach in mature oil palm plantations to determine the requirements for achieving maximum economic yield. Maximum economic yield in any mature planting is lower than the maximum potential yield for the site.

The work in the now ending BMP project identified practices that are highly effective in reducing the yield gaps in mature plantations. However, there is still more scope for yield intensification.
Two opportunities have been identified:
  • Sub optimal practices during plantation establishment are uneconomic to correct in mature plantations. The opportunity to correct these exists however during initial plantation establishment and during replanting.
  • Future expansion of oil palm is likely to be on degraded lands, often carrying small amounts of standing biomass. These lands often have low fertility status soils, possibly coupled with water deficits, potentially leading to a substantial yield gaps in mature stands. Improved practices are required to enable managers of plantations in marginal growing environments to increase the efficiency of fertilization practices.

These issues have not been addressed in the now ending set of BMP projects. Consequently, a new set of projects has been conceptualized during the last year and is now implemented in Sumatra, Kalimantan and in Sabah. These two projects address the opportunities to further reduce the yield gap between actual and potential yields in oil palm plantations through the deployment of BMP in the nursery and immature growth stages, as well as through better fertilization management practices.
Advances in Nutrient Intelligence
The IPNI Southeast Asia Program is seeking support from member companies to implement a two year project to develop Nutrient Intelligence (NI). Meetings were held in August in Indonesia, India, and the Philippines to introduce the NI concept and the results of the proof of concept study, and to discuss the plan for a two year project to implement its delivery in Indonesia, India, and the Philippines.

The proposal to acquire funding for a two-year development project was approved and supported by all participants at the meetings. Nutrient Intelligence was considered highly attractive and useful to support policies governing fertilizer subsidy strategies/programs and for the systematic identification of rural and market development opportunities. An illustrative quote by one meeting participant was: “This [NI] is like old wine that finally has been filled into very good and very useful new bottles”. All meeting participants agreed that the proposed NI delivery initiative should eventually become self-funding after the two year development project. Essentially, recipients of NI would be asked to pay for its use and thereby enable ongoing generation and delivery of it.

Dr. Thomas Oberthür, Director, Southeast Asia Program, commented: “The meetings were also useful to obtain different perspectives as to stakeholders’ participation and funding scenarios. Frequently raised aspects included those of data security, data access, cost-benefit ratios of NI, and data management infrastructure. Indeed, the purpose of the proposed two year development project is to clarify the nature of these aspects in order to establish the elements for a self-funded initiative on delivering NI to its users.”

Nutrient Intelligence is a data-driven process that can be applied to any production system for which there is a reasonable set of trial data. IPNI envisions Nutrient Intelligence as a tool that incorporates constant learning and feedback in which changes in management are fed back into the system, and re-assessed. In this model, IPNI functions as data manager, analyst, facilitator and knowledge broker. Regular dialogues with stakeholders are crucial to enrich and check interpretations and to identify further data acquisition, where this is feasible.
New staff with Southeast Asia Program, Penang
Please join us in welcoming Ms. Siao Lee Hung, our new Administration Executive from 19 September 2011. Siao Lee completed her Advanced Diploma in Business Management with the Association of Business Executives, United Kingdom in the year 2000. After completion of her studies, she worked as a Secretary for various companies including a non-profit organization, The Worldfish Center. She was with Worldfish for 2½ years and moved on to the Center for Chemical Biology of University Sains Malaysia (USM). During her tenure in USM as an International Research Coordinator, Siao Lee worked with international and local collaborators in preparation and implementation of research projects, Foreign Visitor exchange program, and seeking funding opportunities.

She is now assisting the Operations Manager in office administration, accounting and publications in the IPNI Southeast Asia Program. Siao Lee can be contacted by phone at + 60 4 6202 283 or by e-mail at slhung@ipni.net.
News from the Region
Cooperation lifts rice profits in the Mekong Delta
Rice farmers in the south of Vietnam have earned high profits under a pilot program launched in March by the Ministry of Agriculture and Rural Development (MARD). For the last summer-autumn rice crop, farmers earned an additional profit of VND 2-3 million (US$98-145) per ha. Under the program, farmers whose fields are adjacent to each other coordinate the planting of rice and use advanced production techniques. The farmers plant their rice at the same time and use seeds and other services provided by sponsoring companies taking part in the program.

The program began in March with a model project in An Giang Province and has expanded to several dozen rice fields of 100 to 2,000 ha each in southeastern Tay Ninh Province, Can Tho City and 12 Cuu Long (Mekong) Delta provinces. Pham Van Du, deputy head of MARD's Plant Cultivation Department, said 6,400 farming households with a total of 7,800 ha were participating in the program. The production cost of one kilo of rice fell by VND 120-130 a kg, compared to costs when the farmers worked independently and were not part of the program.

In Dong Thap Province, for example, farmers with an average output of 6 tons per ha earned a profit of VND 16-18 million ($780-880) per ha in the last summer-autumn rice crop, VND 2.5 million ($120) per ha more compared to farmers not taking part in the program. As part of the program, farmers are given instruction in planting techniques, offered interest-free loans to buy fertilizer and pesticides, and offered higher prices for rice that is high quality and clean.

Although the program has been successful and will be expanded to 1 million ha in the future, not all of the farmers have had similar success. Huynh Van Thon, general director of the An Giang Plant Protection Company, which launched the first model rice field in An Giang Province, said some farmers wanted to sell freshly harvested paddy at rice fields. This has created pressure on purchasing companies which must dry paddy and transport it from the fields. Bui Ba Bong, deputy minister of MARD, said cooperation among farmers and companies must be improved to solve these problems.

The ministry has issued criteria for developing large-scale rice fields, which will be implemented for the 2011-12 winter-spring crop. The ministry targets developing large-scale rice fields in the south to 20,000 ha for the 2011-12 winter-spring crop and to 100,000 ha in 2013. After 2013, it will be expanded to one million hectares.

Source: Vietnam News, Aug. 27, 2011 http://vietnamnews.vnagency.com.vn
Crop insurance set for Philippine rice farmers
Negros Occidental province and the Agriculture Department are implementing a P180-million (US$ 4.1 million) crop insurance cover for about 10,000 rice farmers. The joint undertaking called Negros First Universal Crop Insurance Program is under the Philippine Crop Insurance Corp.

“This is one of the actual result of our effort to maximize and spread the availability of crop insurance to our farmers. An erratic cropping season caused by progressing climate change makes our farmers vulnerable to production losses,” said Corp Insurance President Jovy Bernabe.

Agriculture Secretary Proceso Alcala and Negros Occidental Gov. Alfredo Marañon Jr. distributed policies to 1,500 farmers last month.

According to Bernabe, each farmer is guaranteed up to P17,680 (US$ 400) per hectare in insurance claims if the crop is totally destroyed or lost due to pest infestation, plant disease or natural calamities. Under the program, the provincial capitol agreed to shoulder P500 of the insurance premium worth P840 per hectare per cropping. The balance of P340 is paid by the farmer. Almost 60% of the premium for crop insurance is subsidized to make the program affordable.

Source: The Manila Standard Today, Sept. 7, 2011, http://www.manilastandardtoday.com
Mekong Delta's post-harvest rice losses hit $635 m
The post-harvest loss of rice in the Cuu Long (Mekong) Delta remains high, at 13.7%, or US$635 million for the year, according to the deputy director of the Institute of Agriculture Engineering and Post Harvest Technology.

Speaking at a conference in Can Tho City on preserving rice after harvesting in the Delta, Dr Pham Van Tan said most losses occurred during the drying process, with the highest rate of 4.2%. That was followed by harvesting with 3%; husking with 3%; storage with 2.6%; and transportation with 0.9%. Post-harvest losses could rise to 20.6%, he said, adding that the loss rate of by-products of rice has reached 50%.

The quality of rice after post-harvest has also deteriorated. Most Vietnamese-grown rice is low-grade and has an export price of US$80-100 per ton lower than that of Thailand and the US. The Delta has about 5,000 combine harvest machines that can serve only 30% of the Delta's total rice cultivation area. To reduce post-harvest losses and increase rice value, participants at the conference said modern rice silos should be used. These silos can inspect the quality of rice, clean and dry rice, and monitor the temperature of rice during the storage period. They would ensure that the quality of rice would be maintained over a long period.

The Delta produces about 20 million tons of paddy a year, accounting for nearly half of the country's total rice output. However, its storage systems have only a total capacity of about 2 million tons, according to the Ministry of Agriculture and Rural Development.

Source: Vietnam News, July 5, 2011, http://vietnamnews.vnagency.com.vn
Rice breeding brings billions to SE Asia
Southeast Asian rice farmers are harvesting an extra US$1.46 billion worth of rice a year as a result of rice breeding - the science that brings new rice varieties to farmers - by the International Rice Research Institute (IRRI), according to a new Australian report.

The Australian Centre for International Agricultural Research (ACIAR) assessed the impact of IRRI’s research on improving rice varietal yield between 1985 and 2009 and found a boost in rice yield by up to 13%. “This means farmers are now harvesting more rice per hectare, which not only lifts them out of poverty, but it is contributing towards the world-wide challenge of feeding the estimated global population of 9 billion people in 2050,” said Australian Minister for Foreign Affairs Kevin Rudd. “Ensuring an ample and affordable supply of Asia’s staple crop is critical to reducing poverty and increasing regional stability," he added.

The assessment also showed that IRRI’s improved rice varieties increased farmers’ returns by US$127 a hectare in southern Vietnam, $76 a hectare in Indonesia, and $52 a hectare in the Philippines.

Dr. Robert Zeigler, director general of IRRI, placed the magnitude of this impact in context. “The annual impact of IRRI’s research in these three countries alone exceeded IRRI’s total budget since it was founded in 1960,” Dr. Zeigler said.

IRRI is a global leader in rice science that has helped to avert famine, lift people out of poverty, and save millions of hectares of natural ecosystems from being turned into farmland. “For national governments, philanthropists, and even just your average person on the street who wants to make a difference in people’s lives, then it’s worth considering donating to rice research,” said Dr. Zeigler.

ACIAR’s Impact Assessment Research Program Manager Dr. Deborah Templeton said that, apart from improved varieties, other IRRI activities not included in the study are likely to produce further significant benefits. “Other benefits include improvements in eating quality and resistance to pests and diseases,” said Dr. Templeton.

In 2010, the Australian Government contributed AUS$15.4 million towards the construction of a new, state-of-the-art Plant Growth Centre and upgrades to IRRI’s experimental farm in the Philippines. These new facilities are enhancing IRRI’s capacity to increase rice yields against a backdrop of agricultural production pressures and a growing global population.

“IRRI’s high levels of return on investment, as found by the ACIAR study, shows how Australians can really make a difference by effectively targeting our aid dollars,” Mr. Rudd added.

Source: IRRI Rice News, 29 September 2011, http://irri.org/news-events/media-releases
Vietnam's coffee farms hit by falling berries
More than 60,000 ha of coffee plantations in the Central Highland province of Dak Nong have been hit by early falling berries over the past month, leaving local farmers hundreds of billions of dong out of pocket. Around 30 to 40% of berries have fallen, and the harvest is likely to be thousands of tons less than expected. Local farmers have tried a number of methods to stem the tide, but to no avail.

Nguyen Bao Hai, a farmer from Duc Minh Commune, Dak Mil District planted 2.5 ha of coffee and expected to harvest five tons per hectare. However, he too detected the disease on his farm two weeks ago. "The coffee berries also fell in previous years, but the number was small, this year too many have fallen," said Hai. Hai sprayed plant protection substances on his crop but they had little effect.

Experts from the district's Department of Agriculture and Rural Development said one of the reasons for the issue was that fertilizer prices had recently increased, so farmers were using it sparingly. The trees were also being attacked by pseudococcus, a type of mealy bug, and on top of that, there had been more rain than in previous years, which combined with the high humidity, had made the berries' stalks rotten.

Dak Mil District has the highest coffee area and productivity in the province, with more than 18,000 ha and productivity of 2.3-2.8 tons per hectare. Trinh Nguyen Vu, branch director of the Dong Xanh Co Ltd in the district, said that the coffee farms had been hit by anthracnose whose scientific name is Coletotricum. The disease spreads quickly on the wind in high humidity. It appeared in the province a month ago but local farmers did not discover it in time and it spread.

The Dak Nong Plant Protection Department asked district plant protection stations to help local farmers' associations to apply proper measures to treat the disease. In the first stage, experts should advise farmers to put down enough fertilizer and spray plant protection substances to limit the number of falling berries.

Source: Vietnam News, July 30, 2011, http://vietnamnews.vnagency.com.vn
Sustainable oil palm hits 1 million ha
The palm oil industry has hit the first million ha of certified production area with the certification of the mills and supply base of Agropalma in South America.

According to Roundtable on Sustainable Palm Oil (RSPO) secretary-general Darrerl Webber in a news release, Agropalma’s certification marked the inaugural certification of sustainable palm oil in Brazil. “With the certification of Agropalma, the global production of certification of sustainable palm oil now boasts close to five million tonnes, representing a rapidly increasing volume of 10% of global palm oil production,” he said.

Source: The Star Online, August 27, 2011, http://biz.thestar.com.my
IJM Plantations to invest RM 1 billion in Indonesia in next three years
IJM Plantations Bhd will be investing RM 1 billion (US$ 300 million) in oil palm plantations in Indonesia over the next three years. IJM Plantations expects to invest between RM 300 million and RM 400 million in its current year ending March 31, 2012 and RM 200 million in the following two years. It has identified three sites in east Kalimantan and one in Sumatra.

“Our Indonesian field work is progressing well and it will eventually overtake our business in Sabah,” chief executive and managing director Joseph Tek Choon Yee said at a briefing after the company's AGM yesterday. IJM Plantations has already planted on 13,606 ha in Indonesia since venturing there in 2009. Locally, it has 25,444 ha of oil palm plantations in Sandakan, Sabah. Its goal is to secure between 30,000 and 40,000 ha in Indonesia, making the company's total land-bank equivalent to the size of Singapore.

“We are looking to plant about 35,000 ha there in the next three years. If there are any land opportunities adjacent to the ones we have secured, we will further acquire to form a synergy there,” Tek said. “The commodity's (palm oil) price has also been kind to us. We believe that the average price of RM 3,000 a ton this year is fair,” chief financial officer and executive director Puru Kumaran said.

Puru said the contribution from the Indonesian plantations would kick in substantially from 2014 onwards. For the year ended March 31, 2011, IJM recorded a net profit of RM 147.2 million (US$ 46 million) compared with RM 79.5 million (US$ 25 million) a year earlier. Its pre-tax profit of RM 196 million (US$ 61 million) for FY11 was the highest in 26 years.

Source: The Star Online, August 23, 2011, http://biz.thestar.com.my
Six companies to invest RM 300 million in Sarawak oil palm estates
Six plantation companies, including one from Peninsular Malaysia, are expected to invest over RM300 million (US$ 94 million) to open up some 33,200 ha of native customary rights (NCR) land in Sarawak for oil palm development.

The six Palmraya Plantation Sdn Bhd, Sarikei Oil Palm Plantation Sdn Bhd, Millionmore Sdn Bhd, Karisma Tradisi Sdn Bhd, Cita Global Agro Sdn Bhd and Dynamic Jutamas Sdn Bhd signed memorandums of understanding (MoUs) with the NCR landowners and the state-owned Land Custody and Development Authority (Pelita) to jointly develop the land in different parts of the state.

Sarawak Land Development Minister Tan Sri Dr James Masing witnessed the event here.

The plantation companies, which will each hold 60% equity in the joint ventures (JVs), will provide the capital for the plantation development. The NCR landowners co-own 30% and Pelita the remaining 10% in the JVs. Pelita is the project managing agent to protect the interests of the landowners.

Peninsula-based Karisma Tradisi was allocated 15,377 ha, the biggest among the six companies, in several areas in Marudi District in Miri Division. Palmraya Plantation will develop 8,514 ha in Selangau, Oya and Dalat districts in Sibu and Mukah Divisions. Dynamic Jutamas was given 4,896 ha in Lubuk Antu District in Sri Aman Division while Sarikei Oil Palm was allocated 2,665 ha in Sarikei district. Cita Global's project involves 929 ha in Samarahan Division while Millionmore's project covers 815 ha in Tatau District in Bintulu Division.

Pelita Holdings Sdn Bhd chief executive officer Abdullah Chek Sahamat said Pelita had been involved in the JV development of NCR land with private investors since 1996. “Pelita has been tasked with the development of about 300,000 ha NCR land. We have so far developed some 58,000 ha into oil palm estates. “We have brought in about RM600 mil investment from private investors,” he added.

Abdullah, also Pelita general manager, said the authority was now managing 31 JV oil palm plantations, adding that some RM30 mil had been paid out as dividends to the participating landowners over the years.

Pelita has helped to create a land bank of about 75,000 ha. Sarawak has an estimated 1.5 million ha of NCR land, which is largely idle or under-utilized. Abdullah said three or four more similar MoUs were expected to be signed soon by other plantation firms and NCR landowners.

Dr Masing said the state government had approved nearly 330,000 ha NCR land for oil palm development, adding that the development cost for one hectare was between RM 10,000 and RM 12,000, depending on the terrain.

Sarawak, according to Dr Masing, has almost one million hectares of oil palm plantation.

Source: The Malaysia Star Online, Sept. 22, 2011, http://biz.thestar.com.my
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