Patchouli Aceh. Aceh Economic Development Financing Facility (AEDFF) CARITAS CZECH REPUBLIC INDONESIA. March 2011 Volume 1

Transcription

1 Patchouli Aceh Aceh Economic Development Financing Facility (AEDFF) March 2011 Volume 1 CARITAS CZECH REPUBLIC INDONESIA THIS BROCHURE IS PRODUCED BY CARITAS CZECH REPUBLIC Any complaints regarding the project or the content of this brochure should be addressed to: , or download a complaint form at

2 A World-Class Scent: Patchouli Oil from Aceh CARITAS CZECH REPUBLIC is supporting patchouli growers in four districts across Aceh as part of efforts to reduce poverty through the Aceh Economic Development Financing Facility (AEDFF), funded by the Multi Donor Fund for Aceh and Nias (MDF). The goal of this project is to develop the economy of Aceh communities through the improvement of the patchouli industry. The project focuses on four strategic methods: 1) improving agricultural methodology, 2) improving production, 3) developing the cooperatives and 4) establishing links to international and domestic buyers. The project targets to benefit 2,500 farmers from the four districts and four primary cooperatives. Improving Agricultural Methodology Growers across Aceh use a combination of methods to grow patchouli. These methods vary from slash and burn practices to intensive cultivation. In most cases across the Province, the methods used do not maximize output, effectively utilize inputs or protect the environment for long-term sustainability. Simple changes can be introduced through education that will result in larger yields of patchouli leaves from better quality plants. This project will introduce these changes hand-in-hand with organic methodologies that will protect communities from harmful chemicals or soil depletion from overuse. Farmer Field School (FFS): Training of Trainers for 44 participants; coaching 2,500 targeted farmers from 4 sub-districts through 16 sessions of FFS; accompaniment of farmers; monitoring and evaluation of the proper application of lessons learned 2

3 Improving Production Methodology Most growers across Aceh use traditional distillation units made of iron that produce patchouli oil through the consumption of wood. These traditional iron units produce a lower grade of patchouli oil with a lower concentration of patchouli alcohol. Due to the low concentration of alcohol and chemical contamination from the iron units, the resulting low-quality oil cannot demand a premium price. This project will introduce improved distillation technology through the use of rust-free stainless steel units combined with intensive training in their use and maintenance. The project will distribute stainless steel distillery units across Aceh that will give growers the opportunity to produce higher quality oil on a local level using the energy source that makes the most sense in terms of cost, sustainability and environmental protection. Provision of 30 stainless steel distillery units with 100-kg capacity each; provision of 4 distillery units at Patchouli/ Nilam Business Centers (NBC) with 300-kg capacity each; provision of distillation training, oil quality control training, leaf quality training and quality control at the NBC Developing Cooperatives This project will link cooperatives of patchouli growers directly to buyers. A part of the patchouli grown will be sold to international buyers at a higher price, allowing the cooperatives to stabilize the price offered to the growers. The cooperatives will also serve as the base of a revolving capital fund. Caritas Czech Republic has already signed a Memorandum of Understanding with the French fragrance company Payan Bertrand (PB) to buy 7.5 MT of high grade patchouli oil from the cooperatives established by the project per year, representing its first direct international buyer. 3

4 Establishing Links to International and Domestic Buyers To reach buyers CCR will: conduct marketing studies, prepare training on entrepreneurship and marketing, develop a website, invite international trade journalists to visit Aceh, and present Aceh s patchouli at conferences and trade shows. Time Frame Of The Project OCTOBER 2010 Contract Signed Field Work Begins DECEMBER 2010 MARCH - APRIL Patchouli is planted NBCs are constructed MAY 2012 Distillation begins; Cooperatives are selling to patchouli buyers 4

5 Map Of Project Locations In Aceh Province LEGEND ACEH JAYA DISTRICT No of Sub-Districts: 1 No of Beneficiaries: 416 HH Size of Land: 104 Ha ACEH BARAT DISTRICT No of Sub-Districts: 1 No of Beneficiaries: 416 HH Size of Land: 104 Ha ACEH SELATAN DISTRICT No of Sub-Districts: 2 No of Beneficiaries: 832 HH Size of Land: 208 Ha GAYO LUES DISTRICT No of Sub-Districts: 2 No of Beneficiaries: 836 HH Size of Land: 209 Ha 5

6 General Information about the Area ACEH JAYA The District of Aceh Jaya is well suited for agriculture. Rice, fruit, vegetables, rubber, chocolate, palm oil and patchouli are produced in the district. A large percentage of the land in Aceh Jaya is dedicated to agriculture. The district of Aceh Jaya stretches from the sea to the mountains where patchouli grows in deep jungle. Aceh Jaya also has a strong fishing industry, with fish processing seen as a possible future industry. Aceh Jaya was hard hit in the Tsunami of 2004, and most of the coastal infrastructure has been rebuilt. A new modern highway connects the capital Calang to Banda Aceh, making Aceh Jaya an excellent area for future investment. 6

7 ACEH BARAT Farther down the west coast of Aceh is the district of Aceh Barat. The District is well-known for the production of a number of commodities including: hybrid coconut, rubber, coffee, palm oil, sugar cane, candlenut, cacao, patchouli, turmeric and ginger. The capital city of Meulaboh is one of the largest cities in Aceh, and the area is home to mining and a cultured fishing industry. Following the Tsunami of 2004, a great deal of the infrastructure around Meulaboh has been rebuilt and modernized. 7

8 ACEH SELATAN On the south west coast is the District of Aceh Selatan, seen as Aceh s capital for production of patchouli and nutmeg. Aceh Selatan is a district known to international traders around the world for the quality of these commodities. Patchouli growing is one of the main occupations of growers in Aceh Selatan. Local government in the district is keen to support the growth of foreign and domestic trade. 8

9 GAYO LUES Up in the highlands of Aceh is the beautiful and mountainous district of Gayo Lues. With its own ethnicity, language and climate, Gayo Lues is unique in Aceh. Known for famed Gayo Coffee, the district is also a perfect spot for the cultivation of sweetscented mountain patchouli. Like Aceh Selatan, patchouli cultivation is a major income generation activity of growers in Gayo Lues, and the patchouli oil produced in the highlands is considered to be some of the best in the world. 9

10 Future Projections for Patchouli in Aceh There is a great potential for increasing the amount of patchouli grown and the amount of patchouli oil distilled in Aceh without increasing the risk of environmental damage. This project aims to increase the amount of patchouli available through better and more efficient cultivation practices. Currently, patchouli growers in Aceh increase the volume of patchouli production by expanding the area of plantation. This is not the most efficient way to improve the volume of production and causes damage to the environment. The method also does not guarantee the optimal yield to be obtained because the land that is cleared may or may not be suitable for patchouli cultivation. The area used for patchouli plantations in Aceh has risen and fallen since 1979 (see Chart 1). Between 1999 and 2004 there was a reduction in land use for patchouli cultivation. The subsequent expansion since 2005 is indicative of the effects of the rehabilitation and reconstruction projects that infused the Aceh economy after the 2004 Tsunami. The production volume of patchouli in Aceh follows the same trend as the land clearing (see Chart 2). However, although the production volume and cultivation area have increased since 2005, the productivity of the patchouli sector shows a steady decline (see Chart 3). Roughly interpreted, growers produced more patchouli for the same amount of land in 1979 than thirty years later in 2009 (a kg/ha decline between these two years). Projecting from these trends, if using the 1979 productivity level as a standard, growers in Aceh today should have been able to produce 25 kg more patchouli oil from every one hectare of plantation, or for the 4,246 ha of land dedicated in 2009 for cultivating patchouli. 10

11 Chart 1: Area Used for Patchouli Plantations in Aceh (Ha) 1 Chart 2: Volume of Patchouli Oil Produced in Aceh (Ton) 2 Chart 3: Productivity of Patchouli Oil Production in Aceh (Kg/Ha) 3 (Notes: Trend line) Growers in the entire province of Aceh have missed out on a total of tons of patchouli, which would have been worth approximately USD 5.5 million. 4 This indicates that there is room for improving the production level in Aceh without expanding the plantation area. 1 Badan Pusat Statistik (BPS), BPS, Calculated from Chart 1 and Chart 2. Compiled from BPS data. 4 This figure is calculated based on the 2009 patchouli price presented by Dewan Atsiri Indonesia, or DAI, the Essential Oil Board of Indonesia. 11

12 Patchouli Oil Quality The quality of patchouli oil is determined by the physical and chemical characteristics of the oil. Its quality is mainly measured by the level of patchoulol (patchouli alcohol or PA), which is the largest chemical component of patchouli oil. 5 PA contains norpatchoulene, which gives the patchouli oil a specific odor/scent. 6 The oil from Acehnese patchouli (Pogostemon cablin Benth) in Sumatra is considered to be of a very high quality, as it contains a high level of PA. 7 The PA level of patchouli oil is not the only factor that sets the quality of the oil. The Badan Standarisasi Indonesia (Indonesian Standard Body or BSI) has set several standards of quality for patchouli oil. International buyers also have their own set of standards. The range of grades and prices of patchouli oil manufactured, offered, and promoted to the international market by the exporters in Indonesia is mainly based on the PA level, color and iron content, and the age of the patchouli oil. Most patchouli oil being offered on the market from Indonesia has a PA level of 30% to 36%. The color of patchouli oil varies according to the iron content of the oil. Patchouli oil distilled in traditional iron distilleries is contaminated by iron and usually has a brown color. Oils produced in stainless steel distilleries have no iron content (are iron-free) and have a light yellow color. There are several sub-varieties of the patchouli plant in Aceh. The major ones are Tapaktuan patchouli in South Aceh, Lhokseumawe patchouli (North Aceh), and Sidikalang patchouli (Aceh Tamiang). 8 They each have different physical and chemical characteristics. Tapaktuan patchouli is highly adaptable with a green and slightly purple stem color. Lhokseumawe patchouli is also highly adaptable with a purple stem color. The Sidikalang variety is highly adaptable and has a dark purple stem. The level of PA from these varieties varies: i.e. Tapaktuan ( %), Lhokseumawe ( %) and Sidikalang ( %). 9 5 T.G. Walker, The Structure And Synthesis Of Patchouli Alcohol., Manufacturing Chemist And Aerosol News, p.2. 6 E. Trifilief, Isolation Of The Postulated Precursor of Nor Patchoulenol In Patchouli Leaves, Phytochemistry, no 19, p S. Tekriwal, Naturals in Indonesia, Presentation in IFEAT Conference, Shanghai, October 2009; ICIS News, Patchouli Oil Shows Upward Pricing Pressure in F & F Market, 2nd of June J.T. Yuhono and S. Suhirman, Strategi Peningkatan Redemen Dan Mutu Minyak Dalam Agribisnis Nilam, Perkembangan Teknologi Tanaman Rempah Dan Obat, vol.19, no.1, June 2007, p Yuhono, et al, p

13 Geographic Distinctions Patchouli from the mountain region of Gayo Lues presents a naturally high patchouli alcohol (patchoulol) rate. Gayo Lues patchouli has a significant volume and a sparkling accent that makes it a very fixative oil. Aceh Salatan patchouli is milder and sweeter and has a delicate and balanced scent that comes from a combination of medium altitude and coastal areas. Aceh Barat is known for a lighter patchouli which is grown mainly in low lands. Tests, done with slow and adjusted distillation, have shown a high content of patchoulol, reinforcing the long lasting capability of Aceh Barat s patchouli. High quality patchouli oil has also been identified in Aceh Jaya. As the Caritas Czech Republic project progresses, traceability and distillation control will allow for a deeper understanding on the specificity of this region. 13

14 Caritas Czech Republic CCR is the largest non-governmental provider of social health care in the Czech Republic and is more and more active in delivering foreign humanitarian aid as well. Through the Humanitarian and Development Cooperation Department, CCR coordinates the delivery of foreign aid with partners as part of the Caritas Internationalis network. CCR devotes most of its funds and resources to its work in Indonesia. CCR has been actively involved in Indonesia since In 2005, CCR responded to the devastating Tsunami in Aceh by collecting funds in the Czech Republic and bringing these funds to support the victims of the tragedy. When the initial emergency phase ended, CCR moved its efforts to the development and recovery of livelihood opportunities in Aceh Jaya. CCR supported farmers groups in tsunami and former conflict areas. Livelihood projects are now CCR s core activities and focus both on agriculture and aquaculture activities. Program priority is to support local cooperatives and farmers groups to use appropriate organic methodology and the concept of solidarity to increase incomes and reduce poverty. CCR works hand-in-hand with local authorities to achieve these aims. Currently, CCR works in 4 districts in Aceh and 1 district in West Sumatra. Next to its livelihood projects, CCR participates in emergency relief activities, capacity building of local partners and Disaster Risk Reduction (DRR) activities. 14

15 The Economic Development Financing Facility 10 The Economic Development Financing Facility for Aceh and Nias was established using a US$ 50 million grant from the Multi Donor Fund for Aceh and Nias, which is managed by the World Bank. The facility s overarching goal is to finance programs that could help rebuild the economy in post-tsunami Aceh in a sustainable and equitable fashion. Nearly six years after the tsunami disaster, Aceh is essentially a new province built back better and now running under the management of a capable provincial government. The challenge of reconstruction has now been replaced by the challenge of economic restoration. Reconstruction projects are what have largely kept Aceh s economy afloat over the past five years. With reconstruction now near completion, Aceh s ambition is to have a thriving business environment, a strong private sector and adequate public infrastructure to support the economy. Financial resources, however, are limited and the Economic Development Financing Facility is a way of bringing Aceh closer to reaching its objectives. The facility is managed by the Aceh government, in collaboration with the Ministry for the Development of Disadvantaged Areas, and will finance a series of projects totaling up to $44.5 million using a US$ 50 million grant from the Multi Donor Fund. 10 World Bank, 15

16 Caritas Czech Republic Indonesia Mission Aceh Besar, Aceh, Indonesia Tel/ fax: +62 (0) Website: Caritas Czech Republic (CCR) is an international non-profit, non-governmental organization with its headquarters in the Czech Republic. CCR is a member of the Caritas Internationalis network and is a registered partner of the Ministry of Social Affairs in Indonesia. 16