Indonesian village no longer grape paradise

Indonesian village no longer grape paradise

Wednesday, November 6, 2013 – 10:27

The Jakarta Post/Asia News Network

INDONESIA – Two decades ago, I Nyoman Mudita was one of the most prolific grape farmers in Banjar Tegeha village in Banjar district, some two kilometers northwest of Singaraja, the capital of Buleleng regency in north Bali. It was the time when the village, with its rich volcanic soil, was renowned as Buleleng’s black grape centre, a variety of grape originating from Probolinggo, East Java. In France, this black table grape variety is called “Alphonse Lavallee”.“The views of the black grape vineyards were stunning, stretching from our village in Banjar to Seririt near Lovina Beach, with ripe grapes hanging over each wooden pergola,” Mudita said, reminiscing about his glorious farming days.

Every hectare of vineyard could produce around 20 tons of grapes, fetching a price of Rp 5,000 (S$0.55) per kilogram. This meant, every farmer could earn Rp 100 million each four-month harvest, excluding around Rp 5 million for production and maintenance costs. Grapes were considered “the golden commodity”, he said.

With grape production gradually falling since early 2000, farmers had no other option but to shift to other commodities. The rocketing prices for seeds and fertilizers and extreme weather changes all contributed to the downfall of the vineyard in north Bali.

“Around 90 per cent of grape farmers have already quit. We are now cultivating seasonal plants, which can be sold easily in the market,” he said.

Today, Mudita said, one hectare of vineyard could only produce two tons of grapes, or one-tenth that of previous years.

Limited knowledge of post-harvest handling also contributed to the falling price of black table grapes.

Mudita and other farmers now work on paddy fields. “But if we can get loans or capital from the government, we really want to return to our vineyards,” he said.

With a price of at least Rp 20,000 per kilogram of grapes, a farmer, he said, could cover all production costs.

Today, there are only 20 hectares of vineyards in Banjar and Seririt, compared to 1,000 hectares twenty years ago.

Based on data from Buleleng Agricultural Agency, Buleleng produced 11,907 tons of grapes in 2010. Today, the precise data for grape production is not yet available.

But water shortages, rapid population growth and the consequent increased housing required, alongside limited farming technology, have led to the degradation of soil quality and grape production, so there will be no more wooden pergolas laden with ripe grapes. Those days are over for Buleleng’s grape farmers.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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