1. MINISTRY OF MARINE AFFAIRS AND FISHERIES REPUBLIC OF INDONESIA Delivered in Indonesia – ACIAR Consultation Jakarta, 21 February 2007 Dr. Reza Shah Pahlevi

2. THE ROLE OF AQUACULTURE IN DEVELOPMENT 5-year Revitalization Aquaculture Strategy EXPANSION OF EMPLOYMENT OPPORTUNITIES (PRO-JOB) POVERTY REDUCTION (PRO-POOR) ECONOMIC GROWTH (PRO-GROWTH)

3. Item20012005Growth rate (per year) Production (tonnes)1,076,7502,163,67420.14 % Value (trillion)IDR 12.36IDR 21.4514.85 % Export volume (tonnes)519,415 (2000) 902,358 (2004)16.69 % Export value (trillion)IDR 1.67 (2000) IDR 1.78 (2004)1.67 % Fish farmers (million)2.192.513.43 % Per Capita consumption of fish (kg/capita/year) 22.4722.670.54 %

4. AVERAGE OF FISH FARMER INCOME IN FRESHWATER SECTOR, 2004 NoType of AquacultureFish Farmer income (IDR million per year) 1Ponds17.85 2Cages15.36 3Floating Net Cages20.70 4Paddy Field7.45 5Other freshwater sector16.28

5. AQUACULTURE PRODUCTION AND VALUE 2001 - 2006 *) Temporary data Year Production (tonnes)Value (trillion) 2001 1,076,750IDR 12.36 2002 1,137,153IDR 14.37 2003 1,224,192IDR 16.02 2004 1,468,610IDR 19.27 2005 2,163,674IDR 21.45 2006* 2,414,780IDR 19.96

7. YEARACHIVEMENT 200586 % 2006*98 % *) Temporary data HIGH POSSIBILITY THAT THE PRODUCTION TARGET ON 2011 WILL BE ACHIEVED

8. Note: 2001 – 2006: Production 2007 – 2011: Target

9. AREAPOTENTIAL AREA ( MILLION HA) IN USE (%) FRESHWATER2,2310,1 BRACKISHWATER1,2240 MARICULTURE12,140,01 TOTAL15,5950,11

10. STRENGTHS OF INDONESIAN AQUACULTURE  HIGH BIODIVERSITY  EXTENSIVE AREA  GEOGRAPHY AND CLIMATE  HUMAN RESOURCES HAS POTENTIAL TO BECOME MAJOR WORLD PLAYER

11. 1.ENVIRONMENTAL DEGRADATION 2.SUSTAINABLE DEVELOPMENT 3.FOOD SAFETY (antibiotic residue) 4.GMO 5.ECO LABELING 6.TRACEABILITY AQUACULTURE DEVELOPMENT SHOULD APPLIED CCRF

12. VISION : AQUACULTURE which is COMPETITIVE and SUSTAINABLE as a MAJOR CONTRIBUTOR TO ECONOMIC GROWTH MISSION : 1.Create bussiness opportunities and provide employment 2.Produce high quality fish in an efficient manner 3.Develop an aquaculture sector which is responsible and environmentally friendly

13. 1.Increase foreign exchange earning, fish farmers income, and create employment and business opportunities; 2. Improve nutritional quality of the people diet through the fish consumption; 3. Protect and rehabilitate fisheries resources. Tilapia culture in Freshwater Aquaculture Development Centre in Sukabumi Seaweed Culture

15. 1.Increase aquaculture production for export, with special focus on increasing competitive advantages through the development and application of efficient and environmentally friendly technology; 2.Development of aquaculture production for in-country consumption, with special focus on increasing and strengthening the farming of area-specific (local) commodities and improving community- built ponds; 3.Establishing mechanisms for controlling the use (exploitation) of aquaculture resources, with especial focus on increasing the attention paid towards the conservation of fish and other aquaculture resources. Koi crap farm in West Java Province

16. 1.Mariculture zone 2.Brackishwater zone 3.Freshwater zone Shrimp culture in Banggai – Central Sulawesi Province

17. Well-developed technology spreading to the grass-roots High export market potential High uptake from overseas markets High employment prospects Well-developed technology spreading to the grass-roots High export market potential High uptake from overseas markets High employment prospects SHRIMP/PRAWN (vaname and tiger prawn) SHRIMP/PRAWN (vaname and tiger prawn) SEAWEED (Euchema and Gracilaria) Low fuel requirement Relatively low capital investment Low fuel requirement Relatively low capital investment

18. Well-developed technology spreading to the grass-roots High export market potential High uptake in the domestic market Relatively low capital investment High employment prospects Low fuel requirement GROUPER GOURAMY TILAPIA CATFISH ABALONE MILKFISH ORNAMENTAL FISH PANGASIUS CATFISH

19. RPB up to 2009 Rp 13.41 trillion Government Investment Rp 3.06 trillion Working Capital Rp 10.35 trillion as follows : Rp 9.70 trillion for small and medium enterprises Rp 656 billion for large enterprises Investment Cost Rp. 2.92 trillion Working Capital Rp. 7.43 trillion (1) Rehabilitation of tambak irrigation systems, (2) hatchery improvement, (3) optimisation of fish health & environment laboratories, (4) development of mariculture sites, (5) development of brackish-water sites, (6) development of fresh-water sites, (7) TASK FORCE operations, (8) Service Development Unit (UPP) development, (9) extension by technical staff, (10) stimulation of working capital for hatcheries. Site development and long-lived machinery (aeration paddles, pumps, feed pelleting machines, etc) Seed, feed and chemical inputs

20. Budget Requirements (billion Rp.) NoTarget/Activity2006200720082009Total AGovernment Investment 360.44438.83785.611,479.173,064.05 B Working Capital Requirements (1-5) 1,777.412,278.122,623.803,676.5510,355.88 1APBN National Budget 53.3268.3478.71110.30310.68 2APBD Local Budgets 35.5545.5652.4873.53207.12 3Private Sector 177.74227.81262.38367.651,035.59 4Banking Sector 1,475.251,890.842,177.753,051.548,595.38 5 Other Sources of Finance 35.5545.5652.4873.53207.12 Total (A+B) 2,137.852,716.953,409.415,155.7213,419.93

21. CAPITAL STREGTHENING

22. Financing Requirements (billion Rp.)

23.  Promoting micro, small & medium enterprises, for: (a) providing increased employment; (b) strengthening family business; © reducing poverty  Promoting the involvement larger / big enterprises in processing sector and marketing, specially for export;  Creating conducive condition

24. 1.Development of demonstration units 2.Development of partnership between nucleus and plasm 3.Use National budget as a cash collateral in bank 4.Cooperate with banks to reduce the interest rate for aquaculture business 5.Increase number of training fish farmers 6.Develop for Aquaculture zones 7.Increase promotion and investment opportunities, either for local and international investment 8.Apply national standards 9.Increase the work effectiveness of UPT 10.Increase the role of Local Government in providing financial assistance to farmers from Local Budget Allocations (APBD) 11.Provide incentives for investors 12.Strengthen UPP

25. 1.Developing working partenership with bank institutions 2.Improving budget structure from province to districts / municipalities 3.Promote fish farmers friendly banking rule & regulation

27. 1.Increase in aquaculture production for export (PROPEKAN); 2.Increase in aquaculture production for in-country consumption (PROKSIMAS); 3.Protection and rehabilitation of aquaculture resources (PROLINDA)

28. (1)Infrastructure for Aquaculture Development; (2)Seed Production Systems Development; (3) Production Systems Development ; (4)Fish and Environmental Health Management Systems Development; (5)Aquaculture Business Systems Development; and (6)Administrative and Organizational Systems Development.

30. 1.Aquaculture zone development: (i) Mariculture: seaweed, grouper, abalone, and others; (ii) brackishwater: shrimp, brine shrimp, milkfish, and others; (iii) freshwater: tilapia, pangasius catfish, clarias catfish, gouramy, and others. 2.Improve hatchery quality : (i) strengthening Broodstock Centre capability, (ii) improving broodstock quality, (iii) increasing capacity building of human resources on hatchery management. 3.Guiding and Controlling : Implementing on aquaculture quality through Indonesian National Standard and certification on hatchery and grow-out. 4.Strengthening Infrastructure and Physical Equipment on aquaculture area through manage special budget allocation (DAK).

31.  FIS/2002/111: Culture, capture conflicts: sustaining fish production and livelihoods in Indonesian Reservoirs  FIS/2000/061: Development and delivery of practical disease control programs for small-scale shrimp farmers in Indonesia, Thailand and Australia  FIS/2002/075: Application of PCR for improved shrimp health management in India, Thailand and Indonesia  FIS/2003/027: Planning tools for environmentally sustainable tropical finfish cage culture in Indonesia and northern Australia  FIS/2002/076: Land capability assessment and classification for sustainable pond-based aquaculture systems  FIS/2002/077: Improved hatchery and grow-out technology for marine finfish aquaculture in the Asia-Pacific region  FIS/2005/028: Technical training and capacity building program for the restoration of Tsunami-impacted brackishwater aquaculture ponds in Aceh

32.  ADB PROJECT: SUSTAINABLE AQUACULTURE DEVELOPMENT FOR FOOD SECURITY AND POVERTY REDUCTION (LOAN NEGOTIATION, SIGNED, LOAN AGREEMENT, UNDER PROCESS)  WORLD BANK: FISHERIES REVITALIZATION PROGRAM (UNDER NEGOTIATION PROCESS)