Globalisation and Livelihood Transformations in the Indonesian Seaweed Industry

Langford, Zannie (Ed.) Book Globalisation and Livelihood Transformations in the Indonesian Seaweed Industry Earthscan Food and Agriculture Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Langford, Zannie (Ed.) (2024) : Globalisation and Livelihood Transformations in the Indonesian Seaweed Industry, Earthscan Food and Agriculture, ISBN 978-1-003-82343-8, Routledge, London, https://doi.org/10.4324/9781003183860 This Version is available at: https://hdl.handle.net/10419/290620 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/4.0/ Globalisation and Livelihood Transformations in the Indonesian Seaweed Industry This book explores the rapidly changing seaweed industry in Indonesia, the largest global producer of carrageenan-bearing seaweeds. Seaweed production in Indonesia has grown exponentially over the last twenty years, and rural communities across the country have embraced this new livelihood activity. This book begins with an examination of the global carrageenan seaweed industry, from the global market for carrageenan in processed foods, to the national and regional contexts in Indonesia across which it is farmed, processed, and traded. It then explores the ways that rural communities have reshaped their lives around seaweed production, with chapters on agrarian transformations, negotiations over access to sea space, farmer decision-making in presence of environmental, social, and economic constraints, the role of women and casual labourers in the industry, and the marketing of seaweed through social networks. Based on a multi-disciplinary research initiative, this book demonstrates the interrelatedness of environmental, social, and economic dynamics on seaweed production, processing, and trade, and argues for key policy interventions to support the sustainable development of the industry in the context of climate change. It also provides a lens for understanding and improving the broader processes of sustainable rural development in a rapidly globalising and commercialising world. This book will be of great interest to students and scholars of aquaculture, food systems, agricultural economics, rural studies and sustainable development. Zannie Langford is Research Fellow at the Griffith University Asia Institute and an Honorary Research Fellow in the School of Agriculture and Food Sustainability at the University of Queensland, where she undertook the research for this book. Her current research explores shifts in development financing in Indonesia and the Pacific. She has also undertaken a range of applied research projects focusing on land tenure, global value chains, smallholder agribusiness and rural development financing in Northern Australia, Indonesia and the Pacific. Climate Neutral and Resilient Farming Systems Practical Solutions for Climate Mitigation and Adaptation Edited by Sekhar Udaya Nagothu Sustainable Apple Breeding and Cultivation in Germany Commons-Based Agriculture and Social-Ecological Resilience Hendrik Wolter Food Policy in the United Kingdom An Introduction Martin Caraher, Sinéad Furey and Rebecca Wells Peasants, Capitalism, and the Work of Eric R. Wolf Reviving Critical Agrarian Studies Mark Tilzey, Fraser Sugden, and David Seddon Peasants, Capitalism, and Imperialism in an Age of Politico-Ecological Crisis Mark Tilzey and Fraser Sugden Genome Editing and Global Food Security Molecular Engineering Technologies for Sustainable Agriculture Zeba Khan, Durre Shahwar, and Yasmin Heikal University Engagement with Farming Communities in Africa Community Action Research Platforms Edited by Anthony Egeru, Megan Lindow, and Kay Muir Leresche Earthscan Food and Agriculture For more information about this series, please visit: www.routledge.com/ books/series/ECEFA/ Globalisation and Livelihood Transformations in the Indonesian Seaweed Industry Edited by Zannie Langford LONDON AND NEW YORK First published 2024 by Routledge 4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2024 selection and editorial matter, Zannie Langford; individual chapters, the contributors The right of Zannie Langford to be identified as the author of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. The Open Access version of this book, available at www.taylorfrancis. com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives (CC-BY-NC-ND) 4.0 license. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Langford, Zannie, editor. Title: Globalisation and livelihood transformations in the Indonesian seaweed industry / edited by Zannie Langford. Description: New York : Routledge, 2024. | Includes bibliographical references and index. Identifiers: LCCN 2023035357 (print) | LCCN 2023035358 (ebook) | ISBN 9781032025469 (hardback) | ISBN 9781032025490 (paperback) | ISBN 9781003183860 (ebook) Subjects: LCSH: Marine algae industry—Indonesia. | Marine algae industry—Environmental aspects—Indonesia. | Marine algae industry— Social aspects—Indonesia. | Marine algae industry—Economic aspects—Indonesia. Classification: LCC SH390.5.I5 G46 2024 (print) | LCC SH390.5.I5 (ebook) | DDC 641.6/9809598—dc23/eng/20231107 LC record available at https://lccn.loc.gov/2023035357 LC ebook record available at https://lccn.loc.gov/2023035358 ISBN: 978-1-032-02546-9 (hbk) ISBN: 978-1-032-02549-0 (pbk) ISBN: 978-1-003-18386-0 (ebk) DOI: 10.4324/9781003183860 Typeset in Times New Roman by codeMantra List of figures vii List of tables xi List of contributors xiii Preface: The seaweed expansion xvii ZANNIE LANGFORD Acknowledgements xxiii List of abbreviations xxv Introduction 1 ZANNIE LANGFORD PART I Globalisation and the Indonesian seaweed industry 21 1 The global carrageenan industry 23 JING ZHANG, ZANNIE LANGFORD, AND SCOTT WALDRON 2 The Indonesian seaweed industry 51 SCOTT WALDRON, ZANNIE LANGFORD, SYAMSUL PASARIBU, NUNUNG NURYARTONO, BOEDI JULIANTO, AND IRSYADI SIRADJUDDIN 3 The South Sulawesi seaweed industry 77 RADHIYAH RUHON, SCOTT WALDRON, ZANNIE LANGFORD, ADAM KOMAREK, JING ZHANG, AND EKO RUDDY CAHYADI PART II Livelihood transformations 99 4 Export commodity frontiers and the transformation of village life 101 ZANNIE LANGFORD, RADHIYAH RUHON, ZULUNG ZACH WALYANDRA, AND RISYA ARSYI ARMIS Contents vi Contents 5 From communal access to private ownership: Negotiating rights to the sea 123 ZANNIE LANGFORD, RADHIYAH RUHON, ZULUNG ZACH WALYANDRA, RISYA ARSYI ARMIS, AND IMRAN LAPONG 6 Environmental and socio-economic constraints to marine seaweed farming 150 ZANNIE LANGFORD, RADHIYAH RUHON, ZULUNG ZACH WALYANDRA, IMRAN LAPONG, AND RISYA ARSYI ARMIS 7 Farmer decision-making in the Indonesian seaweed industry 177 ZANNIE LANGFORD, RADHIYAH RUHON, ZULUNG ZACH WALYANDRA, IMRAN LAPONG, AND RISYA ARSYI ARMIS 8 Gendered work and casual labour in the Indonesian seaweed industry 194 ZANNIE LANGFORD, RADHIYAH RUHON, ZULUNG ZACH WALYANDRA, RISYA ARSYI ARMIS, AND IMRAN LAPONG 9 Seaweedmarketing:village-basedtradersasfinancialand market intermediaries 210 ZANNIE LANGFORD, RADHIYAH RUHON, ZULUNG ZACH WALYANDRA, RISYA ARSYI ARMIS, AND IMRAN LAPONG Conclusion 227 ZANNIE LANGFORD Appendix 1 Reconciling Indonesian seaweed industry statistics from different sources 239 ZANNIE LANGFORD, RADHIYAH RUHON, AND SCOTT WALDRON Appendix 2 Indonesian seaweed-related policies 251 FIKRI FIRMANSYAH SJAHRUDDIN, YANTI N. MUFLIKH, SCOTT WALDRON, AND RISTI PERMANI Appendix 3 Institutions in the Indonesian seaweed industry 265 FIKRI FIRMANSYAH SJAHRUDDIN, YANTI N. MUFLIKH, SCOTT WALDRON, AND RISTI PERMANI Appendix 4 Companies in the Indonesian carrageen processing sector 268 IRSYADI SIRADJUDDIN AND BOEDI JULIANTO Index 271 Figures I.1 Global seaweed production from farming and wild harvesting 2 I.2 Global marine seaweed production by end use 3 I.3 Global carrageenan seaweed production 4 I.4 Current and planned seaweed production in Indonesia 5 I.5 Location of Pitu Sunggu village within Indonesia 9 1.1 Major hydrocolloids by market share and market value 24 1.2 Projected growth in hydrocolloid market value 27 1.3 Applications of carrageenan (market share by volume) 28 1.4 Changing trends in global carrageenan application by sector, 1999–2019 29 1.5 Top 10 carrageenan importers by volume in 1990, 1995, 2000, 2005, 2010, 2015, and 2020 31 1.6 Indonesia carrageenan seaweed export to the world by value, volume, and average price 41 1.7 The Philippines carrageenan seaweed export to the world by value, quantity, and average price 42 1.8 The major global trade networks of carrageenan seaweed in 2021 42 1.9 The major global trade networks of carrageenan in 2021 43 1.10 Carrageenan seaweed import by China in trade value 44 1.11 Export of carrageenan from various countries by trade value 45 1.12 Average monthly unit values of carrageenan exports from selected countries, 2017–23 45 2.1 A count of government policies relevant to the Indonesian seaweed industry, 1999–2022 53 2.2 Volumes of marine seaweed produced for sale across Indonesia in 2020 58 2.3 Nominal seaweed prices in seven locations in Indonesia, 2011–23 61 2.4 Location of major Indonesian carrageenan processors 67 3.1 Annual dried seaweed exports 1960–1976 from four major ports in Indonesia 78 3.2 South Sulawesi carrageenan seaweed supply chain 80 3.3 Seaweed production volume, area, and number of marine farming households in South Sulawesi 83 xiv Contributors Imran Lapong worked as a Junior Scientific Officer on the Partnership for Australia-Indonesia Research Commodities group project on which this research is based from August 2021–December 2022. He holds a Bachelor of Marine Science from Hasanuddin University, Indonesia, and a Master’s degree from James Cook University, Australia. YantiN.Muflikhis a Faculty Member of the Department of Agribusiness at IPM University (Institut Pertanian Bogor), Indonesia. She holds an undergraduate degree from Bogor Agricultural University (1999), a Master’s degree (2008) and a PhD (2021) from the University of Queensland. Her research focuses on analysing value chains in agribusiness products, with a particular interest in systems thinking and dynamics. She has published papers in Agricultural Systems and the Journal of Agribusiness in Developing and Emerging Economies. Nunung Nuryartono is outgoing Dean of the Faculty of Economics and Management at IPB University (Institut Pertanian Bogor), Indonesia, and currently Deputy for Coordination of Social Welfare Improvement at the Coordinating Ministry for Human Development and Cultural Affairs, Indonesia. His areas of expertise include development economics, and public policy. Nunung is a Senior Fellow in the Partnership for Australia-Indonesia Research where he coleads the Commodities Domain. Syamsul Pasaribu is a Faculty Member of the Department of Economics, at IPB University, Indonesia, where he is also an Executive Secretary at the International Center for Applied Finance and Economics (InterCAFE). His main areas of research interest are development economics, labour economics and financial economics. Risti Permani is a Senior Lecturer in Agribusiness at the School of Agriculture and Food Sustainability at the University of Queensland with extensive research experience in Indonesian and Australian agricultural trade, value chains and policies. She is a co-founder of AgLive Indonesia and currently serves as a member of the Board of Directors at the Centre for Indonesian Policy Studies (CIPS). Radhiyah Ruhon worked as a Junior Scientific Officer on the Partnership for Australia-Indonesia Research Commodities group project on which this research is based from August 2021–December 2022. She holds a Bachelor of Biological Science from Universitas Hasanuddin, Indonesia. Her Master’s degree, majoring in Marine Biology, was undertaken at the University of Western Australia, in which she worked on coastal carbon study. Irsyadi Siradjuddin is a Lecturer in Urban and Regional Planning at Universitas Islam Negeri Alauddin, Indonesia, and part of the JaSuDa team. He earned his Bachelor’s degree from IPB University (Institut Pertanian Bogor), Indonesia, and his Master’s degree at Universitas Hasanuddin, Indonesia. He is currently pursuing a PhD in Earth and Environmental Technology at Universitas Hasanuddin. His interests include rural economics and agropolitan development. He also has experience in seaweed research and development. Contributors xv Fikri Firmansyah Sjahruddin is a PhD candidate at the University of Queensland, focusing on sustainable coral reef fisheries management. Prior to starting his current studies, Fikri has been extensively involved in marine conservation in Indonesia. His career in this field began when he worked for the Fauna & Flora International Aceh Program and the World Wide Fund for NatureIndonesia. Scott Waldron is an Associate Professor in Agricultural Economics at the School of Agriculture and Food Sustainability at the University of Queensland. Scott teaches on agricultural development, policy and trade and has conducted twentyfive agricultural development projects in China, Southeast Asia and the Pacific. Scott is a Senior Fellow in the Partnership for Australia-Indonesia Research where he co-leads the Commodities Domain. Zulung Zach Walyandra worked as a Junior Scientific Officer on the Partnership for Australia-Indonesia Research Commodities group project on which this research is based from August 2021–December 2022. He holds a Bachelor of Fisheries from Hasanuddin University, Indonesia, and previously worked as Field Researcher and Program Facilitator for university and non-government organisations. Jing Zhang is an Agricultural Economist with a diverse range of expertise encompassing agricultural policy, natural resource management, farming systems and the international trade. She has a Master’s degree in financial management from Northwest A&F University, China, and a doctorate in agricultural economics from the University of Queensland. She has developed advanced skills in statistical, market and policy analysis, coupled with extensive experience and valuable connections within the Chinese agricultural sector. Preface The seaweed expansion On coastlines across the tropics, a change is taking place. With growing global demand for processed foods, a market has grown for a type of seaweed little known fifty years ago: the eucheumatoid, or ‘carrageenan’ seaweeds. Early each morning, the residents of Pitu Sunggu village in South Sulawesi rise and begin their work of planting and harvesting seaweed. Marine seaweed farming came to Pitu Sunggu less than twenty years ago and has rapidly changed the way that people make their living – it is now the main livelihood in the village, and a source of income for more than 62,000 people across Indonesia. Seaweed farming has driven farmers to claim large areas of previously communal sea space for private use, has pushed incomes higher and has led to the employment of large numbers of casual wage labourers from surrounding villages. These rapid changes have transformed coastal livelihoods dramatically over the past two decades as increasing numbers of Indonesian villages have been incorporated into global seaweed supply chains. However, to understand how this came to be the case, it is necessary to look to where this story begins: 12,000 kilometres away, in the chilly waters off the coast of Ireland. A seaweed grows there, known as carrageen, or Irish Moss.1 Clinging to rocky outcrops, with purplish or reddish-green fan-shaped fronds, it grows wild across the icy coastlines (Davidson 2014, p. 146). For centuries Irish people have visited the shoreline at low tide, and, using a small, sharp knife, taken cuttings of the seaweed for use at home (McMonagle and Morrison 2020, p. 1289). In the Irish town of Donegal, seaweed collectors wander along ‘a tiered ledge of rock that stretch[es] right out into the bay … ankle-deep in swathes of tangle weed’ picking out ‘dark curly tuft[s]’ of carrageen (Connell 2015, p. 47). They take these home and spread them outside to dry, leaving it ‘for several days, day and night, in the rain and dew as well as the sun … [because] carrageen ought to be bland, the flavours of the sea washed away with the rain’ (Connell 2015, p. 49). Irish Moss is used as a folk remedy for the common cold (McMonagle and Morrison 2020, p. 1295, Davidson 2014, p. 146) and is an important ingredient in traditional Irish cooking, where it is used to make jellied milk puddings (O’Connor 2017, p. 118; and see Allen 1977). When boiled in water, it releases a gel known as carrageenan which thickens liquids to a smooth and consistent texture. It is this gel which has become a common ingredient in many processed foods, produced in huge volumes xviii Preface and traded around the world, finding its way into the households of a vast number of consumers globally. Carrageenan derives its name from the Irish name for Irish Moss – carraigı´n (‘little rock’) or carraigeen (‘moss of the rock’) (Mitchell and Guiry 1983). Carrageenan is a hydrocolloid – a compound used to thicken, gel and stabilise processed foods, as well as in other products such as cosmetics and pharmaceuticals. Carrageenan improves the texture and shelf life of processed foods – it stops ice cream from becoming grainy, makes meat products juicier and is used in a range of specialist products such as gluten-free breads, vegan meat analogues and non-dairy milks and cheeses. Carrageenan is now used in a huge range of products, from Ben and Jerry’s ice cream to Campbell’s soups.2 It is prized for the smooth texture it adds to processed foods, and as a vegan alternative to animal derived gelatin. It is most widely used in the meat and dairy industries (Bixler and Porse 2011; Grand View Research 2023) where it is valued for its ability to mimic a ‘fatty’ feeling that consumers enjoy. The uses of carrageenan have been known since the 1800s, but initially it was not widely used because agar, a gel with similar properties extracted from different types of seaweed, could be obtained more cheaply from Japan (Craigie, Cornish and Deveau 2019). Agar became increasingly popular when its use in bacteriology was discovered in 1882, and through the early 1900s it was imported to Europe for scientific purposes, as well as for use in a growing range of prepared foods. However, the supply of agar from Japan was interrupted during World War II. Because of its importance to bacteriology, agar was quickly designated a ‘critical war material’ and it was no longer permitted to be used for purposes other than bacteriological culture (Humm 1947). Industry and government agencies began searching for new sources of agar for bacteriology, and for agar alternatives to replace its use in foods (Humm 1947, p. 317). Carrageenan was a possible alternative, and it was discovered that although agar and carrageenan work in similar ways, the gel produced by carrageenan was superior for many applications. The discovery of many uses of carrageenan in food processing drove a harvesting frenzy across European and Canadian coastlines during the twentieth century. Irish Moss was harvested in increasingly large quantities from the 1940s (Pringle and Mathieson 1987), and by the mid-1960s it had become clear that wild stocks harvested from temperate waters could not support the growing global demand for carrageenan much longer (Craigie, Cornish and Deveau 2019, p. 4). Researchers turned their attention to searching for another type of carrageenan seaweed – one that could be found or farmed in quantities large enough to support the growing global industry. There were several early candidates – Iridaea, for example, grew wild on the coasts of Chile, and Gigartina could be sourced from Spain (Qin 2018). However, wild harvesting of these temperate-water species could not supply large volumes of the product. Eventually, in the 1960s, researchers in the Philippines turned their focus to Kappaphycus alvarezzi (known colloquially as ‘cottonii’) and Eucheuma denticulatum (known colloquially as ‘spinosum’). Thanks to the warm waters, Preface xix abundant sunlight and nutrient rich oceans, these species grew quickly in the tropics and could be found growing wild on reefs and shallow lagoons across Indonesia and the Philippines (Imeson 2009 p. 165). In an interview with the author in 2023, well-known Indonesian seaweed industry professional Iain Neish described his work on an early mission searching for seaweeds containing carrageenan in Eastern Indonesia: My first time in Indonesia was June 1974 when I spent three months in Maluku Utara on a seaweed survey ... At that time, commercial farming of the [carrageenan seaweeds] had not happened yet … So I spent three months on [a] boat ... did about 400 dives … We were focused on searching for the ‘motherload’ of wild seaweed. As the mission progressed, the team learned that these tropical seaweeds did not grow in large beds but in small patches. They did not find large areas where the carrageenan seaweeds could be harvested at scale, instead they noted that the seaweeds were labour intensive to find and gather. It became clear that sailing around searching for wild seaweeds was not a process that would be able to meet the demands of the growing carrageenan industry – what was needed was a way of farming seaweed on a large scale. Efforts to farm seaweed had been underway in the Philippines since 1965 with limited success. Cultivation sites were affected by frequent typhoons, excessive grazing by fish, and management issues, and several sites were abandoned (Neish et al. 2017, p. 5). Poor performance of trial farms saw development programmes underperforming, and many programmes were in danger of being abandoned (Neish et al. 2017, p. 6). Eventually, in the early 1970s, an ideal site was found in the south Philippines, where there were vast areas of shallow coral reefs, clear, flowing waters and large numbers of coastal residents open to new livelihood activities. Farming of the tropical carrageenan seaweeds in significant quantities was achieved for the first time in this location in 1974. The success of the farm trial reverberated through the industry and the Indonesian wild seaweed survey was abandoned. As Neish described: Suddenly we could buy farmed seaweed. The Philippines [had] produced three or four times the annual amount of [wild] seaweed that we were buying from Indonesia and the Philippines [in total]. So basically, it swamped the market … they produced this glut of seaweed [and] the market collapsed because nobody knew what to do with all of [it]. That’s when it was obvious that we should not bother to keep looking for wild seaweed beds … it was basically a futile effort and we should focus on farming. The price of the carrageenan seaweeds crashed as supply suddenly far exceeded demand, and existing supplies were worth next to nothing. However, the price crash was temporary and over the following decades the carrageenan processing industry expanded, supporting a growing seaweed farming industry in the Philippines. xx Preface It took another twelve years for seaweed farming to succeed in Indonesia. As Neish relates: The Danish guy Hans Porse, a stubborn guy … I think his boss kind of told him, ‘Hans, lay off all this seaweed farming in Indonesia’. But Hans kept it going … [and] by 1986, finally, after 12 years of persistent effort, Hans managed to get the seaweed growing in [Bali] … So … he sent out a message to the others … He said, ‘Come to Bali! Finally, it’s working. We have to talk about where-to from here.’ So we all went down there and well, what can I say? It was marvellous to see. Having developed the ability to farm carrageenan seaweed in Indonesia, the Indonesian researchers working on the project sought to establish trial plots across the country. As Neish explained, the Philippines had enjoyed a ‘total monopoly’ on carrageenan seaweed production for the past decade and ‘had basically a cartel of seaweed suppliers’. They ‘knew the middlemen were taking a big cut’, so through the late 1980s worked to establish trial plots across Indonesia in order to open up new sources. By 1990 they managed to successfully farm the seaweed in a number of locations across the country. Through the early 1990s this was supported by carrageenan companies who helped new seaweed farmers to establish plots by providing them with letters of credit, consequently seaweed farmers and processors had close supply relationships. However, in the mid-1990s, the industry underwent a shift. A new, low-cost method for processing the seaweed into a ‘semi-refined’ product was developed, and it suddenly became much cheaper to process seaweed. Carrageenan processors began to increase in number, boosting demand for raw materials (Zhang et al. 2023). With the viability of farming established, and a new, cheaper method for producing carrageenan become available, the 1990s saw an explosion in the number of carrageenan factories. As Neish put it, the industry ‘became a zoo’ and many of the companies who had developed and maintained farm plots left the industry as they were no longer guaranteed their supply. The quantities produced were still low, but with proof-of-concept farms established across Indonesia, and a large, competitive market for the products, by the year 2000 the stage was set for an explosion of seaweed farming. Production took off, and by 2015 Indonesia was producing over ten million tonnes of seaweed per year, making it the largest carrageenan seaweed producer in the world. Within two decades, seaweed went from being a heavily supported and uncertain commodity in Indonesia to being one of its largest aquacultural industries, grown across its diverse coastlines and supporting the livelihoods of over 62,000 coastal households (BPS 2022). Carrageenan seaweed farming has now expanded into tropical coastal regions around the world – to Zanzibar, Tanzania, Madagascar, Papua New Guinea, the Solomon Islands, China, Malaysia, Cambodia and Venezuela – although at least 92 per cent of the global supply still comes from Indonesia and the Philippines.3 With such a rapid expansion, there has been little time to explore this new phenomenon, and for much of the development of the industry ‘speculation flowed Preface xxi freely while the scientific testing of theories and hypotheses attracted little financial support’ (Neish et al. 2017, p. 1). How did the seaweed grow best? Why would it suddenly turn white and die off in huge areas? What was the effect on the coastal environment? How did coastal households adapt and how did it change the work that women and men did, the foods they ate and the way they lived? Who are the entrepreneurs who sprang up overnight to negotiate between farmers and seaweed buyers? What drove the rapid development of seaweed factories across Indonesia and what is their future? And how does the global food market today, driven by consumer preferences, hold the future of tropical coastlines and the thousands of farmers who depend on them for their survival in the balance? This book seeks to understand how this product moves from seaweed farming sites in the shallow shores off a small village on the island of Sulawesi, Indonesia, through the seaweed value chain, through layers of middlemen and processors, exporters, refiners, blenders, food processors and retailers until it finally reaches the kitchens of consumers of perfectly textured food products. We explore how this global value chain is grounded in local places, how it has driven the transformation of coastal spaces and livelihoods and how a shift in consumer preferences could again transform these local places and the livelihoods of the people who depend on them. Notes 1 Irish Moss refers to the species of both Chondus crispus and Mastocarpus stellatus, and ‘Irish harvesters collect both seaweeds indiscriminately as carrageen’ (McMonagle and Morrison 2020, p. 1289). 2 As a Ben and Jerry’s representative explains, ‘We use carrageenan as a stabilizer in our product. The purpose is to bond with water molecules and thereby inhibit the grown of ice crystals as the ice cream freezes. This helps to offer some protection from iciness due to temperature fluctuations during distribution’ (Lindsay Bumps, cited in DiSalvo 2016, n.p.). Campbell’s (2023) explain of their use of carrageenan, ‘We use it to keep our chicken meat juicy’. 3 FAO data (FAO 2023) suggests that 97 per cent of global marine carrageenan seaweed production occurs in Indonesia and the Philippines. However, there are known reporting issues for Indonesia, the Philippines, Malaysia and China hydrocolloid seaweed production data reported to the FAO (Hatch 2023a). If FAO data on global carrageenan seaweed production is adjusted for Indonesia, the Philippines and Malaysia to match Hatch industry estimates (Hatch 2023b), the proportion of global marine carrageenan seaweed production derived from Indonesia and the Philippines is 92 per cent. See Appendix 1 for further information on statistical issues. References Allen, Myrtle. 1977. The Ballymaloe Cookbook. London: Agri-books. Bixler, Harris J. and Hans Porse. 2011. A decade of change in the seaweed hydrocolloids industry. Journal of Applied Phycology 23, 321–335. https://doi.org/10.1007/s10811-010-9529-3 BPS (Badan Pusat Statistik). 2022. Hasil Survei Komoditas Perikanan Potensi Rumput Laut 2021 Seri 2. Badan Pusat Statistic. https://www.bps.go.id/publication/2022/08/29/ 269de33babc6e3d52bbae5b6/hasil-survei-komoditas-perikanan-potensi-rumput-laut2021-seri-2.html xxii Preface Campbell’s. 2023. About our ingredients. https://www.campbellsoup.ca/about-us/whatsinour-food/our-ingredients Accessed 6 January 2023. Connell, Monica. 2015. Gathering Carrageen: A Return to Donegal. Sheffield: Sandstone Press Ltd. Craigie, James S., M. Lynn Cornish and Louis E. Deveau. 2019. Commercialization of Irish Moss aquaculture: the Canadian experience. Botanica Marina 62(5), 411–432. https:// doi-org.ezproxy.library.uq.edu.au/10.1515/bot-2019-0017 Davidson, A. (2014 [1999]). The Oxford Companion to Food, 3rd edition. Edited by Tom Jaine. New York: Oxford University Press. DiSalvo, David. 2016. Dear Ben & Jerry’s, Why is there seaweed in my ice cream? Forbes, 31 August 2016. https://www.forbes.com/sites/daviddisalvo/2016/08/31/dear-ben-jerryswhy-is-there-seaweed-in-my-ice-cream/?sh=143576871d6f Accessed 6 January 2023. FAO (Food and Agriculture Organisation of the United Nations). 2023. FishStatJ (softward for FAO’S Fisheries and Aquaculture statistics). https://www.fao.org/fishery/en/statistics/ software/fishstatj Grand View Research. 2023. Carrageenan: market estimates and trend analysis. Purchased from Grand View Research. Hatch (2023a). Global production overview. https://seaweedinsights.com/global-production Accessed 6 June 2023. Hatch (2023b). Eucheumatoids. https://seaweedinsights.com/global-productioneucheumatoids Accessed 6 June 2023. Humm, H. (1947). Agar – a pre-war Japanese monopoly. Economic Botany 1(3), 317–329. http://www.jstor.com/stable/4251862 Imeson, A. O. 2009. Carrageenan and furcellaran. In Handbook of Hydrocolloids, 2nd edition. Edited by G. O. Phillips and P. A. Williams. 164–185. Cambridge: Woodhead Publishing. McMonagle, Micheal and Morrison, Liam. (2020). The seaweed resources of Ireland: a twenty-first century perspective. Journal of Applied Phycology 32, 1287–1300. https:// doi.org/10.1007/s10811-020-02067-7 Mitchell, M. E. and Michael D. Guiry. 1983. Carrageen: a local habitation or a name? Journal of Ethnopharmacology 9(2), 347–351. https://doi.org/10.1016/0378-8741(83)90043-0 Neish, Iain C., Miguel Sepulveda, Anicia Q. Hurtado and Alan T. Critchley. 2017. Reflections on the commercial development of eucheumatoid seaweed farming. In Tropical Seaweed Farming Trends, Problems and Opportunities: Focus on Eucheuma and Kappaphycus of Commerce. Edited by Anicia Q. Hurtado, Alan T. Critchley and Iain C. Neish. 1–28. Cham, Switzerland: Springer International Publishing. O’Connor, Kaori. 2017. Seaweed: A Global History. London: Reaktion Books. Pringle, J. D. and A. C. Mathieson. 1987. Chondrus crispus Stackhouse. In Case Study of Seven Seaweed Resources. Edited by M. S. Doty, J. F. Cady and B. Santelices. Rome: FAO Fisheries Technical Report 281, pp. 49–122. Qin, Yimin. 2018. Seaweed bioresources. In Bioactive Seaweeds for Food Applications. Edited by Yimin Qin. London: Academic Press. https://doi.org/10.1016/C2016-0-04566-7 Zhang, Jing, Scott Waldron, Zannie Langford, Boedi Julianto, and Adam Martin Komarek. 2023. China’s growing influence in the global carrageenan industry and implications for Indonesia. Journal of Applied Phycology June, 1–22. https://doi.org/10.1007/ s10811-023-03004-0 Acknowledgements This book draws on research undertaken by a team of researchers from the Commodities Domain of the Partnership for Australia Indonesia Research (PAIR). PAIR is an initiative of the Australia-Indonesia Centre (AIC), supported by the Australian government and run in partnership with the Indonesian Ministry of Research and Technology, the Indonesian Ministry of Transport, the South Sulawesi provincial government and many organisations and individuals from communities and industry. The AIC is a bilateral research consortium established in 2014 to advance the people-to-people and institutional links between the two nations in the fields of science, technology, education, innovation and culture (www.ausindcentre.org). AIC and PAIR are comprised of a consortium of eleven universities in Australia and Indonesia, including the University of Queensland (UQ). The authors gratefully acknowledge the support and funding of PAIR, AIC and UQ for the research. We would also like to thank the reviewers of our published work for their observations and insights. Finally, we would like to thank the people who participated in our research, including those from government and industry bodies, but particularly the people of Pitu Sunggu and Laikang villages who generously hosted four of the authors and shared their knowledge and experience. 4 Zannie Langford purchased for a world market price of US$2, a farmer in Indonesia can buy goods worth US$6.03, a farmer in the Philippines goods worth US$5.14, a farmer in Malaysia goods worth US$5.20 and a farmer in Tanzania goods worth US$5.16. This is in contrast with other countries – for example, farmers in Papua New Guinea can purchase goods worth only US$3.02 with income earned from the same quantity of seaweed, and farmers in the Solomon Islands goods worth only US$2.30 (World Bank 2023). This means that seaweed prices may not be high enough to incentivise widespread uptake of the product in areas with lower exchange rate to PPP ratios, although this may change if prices rise over the long term. In Indonesia, seaweed was reported to be a US$2 billion industry in 2021 (FAO 2023). This income is derived mostly from carrageenan seaweeds (79 per cent of national production value), as well as the agar producing species Gracilaria (19 per cent of national production value), small amounts of Sargassum and small volumes of Caulerpa (sea grapes), which are sold for consumption in salads in local markets. Between the years 2000 and 2015, Indonesian carrageenan seaweed production grew from 0.2 to 10.1Mt, before declining again to 7.1Mt in 2021. Despite the recent decline in production, it supports the livelihoods of around 62,000 coastal households (BPS 2022 and see Appendix 1 for a detailed discussion of statistical issues in the seaweed industry). As a result of the importance of seaweed farming to coastal livelihoods, the Government of Indonesia has outlined ambitious plans to further increase seaweed production (Presidential Decree 33–2019), particularly in the Eastern Indonesian provinces of West Papua, Maluku and North Maluku (Figure I.4).5 2 0 4 6 8 10 1975 19801985 1990 1995200020052010201 52 020 Carrageenan Seaweed Production (Mt) Year Indonesia Philippines Malaysia Tanzania (including Zanzibar) Rest of world Figure I.3 Global carrageenan seaweed production Source: Data from FAO (2023). Introduction 5 With such rapid expansion, coastal communities across the country have experienced dramatic changes in the last two decades. Carrageenan seaweeds, although relatively low value, are incredibly shelf-stable – after being harvested, they are sun dried, and when dried properly can be stored for many months before being sold. This makes these seaweeds suitable for cultivation in remote areas, including by farmers who may only have sporadic access to markets. As a result, carrageenan seaweed production has been widely taken up in Indonesia, even in remote areas. Indonesia produces these seaweeds relatively cheaply, and the costcompetitiveness of Indonesian farmers also affects its market share. Many coastal fishermen and farmers have transitioned their livelihood strategy partially or completely into seaweed farming, and as a result have been able to build more elaborate houses, send their children to school and purchase cars and motorbikes (Langford, Turupadang, Oedjoe et al. 2022; Langford, Waldron, Nuryartono et al. 2023). In other areas, communities experienced a seaweed farming ‘boom’ followed by a ‘bust’ resulting from environmental collapse (Steenbergen et al. 2017). The farming of carrageenan seaweed is accompanied by a wide range of social, economic and environmental changes, and systems of livelihoods and community governance have had to change to accommodate this new form of cultivation. However, these livelihoods do not have a certain future: the carrageenan seaweed industry is based on consumer acceptance of the food additive carrageenan, and demand for foods with the properties that carrageenan can impart. Understanding the future of the carrageenan seaweed industry, and how the livelihoods of the farmers who depend on it may be supported, relies on an understanding of the full value chain: from global industry to local activity. Carrageenan value chains: from global to local Descriptive studies of how global value chains are grounded in local places can reveal important insights into how social lives are reorganised around new products (see, e.g., Dixon 2002; Tsing 2015; Weiss et al. 2016; West 2012). Such studies all Figure I.4 Current and planned seaweed production in Indonesia Source: Data from Presidential Decree 33–2019 and FAO (2023). 6 Zannie Langford examine how a raw project is transformed through a value chain to reach the consumer. However, in most cases, the final project is easily recognisable to the consumer. This visibility enables a level of transparency in the supply chain, supporting consumers to develop certain preferences about the types of goods they consume based on a range of criteria. These criteria may include perceptible attributes such as taste, colour and texture, as well as invisible characteristics (of products known as ‘credence goods’) which are not immediately visible, such as being produced according to certain environmental standards (e.g. organic, rainforest alliance certified, biodynamic, sustainably grown, carbon neutral), social standards (e.g. fair-trade, free-range, humane) and safety and quality standards (e.g. BEIC 2023; FSSC 2023). The supply chains for some goods are relatively short and methods for tracking these criteria have been developed – for example, it is possible to buy free-range chicken, grass-fed beef and fair-trade coffee. In each of these cases, it is fairly clear what the product is, and there is some understanding of what production criteria are being met. Carrageenan seaweed is quite different from these products as most people do not realise that they are consuming it. Carrageenan appears on ingredient listings as E407 and E407a in Europe and is found in a wide range of products, but consumers are often not aware they are consuming these products, and as such there is very little transmission of consumer preferences. Carrageenan is a particular type of food additive known as a hydrocolloid: hydromeaning water, and colloid meaning a dispersion of one substance in another substance – such as a gel or emulsion. A hydrocolloid is therefore a substance which, when combined with water, acts as a thickener, gelling agent or stabiliser. Hydrocolloids have long been used in processed foods and are not limited to carrageenan – other common hydrocolloids include gelatin, pectin, guar gum, cellulose gum, xanthum gum, arabic gum, agar, alginate and locust bean gum (Table I.2). These additives each have different properties which mean they can give foods different textures. The most common hydrocolloids are guar gum (made from guar beans), gelatin (produced mainly from cows and pigs), xanthum gum (produced by fermenting sugars from crops such as wheat, corn and soy), cellulose gum (often produced from wood pulp or cotton seeds) and arabic gum (produced from acacia trees). These five hydrocolloids together make up 89 per cent of the global hydrocolloid market. Carrageenan makes up approximately 3 per cent of the hydrocolloid market by volume and 8 per cent by value, and in 2022 the market was worth an estimated US$872 million (Grand View Research 2023a). Carrageenan is particularly widely used in the meat and dairy industries, and as a substitute for gelatin in vegetarian and vegan foods. Because of its specific gelling properties it has been growing in popularity, projected to become a US$1.3 billion dollar market by 2030 (Grand View Research 2023b). Carrageenan is used mostly in the meat and dairy industries, but also in water gels (such as jellies, confectionary and shelf-stable desserts), toothpaste, beer and petfood (Campbell and Hotchkiss 2017). It is often used in blends with other gelling agents to achieve precise textures in processed foods (Blakemore and Harpell 2009; Thomas 1997). Introduction 7 The demand for carrageenan is linked to demand for hydrocolloids in general (e.g., with long-term trends such as increasing global consumption of processed foods) as well as relative demand for carrageenan over competing hydrocolloids. The demand for certain types of hydrocolloids over others is linked to both the properties of specific hydrocolloids and the demand for the products in which they are used. For example, part of the growth of the carrageenan industry is attributable to the growing demand for vegetarian and vegan foods, for which animal-derived gelatin is not suitable. It is also linked to consumer taste and texture preferences, since different hydrocolloids give foods different textures– for example, carrageenan is able to mimic a ‘fatty’ texture which many consumers enjoy and as a result is widely used in meat and dairy products, and, as such, growing demand for meat and dairy products could be expected to bolster demand for carrageenan. The demand for carrageenan is also linked to consumer preferences against certain products. In 2016, the US National Organics Standards Board voted to recommend that carrageenan be removed from the United States Department of Agriculture (USDA) list of organic food additives, as a result of public concern over potential health impacts (NOSB 2016). In the months that followed, Indonesian seaweed farmer and industry groups advocated against this recommendation, on the grounds that it could significantly affect the industry (Mudassir 2018; Dwijayanto 2018). This recommendation was ultimately not adopted because there are limited other options to carrageenan to provide necessary functions in processed foods, and there is a dearth of scientific evidence supporting claims of negative health impacts (USDA 2018). However, if carrageenan were to be rejected by consumers on a large scale, this could have a reverberating effect on the carrageenan seaweed value chains and the villages that grow it. Notably, the scale of this effect would depend on how widespread consumer preferences are: a rejection from consumers in the United States, for example, would have impacts that would be contained if these preferences did not extend to consumers in Asia. Chapter 1 explores these dynamics further. Common sources ~Market share (by volume) Guar gum Guar beans 21% Gelatin Animal collagen, mainly from cows and pigs 20% Xanthum gum Fermentation of sugars (e.g. from wheat, corn, soy) 19% Cellulose gum Wood pulp, cotton seeds 17% Arabic gum Acacia trees 12% Pectin Citrus fruit peels, apples 6% Carrageenan Various seaweeds, primarily Eucheuma and Kappaphycus species 3% Alginates Various brown seaweeds 2% Locust bean Carob tree seeds 1% Agar Various seaweeds, primarily Gracilaria species 1% Source: Data from Grand View Research (2023a) Table I.2 Common hydrocolloids 8 Zannie Langford The development of the carrageenan industry has involved significant amounts of ‘work’ at all levels of the value chain – to establish the physical possibility of seaweed farming, to develop methods for processing it cheaply in large quantities, developing products which use it and maintaining its social acceptability in processed foods. Of particular interest to this book are the thousands of Indonesian farmers who produce it – who have reorganised their social and economic lives around this new commodity, and who depend on the industry for their livelihoods. This book is organised in two parts. Part I traces the carrageenan value chain from the global to the local level. Part II examines the village-level transformations which have taken place to enable the large-scale production of this commodity. The next section describes the methodological approach taken. Background and methods This research was undertaken as part of a research programme known as the ‘Partnership for Australia Indonesia Research’ (PAIR), funded by the Australian Government Department of Foreign Affairs and Trade (DFAT) via the AustraliaIndonesia Centre (AIC). The programme ran from 2019 to 2023 and brought together researchers from four Australian and seven Indonesian universities, as well as industry and government stakeholders including the Indonesian Ministry of Research and Technology (RISTEK-BRIN) and the South Sulawesi Provincial Government (see PAIR 2023). The research was divided into four streams: this book draws on research conducted by the ‘commodities’ research team through a series of interrelated packages of work drawing on a range of different types of data (for published reports on these projects see Abdul Aziz et al. 2023; Cozzolini et al. 2023; Hovey et al. 2023; Komarek et al. 2023; Langford et al. 2021; Langford, Turupadang et al. 2022; Langford Zhang et al. 2022; Langford , Waldron et al. 2023; Langford, Turupadang and Waldron 2023b; Langford et al. 2024; Permani et al. 2023; Stone et al. 2023; Waldron et al. 2022; Zhang et al. 2023). This book is structured as an edited monograph to facilitate contributions from a large cohort of contributors to the research programme. The PAIR programme was established with the support of the South Sulawesi governor and takes this province as its primary location of research. South Sulawesi is the largest seaweed producing province in Indonesia. It is home to the major port of Makassar, which has recently been redeveloped to support much greater volumes of trade and direct export to international locations. Within South Sulawesi, the regencies of Maros, Baru and Pangkajene dan Kepulauan (hereafter ‘Pangkep’) were identified as priority areas for the programme of research. The commodities group was tasked with investigating seaweed production in this region and focused research on the regency of Pangkep due to the large number of seaweed farmers in this area. In this regency, the village of Pitu Sunggu (Figure I.6) was selected as the case study location following a survey of the seaweed production characteristics of villages in mainland Pangkep (see Langford, Waldron, Nuryartono et al. 2023 for full details). A second site was identified for comparison – the village of Laikang in Takalar Regency, an established seaweed growing region which produces the Introduction 9 largest quantities of seaweed in South Sulawesi. This site was chosen to facilitate comparisons with the less substantial seaweed cultivation site of Pitu Sunggu. This book draws primarily on research collected through the main project associated with this programme of research (see Langford, Waldron, Nuryartono et al. 2023), with methods including a structured household survey, 215 semi-structured interviews and 16 months each of ethnographic research by four field researchers. The book also draws on research undertaken through three shorter projects on policy (see Permani et al. 2023), value chain margins (see Komarek et al. 2023) and on farmer resilience in NTT (see Langford, Waldron et al. 2022; Langford, Turupadang, and Waldron 2023). Full details of the methodological approach and findings of these projects can be found in the published reports from these projects, and are summarised in Table I.3. This approach to long-term, in-depth, qualitative social research offers a few key methodological advantages: 1. Long-term social research produces a holistic understanding of seaweed farmer livelihoods Much social research with seaweed farmers is based on short periods of fieldwork, and as such relies on farmers’ reports of their motivations, perceptions and goals. These reports are snapshots in time and vary considerably as the circumstances change. Our research has the benefit of providing a more long-term view of the livelihoods of seaweed farmers over the course of more Figure I.5 Location of Pitu Sunggu village within Indonesia Source: Map created by Alexandra Langford using ARCGis Pro. 10 Zannie Langford Table I.3 Research methods Project component Details Timeline Pilot project Desktop research providing a baseline understanding of the industry (see Nuryartono et al. 2020 for results). July–December 2020 Village survey Survey of village characteristics in coastal villages of Pangkep, and assessment of community willingness to participate in the research (internal reports on each region produced). August 2021 Structured household survey Extended structured survey of 273 seaweed farming households in Pitu Sunggu and Laikang (see Langford et al. 2024 for method and results). October– December 2021 Ethnographic research 16 months of ethnographic research by four of the contributors to this book, two based in each village (R. Ruhon and Z. Z. Wulyandra in Pitu Sunggu, R.A. Armis and I. Lapong in Laikang). They observed and participated in the daily life of seaweed farming communities and recorded their observations in detailed fieldnotes. August 2021– December 2022 Semi-structured interviews 215 semi-structured interviews (in Pitu Sunggu (n = 89), Laikang (n = 82) and NTT (n = 44)), with seaweed farmers, village residents and local government workers. Interviews were undertaken in either Indonesian or local language according to interviewee preference, were transcribed in Indonesian and analysed thematically. January– December 2022 Satellite imagery analysis Satellite imagery for Pitu Sunggu in 2022 was analysed manually (see Langford et al. 2021 for method). January– December 2022 Industry personal communications Extended personal communications with industry stakeholders including collection of information on seaweed sourcing and processing. January 2021– June 2023 Policy document analysis and interviews with government officials A comprehensive investigation into 67 policy documents sourced from both desktop research and interviews with key informants (see Permani et al. 2023 for full methods). April–October 2022 Value chain analysis 34 face-to-face interviews with actors in the value chain, including 5 seedling suppliers, 15 farmers, 12 traders (including 10 village traders, 1 Takalar-level trader and 1 Makassar-based exporter) and 2 processors (see Komarek et al. 2023 for full method). Data from these interviews was assessed using descriptive statistics. June–August 2022 than a year, which allowed observation of changing seasons, as well as farmers’ responses to weather and price events, and variations through different cultural and religious periods. This allowed us to observe the variations in livelihoods that occurs over time – through the wet season of high waves and frequent occurrence of diseases, the transition season in which one by one, farmers stopped Introduction 11 cultivating one species and started cultivating another, through the dry season in which high water temperatures led to outbreaks of epiphytes and poor growth of seaweed and then back to the wet season, when farmers again moved their plots to adjust to the changing weather. This long-term observation meant that field researchers gained a detailed understanding of seaweed farming livelihoods and the strategies that seaweed farmers employ to produce seaweed year-round, despite drastically changing oceanic conditions. It also means that we gained a greater understanding of how seaweed production techniques changed throughout the year, and the interconnected ways that biophysical, social and economic phenomena affect farmer decision-making. 2. Grounded in the technicalities of seaweed production All four of the field researchers hold qualifications in marine sciences, and as such are attentive to the technical details of seaweed production, including the characteristics of the species being grown, the diseases and epiphytes farmers experience, the differences in productive strategies they employ (such as farm plot locations, planting spacings, seedling sizes, yields). This has allowed them to critically engage with farmers’ choices in order to understand how social factors – such as the management of sea space – lead to different production choices (such as rope spacing) and generate different results (such as more intensive use of labour and lower yields by newer entrants to the industry). These insights are invaluable in understanding the factors which contribute to different experiences of seaweed farming livelihoods. Our multi-disciplinary approach allows a more holistic analysis of the interactions between social, economic and environmental dynamics in the villages. The focus on seaweed farmers, rather than more generally on livelihoods, allows a targeted analysis of how this crop is experienced by the people who grow it. 3. Triangulation of multiple perspectives By undertaking research with not only farmers, but also the people they sell to (local traders), the people they employ (seaweed binders, who tie seaweed propagules to ropes) and professionals involved in seaweed industry governance (such as village and provincial government professionals), this study is able to contribute a balanced understanding of the roles of different village actors in the Indonesian seaweed industry. Personal communications were undertaken with a range of industry actors to gain greater insights into the structure of the industry, and focus groups in conjunction with government provided insights into challenges and priorities in the governance of the industry. This provides an in-depth understanding of the various actors involved in negotiating the structure of the Indonesian seaweed industry. Translations and use of gendered language All quotes are translations by the authors from either Indonesian or the local language of the respondent (Makasarese or Buginese). We have endeavoured to reflect the style of speech, emphasis and meaning of the speaker in these translations. In the quotes and discussion of the book, where gendered language reflects the 12 Zannie Langford gendered nature of work involved, this language is used in the translations – for example, all crab netters in Pitu Sunggu are men, so when respondents describe the activities of certain men in crab netting, gendered language is used in the translations. In the chapter exploring the work of local traders, which includes male and female participants, gendered language is avoided to protect the anonymity of the traders involved. Where names of farmers are used, these are pseudonyms. Notes on statistics Indonesian seaweed data is reported by a range of agencies (including the Ministry of Marine Affairs and Fisheries, the Central Bureau of Statistics and the Ministry of Industry) for several production indicators (production volume, export volume, processing volumes, area under production, number of households engaged in production, and number of farmers engaged in production). Attempts to reconcile data from these different sources demonstrate that they rely on very different assumptions and therefore generate vastly different estimates of the size of the seaweed industry. Appendix 1 provides a full outline of data produced by different sources that was consulted in the process of researching this book and demonstrates the inconsistencies between them. This chapter has outlined the features of the global seaweed industry using FAO data. For Indonesia, we have suggested that these are probably overestimated by around 4.8x (see Appendix 1). Indonesia is not the only country to inaccurately report seaweed production statistics to the FAO. Hatch (2023a; 2023b) recently compared industry and production estimates for major seaweed reporting countries and found that data reported by China, Indonesia, the Philippines, and Malaysia were inconsistent.6 They estimated that in 2021, Indonesian carrageenan seaweed production statistics were overestimated by 5.1x, Philippines carrageenan seaweed production statistics by 2.6x and Malaysian seaweed production statistics by 6 times. Unfortunately, they did not estimate the overestimation of Chinese seaweed production. This makes it difficult to reconcile inaccuracies across countries. As such, FAO statistics are used in this chapter despite known inaccuracies, because they highlight the dominance of Indonesia and the Philippines in the carrageenan seaweed industry. Their dominance is so great that even if they were revised down using the overestimation factors provided by Hatch, they would still represent 92 per cent of the global carrageenan industry. As such, the figures provided in this chapter provide a realistic insight into the concentration of carrageenan seaweed production in these two countries. For the remainder of the book, data is used selectively as follows. Chapter 2 relies only on Badan Pusat Statistik (BPS) (Central Bureau of Statistics, Indonesia) (2022) survey data, which as Appendix 1 describes, is realistic. Chapter 3 examines the South Sulawesi seaweed industry and therefore uses data from the South Sulawesi Ministry of Marine Affairs and Fisheries (Kementerian Kelautan dan Perikanan (KKP)), reminding the reader that of this data, household participation data is likely to be realistic, while production volumes and cultivation areas are not (but still demonstrate the geographic distribution of production around the province). Part II of the book focuses mainly on village-level livelihoods and uses BPS (2022) survey data to contextualise these where appropriate. Introduction 13 Structure of the book This book is structured in two parts. Part I provides an overview of the development of the global value chains that have emerged to drive the global carrageenan seaweed industry, while Part II explores the negotiation of these changes at the village level. Readers primarily interested in the global dynamics of carrageenan use and production are advised to start with Part I. Readers who would like to focus more particularly on the village-level changes driven by the industry are advised to read Part II. Part I: The global carrageenan seaweed value chain The first part of the book telescopes down from the global to the provincial level to explore how global carrageenan seaweed value chains are organised at different scales. Chapter 1: The global carrageenan market Chapter 1 explores the long-term drivers of carrageenan demand, production and trade at the international level, demonstrating how the industry has been transformed by decades of sustained growth and development, and the dominance of Indonesia, China and the Philippines within it. Chapter 2: The Indonesian seaweed industry Given the global context and trade patterns outlined in Chapter 1, this chapter examines developments in the Indonesian seaweed industry at the national level. It provides industry-wide context, examines the sectors of production, marketing and processing and then describes some of the cross-cutting issues in zoning, investment, product development and food safety. Chapter 3: The South Sulawesi seaweed industry Chapter 2 explored how Indonesia has worked to support the development of the seaweed industry through investments in production, marketing, processing and research nationally. This chapter looks in more detail at the provincial level, focusing on South Sulawesi Province, outlining key features of the South Sulawesi seaweed industry, including production, trade, processing and export. Part II: Livelihood transformations The second part of the book focuses on one seaweed farming village: Pitu Sunggu, in South Sulawesi, Indonesia, and explores in detail the environmental, social and economic transformations which have taken place to enable the production of this commodity, beginning in the sea, where the seaweed is grown, and moving up to examine changes in social and economic organisation resulting from the industry and systems for marketing the product to the traders and processors who use it. Part I Globalisation and the Indonesian seaweed industry DOI: 10.4324/9781003183860-3 1 The global carrageenan industry Jing Zhang, Zannie Langford, and Scott Waldron Introduction Local-level activity is impacted directly and indirectly by developments at national and global levels. This chapter explores the long-term drivers of carrageenan demand, including the properties of the product, market dynamics, competition and substitution with other hydrocolloids, evolving processing methods, shifting consumption trends, and trade patterns. As a highly globalised industry, the chapter focuses on industry developments at an international level by triangulating detailed trade, industry, and policy data through forensic open-source research in multiple languages, and then telescopes down to national and provincial levels in subsequent chapters. Market demand Market demand for carrageenan and other hydrocolloids is difficult to estimate. This section describes the global hydrocolloid market and draws on market research reports by Grand View Research1 (2023a; 2023b). Major hydrocolloids Seaweeds cultivated for the manufacturing of hydrocolloids such as carrageenan and agar make up a significant proportion of overall global seaweed production, as described in the Introduction. Seaweed inputs, alongside a range of other plant, animal, and microbial sources, are the basis of the broader hydrocolloids market. Different types of hydrocolloids have different properties and prices patterns that make them partial substitutes and competitors in the global hydrochlorides market. Data showing the price and market share of selected hydrochlorides are presented in Figure 1.1. For more detailed analysis of carrageenan prices paid to different value chain actors in Indonesia, see Langford et al. 2022 and Komarek et al. 2023. Market share and specific gelling, thickening, and stabilising applications for the hydrochlorides are shown in Table 1.1. The five most widely used hydrocolloids – guar gum, gelatin, xanthan gum, cellulose gum, and arabic gum account for 89 per cent of the global market volume This chapter has been made available under a CC-BY-NC-ND license 24 Zhang, Langford & Waldron 21% 20%19% 17% 12% 6% 3% 2% 1% 1% 6% 33% 9% 14% 8% 14% 8% 3% 1% 3% $1.14 $6.77 $1.95 $3.34$2.77 $9.82 $11.27 $8.96 $8.56 $21.04 $0 $5 $10 $15 $20 $25 0% 10% 20% 30% 40% Market value ($/kg) Market Share (%) Market share by volume (left axis)Market share by value (left axis)Market Value (USD) (right axis) Figure 1.1 Major hydrocolloids by market share and market value Source: Data from Grand View Research (2023a). and on average sell for $3.20/kg (Figure 1.1). The other five major hydrocolloids represent only 11 per cent of the global market share by volume, but 29 per cent by value, selling for an average price of $10.50/kg. Carrageenan falls into the category of a higher-price, lower-volume hydrocolloid, with a market share by volume of just 2.8 per cent, but a much higher market share by value of 8 per cent. The hydrocolloids extracted from seaweeds, carrageenan, alginates, and agar are some of the most expensive commercially important major hydrocolloids, selling for an average price per kilogram of $11.27, $8.96, and $21.04 respectively. In some applications, these hydrocolloids are used as substitutes for each other, while others are used in blends as complementary goods. As substitutes, guar gum and locust bean gum exhibit similar thickening behaviours (highly shear thinning, high to low shear viscosity) but guar gum is lower-priced and therefore can replace locust bean gum in many applications. Some hydrocolloids are partial substitutes for each other. For example, xanthum gum, locust bean gum, and guar gum are all highly shear thinning, however xanthum gum maintains viscosity at high temperatures and at wide pH ranges, where guar gum and locust bean gum do not. Similarly, agar and carrageenan both form thermoreversible gels on cooling, which means they may behave similarly in some (but not all) applications. Cellulose gum and carrageenan are both used as stabilisers in shampoos, and a range of hydrocolloids are used in lotions. Xanthum gum, cellulose gum, and guar gum are all used in drilling fluids in oil and gas applications, fuelling demand for these products. Many hydrocolloids are complimentary goods in certain applications and are combined in tailored blends to achieve specific thickening, gelling, and stabilising The global carrageenan industry 25 Table 1.1 Common hydrocolloids by source, main uses, market share, average price, and projected growth Common sources Main uses Market share by value Market share by volume Average price (US$) Projected volume growth Gelatin Animal collagen, mainly from cows and pigs Gelling agent in food and beverages, nutraceuticals, healthcare, personal care, photography. Pharmaceuticals such as wound dressings, blood volume substitutes, homeostatic sponges. 33% 20% $6.77 4.8% Cellulose gum Wood pulp, cotton seeds Food and beverages, especially low-fat and frozen foods (e.g. salad dressings, gravies, dairy products, puddings, ice creams, creams, peanut butter, chocolate, frozen desserts, margarine, ketchup). Pharmaceuticals (tablet coatings) Oil drilling Cosmetics and personal care (e.g. toothpaste, shampoo, hair gels, body lotions, shower gels, face creams, ointments). 14% 17% $3.34 3.8% Pectin Citrus fruit peels, apples Food and beverages – thickener in fruit-based products (e.g. jams, fruit fillings, jellies), glazes, milk-based desserts, and stabiliser in fruit juices, acidic protein beverages, dairy products, confectionary. Personal care and cosmetics (e.g. lotions, aftershave creams, and gels). 14% 6% $9.82 8% Xanthan gum Fermentation of sugars (e.g. from wheat, corn, soy) Food and beverages (e.g. toppings, sauces, non-fat milk, dairy, ice cream, soups, gravies, instant beverages, ketchup), often used alongside locust bean gum. Oil and gas industries (e.g. drilling fluids, fracturing fluids, displacement agents). Personal care products (creams, toothpaste, lotions, shampoos, sunscreen, mascara, body washes). Other applications (paints, adhesives). 9% 19% $1.95 6.1% 26 Zhang, Langford & Waldron Arabic gum Acacia trees Food and beverages (e.g. candy coatings, bakery toppings to prevent sugar crystallisation, soft drinks, foaming alcoholic beverages). Pharmaceuticals (e.g. drug suspensions, cough syrups, tablets). 8% 12% $2.77 5.4% Carrageenan Various seaweeds, primarily Eucheuma and Kappaphycus species Food and beverages (especially with dairy) (e.g. ice cream, dairy desserts, dairy beverages, cheeses, dips, sauces, puddings) but also meats, jams, bread, beverages, powdered foods and beverages, tofu, and pet food). Personal care and cosmetics (e.g. toothpaste, lotions, shaving gels, shampoos). Pharmaceuticals to control drug release in microspheres and microcapsules. 8% 3% $11.27 3.8% Guar gum Guar beans Food and beverages (e.g. dairy products, ketchup, fruit juices, cake batters, and pudding powders). Shale and gas industries for hydraulic fracturing. Pharmaceuticals. 6% 21% $1.14 4% Alginates Various brown seaweeds Food and beverages (e.g. instant noodles, ice creams, acid milk drinks, jellies, dressings, beers). Pharmaceuticals (e.g. wound dressings, drug tablets). Cosmetics (e.g. lipstick). Other applications (e.g. animal feed, textile printing, wastewater treatment). 3% 2% $8.96 3.0% Agar Various seaweeds, primarily Gracilaria and Gelidium species Bacteriology Food and beverages (e.g. ice creams, baked desserts, pie fillings, meringues) 3% 1% $21.04 3.7% Locust bean gum Carob tree seeds Food and beverages (e.g. ice cream (prevents formation of ice crystals), baked goods, milk products, frozen dairy desserts, soft cheeses, fruits and juices, alcoholic beverages), often used alongside xanthum gum, also used alongside agar and carrageenan. 1% 1% $8.56 3.9% Source: Data from Grand View Research (2023a). Table 1.1 (Continued) Common sources Main uses Market share by value Market share by volume Average price (US$) Projected volume growth The global carrageenan industry 27 properties. For example, locust bean and xanthum gum are often combined in gels, while carrageenan can be blended with a wide range of other hydrocolloids for use in different applications. For example, it can be used with gelatin to improve food texture and stability (Wang et al. 2015), with agar in food packaging and wound dressings (Rhim 2013; Rhim and Wang 2013), with xanthum gum in jellies (Brenner et al. 2015), and with pectin to form biodegradable composite films (Alves et al. 2010). Xanthum gum can also be used in combination with starch, particularly as a fat replacer and in dairy products (Huc et al. 2014; Matignon, Barey et al. 2014; Matignon, Moulin et al. 2014). The global hydrocolloids market is large and continues to grow. In 2022, Grand View Research (2023a) valued the industry at US$ 11.2 billion and have forecast growth of 4.9 per cent in volume and 6 per cent in value from 2023 to 2030 (Figure 1.2). This growth is driven by a range of factors, including growing demand for processed foods and oil and gas applications. The fastest projected annual growth rate is for pectin (8 per cent CAGR) and xanthan gum (6.1 per cent CAGR). Carrageenan is expected to grow by 3.8 per cent in volume and 5.4 per cent in value, suggesting possible improvements in the grade or quality of carrageenan being produced. Most hydrocolloids (73.5 per cent) are used in the food and beverage industries, with 12.5 per cent used in pharmaceuticals, 7.8 per cent in personal care and cosmetics, and 6.3 per cent in other applications such as oil and gas, textile printing, and construction coatings. This composition is not expected to change dramatically before 2030, with similar growth rates of 4.7–5.7 per cent projected for each of these applications. Although this appears to be a simple and linear market forecast (Figure 1.2). 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Market Value (USD) Gelatin (7.1% CAGR) Cellulose gum (6.5% CAGR) Pectin (6.5% CAGR) Xanthan Gum (5.8% CAGR) Arabic gum (5.6% CAGR) Carrageenan (5.4% CAGR) Guar gum (4.1% CAGR) Alginates (4.2% CAGR) Agar (4.8% CAGR) Locust Bean Gum (4.1% CAGR) Figure 1.2 Projected growth in hydrocolloid market value Source: Data from Grand View Research (2023a). 28 Zhang, Langford & Waldron Applications of carrageenan Carrageenan is the sixth largest hydrocolloid by volume and an industry worth an estimated $872 million in value. The main uses of carrageenan are in the food and beverage industry, which absorbs 77 per cent of global supply (Figure 1.3). Of this, 29 per cent of carrageenan is used in meat products, where it is added as a binding agent to increase water retention and improve texture. Another 18 per cent is used in the dairy industry to bind milk proteins and form a gel at low concentrations. In meat and dairy applications, carrageenan produces a ‘mouthfeel’ which simulates a ‘fatty’ feel (Weenen et al. 2005). As a result, it is often a substitute for fats and is used to thicken low fat dairy products and dairy replacement products. Carrageenan is also used in confectionary production to improve the rheological properties and stability of these products and represents 7 per cent of market use. In addition to uses in foods and beverages, demand for carrageenan is bolstered by the growing demand for health products such as confectionary using alternative sweeteners, which often require special formulations to maintain texture and mouth feel. A further 10 per cent of global supply enters the pharmaceutical industry where carrageenan is used for a range of functions including the control of drug release rate. A further 10 per cent is used in personal care and cosmetics, such as toothpaste, lotions, shaving gels, and shampoos, including many ‘natural’ products as a replacement for synthetic substances. 29%, Meat produc ts 18%, Dairy products 7%, Confectionery 7%, Beverages 6%, Bakery 4%, Sauces and dressings 5%, Other food and beverage 10%, Personal care and cosmetics 10%, Pharmaceutical 3%, Other Figure 1.3 Applications of carrageenan (market share by volume) Source: Data from Grand View Research (2023b). The global carrageenan industry 29 This snapshot of carrageenan usages may be subject to significant change (Figure 1.4). The proportion of carrageenan used in the food and beverage industry increased from 88per cent in 1999 to 91 per cent in 2009 and declined to 74 per cent in 2019. For example, the use of carrageenan in processed meats increased from 34 per cent in 1999 to 41 per cent in 2009 but declined to 28 per cent in 2019. The absolute volume increased by 85 per cent between 1999 and 2009 and plateaued in 2019 at 18,706 tonnes. The use of carrageenan in dairy products declined from 40 per cent to 31 per cent and then to 17 per cent of total carrageenan use in 2019, while absolute volumes plateaued between 2009 and 2019. The use of carrageenan in food and beverages, including bakery, confectionery, sauces and dressings, and beverages, increased from 14 per cent in 1999 to 19 per cent in 2009 and then 29 per cent of the total carrageenan application in 2019, with absolute volume usage almost doubling every decade. This is attributed to advancements in technology and research on the use of carrageenan in food and beverage applications as emulsions, gels, and stabilisers. The growth in the use of carrageenan for personal care and cosmetics and pharmaceuticals (i.e., pill coatings and drug capsules) has been particularly pronounced in the last decade and accounted for 12 per cent and 11 per cent respectively of the total carrageenan use in 2019. Types and grades of carrageenan Three types of carrageenan are widely used in commercial applications: kappacarrageenan (κ-carrageenan), iota-carrageenan (ι-carrageenan), and lambdacarrageenan (λ-carrageenan). These various types of carrageenan have quite different properties and are used in diverse applications (Table 1.2). The most 10000 1850018706 12000 1400011188 4500 8500 19779 1500 2000 8147 7131 2000 2000 2267 0 10000 20000 30000 40000 50000 60000 70000 80000 910290029991 Tons Meat DairyOtherfoodand beverage Personal care andcosmetics Pharmaceutical Others Figure 1.4 Changing trends in global carrageenan application by sector, 1999–2019 Source: Data from ICF (2011) and Grand View Research (2023b). 36 Zhang, Langford & Waldron Table 1.3 Major carrageenan manufactures in China Company name Location Year established Registered capital Company type Main products Annual production capacity of carrageenan BLG (Brilliant) Shanghai 1996 20,000,000 CNY Ltd. (Private Chinese) Carrageenan, konjac gum, agar and blend products for various applications 23,000 tonnes SRC/RC Green Fresh/Green Future Fujian 2007 US$24,490,000 Public limited company (Invested by Hong Kong company) Carrageenan, agar, konjac gum, and their compound products 10,355 tonnes SRC/RC (2022 actual output) Longrun-Newstar Guangxi 2014 100,000,000 CNY Joint-stock Ltd. (unlisted, private Chinese) Konjac powder, konjac gum, and carrageenan 4,000 tonnes RC 6,000 tonnes SRC Gather Great Ocean Shandong 2000 52,940,000 CNY Ltd. (Private Chinese) Sodium alginate, carrageenan, agar, etc. 4,000 tonnes SRC/RC Zhenpai Fujian 1985 30,000,000 CNY Ltd. (Private Chinese) Carrageenan and agar 3,800 tonnes SRC/RC Global Ocean Fujian 2010 68,880,000 CNY Joint venture (Mainland China-Hongkong) Agar and carrageenan 1,000 tonnes SRC/RC Xieli/Sheli Hydrocolloids Shandong (Yantai) 2005 40,420,000 CNY Ltd. (Invested by Hong Kong Sheli Ltd.) Agar, carrageenan, konjac gum, alginate 3,000 tonnes SRC/RC Lvli Biotechnology (Green One) Fujian 2007 36,000,000 CNY Ltd. (Invested in by Hong Kong company) Carrageenan 5,000 tonnes RC 1,500 tonnes SRC Huixiang Haizao Guangdong 1991 119,344,479 CNY Ltd. (private Chinese) Carrageenan, agar 720 tonnes RC 1,000 tonnes SRC Source: Data from the websites of the headquarters and branches of each company, documented by the authors. The global carrageenan industry 37 Indonesia, through subsidised support for domestic state-owned companies, and more recently, domestic trade restrictions (Langford, Turupadang et al. 2023). However, this has been largely unsuccessful. Indonesia has, however, attracted foreign investment into the sector through six Chinese companies (Zhang et al. 2023). At present, carrageenan processing in Indonesia involves 26 domestic companies and 7 foreign-invested companies as of 2022 (JaSuDa 2022). The foreign-invested companies have larger production capacities (up to 8,000 tonnes/year) compared to local manufacturers (no more than 1,500 tonnes/year). The average capacity utilisation of the companies currently ranges from 50– 60 per cent (Table 1.4). While four domestically owned plants process RC, their production capacity is smaller than foreign investors. Other local manufacturers primarily produce industrial grades of carrageenan for pet food and ATC. In comparison to China and the Philippines, Indonesia has a larger number of companies (ten processors) focused on ATC production. Indonesian carrageenan manufacturing is discussed further in Chapter 2 and a list of Indonesian carrageenan processors is provided in Appendix 4. As is common in many sectors, carrageenan processors in all three countries tend not to operate at maximum capacity. This can be attributed to factors such as market demand, seasonal variations, production capabilities, business strategies, and investment considerations. In both the Philippines and Indonesia, multinational companies represent a substantial portion of their carrageenan processing industry. The foreign investment in the Philippines primarily originates from the United States and Europe. Within Indonesia, investment is predominantly China based. Carrageenan production in China is mainly owned by Chinese investors from mainland China and Hong Kong. In addition, the main focus of the carrageenan processing industry in the Philippines and Indonesia is on the production of ATC and SRC. However, there is a notable difference between the two countries in terms of their product specialisation with the Philippines having a larger number of Table 1.4 Major carrageenan manufacturers in the Philippines Processor Products Production capacity (Tonnes/year) Shemberg SRC/RC 3,600/2,600 Marcel Food Sciences Inc. SRC/RC 5,400/1,800 W Hydrocolloids (PBI) SRC/RC 2,400/1,500 Ceamsia Asia, Inc. SRC 1,800 Accel Carrageenan Corporation SRC 1,500 MCPI Corporation SRC 1800 Mioka Biosystems Corporation (Marcel) SRC 1,800 TBK Manufacturing Corporation SRC 2500 Mega Pollygums Corporation SRC 3,600 LM Zamboanga Carrageenan Manufacturing Corporation ATC/SRC 600/1800 Froilan Trading Corporation ATC/SRC 1,200/1,800 Cebu Carrageenan Corporation ATC/SRC 1,600/800 Source: Data from BFAR (2022). 38 Zhang, Langford & Waldron companies engaged in the processing of SRC compared to Indonesia. In contrast, China has a higher concentration of companies involved in the processing of RC compared to the Philippines and Indonesia. Competitive dynamics While there is considerable differentiation and segmentation, companies in China, Indonesia, and the Philippines compete for global market share on the basis of product quality, production capabilities, cost efficiency, and market access. There is considerable pressure to develop technologies, achieve efficiency, and meet quality and environmental standards. Global competitive trends are now discussed. Rising prominence of Chinese processers The carrageenan processing sector has historically been dominated by multinational corporations from western countries, particularly the United States and Europe, with significant direct foreign investments in the Philippines (RichardsRajadurai 1990; Blanchetti-Revelli 1997; Neish et al. 2017; Palanca-Tan 2018). Processors from China have emerged from a modest starting point and are now playing an increasingly influential role in the sector as processors, traders, market participants, and sources of outward investment (Zhang et al. 2023; Bixler and Porse 2011; Campbell and Hotchkiss 2017; Hurtado et al. 2019). The increasing prominence of Chinese processors in the downstream sectors of the global carrageenan industry has significant implications. Firstly, China’s emergence as the world’s largest carrageenan processor, coupled with the resulting structural changes in the industry and patterns of outward investment, has the potential to significantly impact the demand for raw seaweed and the prices received by small coastal seaweed farmers (Blanchetti-Revelli 1997; Porse and Rudolph 2017). Secondly, Chinese outward investment presents both opportunities and challenges for policy makers in countries seeking industry development, employment generation, and tax revenue, while also facing pressure from domestic industry interests. Thirdly, the rise of Chinese carrageenan processors has attracted the attention of large corporate interests in western countries, who view them as either competitors or potential partners. Finally, China’s increasing influence in global trade governance, food safety, and environmental protection has significant and wide-ranging implications for the entire carrageenan industry (Chan et al. 2011; Liu et al.2019; Langford, Waldron et al. 2023; Coenen et al. 2021; Dong and Li 2021; Waldron et al. 2023). Trend towards processing in countries of origin The processing of seaweed extracts in countries of origin has increased in recent years, which has the potential to alter the structure and dynamics of the supply chain. In particular, Indonesia and the Philippines have traditionally been major seaweed producers and exporters of raw dried seaweed. However, these countries The global carrageenan industry 39 are building capacity in the carrageenan processing sector in a bid to capture more value domestically. If this can be achieved at scale, it may impose limits on the supply of raw dried seaweed for countries that previously sourced raw materials from Indonesia and the Philippines. Chinese investment in Indonesia can be seen as a means of securing supply. At the same time, Chinese carrageenan processors are under pressure from increasing labour costs and environmental standards, which act as drivers for outward-bound investment in Indonesia and other countries. This movement within the supply chain requires major investment and upgrade capacity. This includes significant investment in technology and research and development from public investment and technology transfer from foreign-invested companies. It would require adherence to standards (e.g. International Organization 22000:2018 and 9001 certification, Food Safety Systems Certification FSSC, 22000) and the utilisation of mechanisms to facilitate access to markets such as the European Union (EU) (CBI 2019). Shift towards RC Another form of chain advancement is a shift towards the production of highervalue RC, a stated goal of all three major carrageenan-producing countries. This shift is probably driven by a range of factors, including the rising demand for RC in food and beverage, pharmaceuticals, and personal-care products due to its higher purity, enhanced functional properties, and a broader range of applications. This contrasts with stagnant demand for SRC from the processed meat and dairy primary sectors (Figure 1.4), where visual clarity is not a crucial factor (Hotchkiss et al. 2016). Recognising these market dynamics and the changing demand landscape, major carrageenan processors are investing to upgrade their processing capabilities and infrastructure to enable the production of RC. Of course, this poses entry barriers and additional costs. If the additional revenues from the production of higher-priced RC outweigh the costs, companies may have an incentive to remain in the lower-value SRC market. The shift towards RC signifies a strategic move by major processors to increase the value-added and competitiveness of their carrageenan industries. They all utilise alkaline mixtures in the processing of SRC. However, the production of RC through alcohol precipitation, is predominantly undertaken by Chinese processors and Shemberg Biotech in the Philippines. Compared to Indonesia and the Philippines, China has taken the lead in this specific process. Effluent management Carrageenan extraction requires the input of alkali, acids, salts, water, and energy for heating and subsequent purification of carrageenan from seaweed biomass (Olatunji 2020). The process generates significant amounts of toxic waste, including wastewater, exhaust gas, solid waste, and noise. Zhang et al. (2023) highlights that wastewater is primarily produced during the washing, dehydration, and heating stages. Exhaust gas is emitted during the crushing and grinding of raw materials, as 40 Zhang, Langford & Waldron well as during the alkali and wastewater treatment, leading to odorous emissions. Solid waste consists of sediment washed from seaweed, filter residue from the filter press, recycled dust, raw material packaging (barrels and bags), and wastewater treatment sludge, which can potentially be repurposed as agricultural crop substrates or soil amendments. Moreover, the mechanical operation of production equipment, such as pulverisers, colloid mills, and centrifuges, generates noise levels measured at approximately 80 dB when assessed at a one-metre distance from noise level devices. The management of waste disposal poses persistent challenges and represents a significant cost for carrageenan processors if they comply with environmental regulations. Compliance may include the construction of wastewater treatment facilities, the installation of dust collectors, the implementation of anti-seepage and hardening measures in factory areas and workshop grounds, and the establishment of general and hazardous waste temporary storage facilities. Competition in the carrageenan production sector will force manufacturers to increase competitiveness by improving product quality, product diversification, and exploring new applications for carrageenan. This will encourage investment in research and development, infrastructure, and technology, leading to advancements within the industry, processing facilities, and improved industry capability. Moreover, companies could strive to capture larger market share by exploring new markets and expanding distribution networks, making carrageenan products more accessible globally. These could benefit stakeholders throughout the supply chain and the global carrageenan market by driving efficiency, fostering collaboration, and ensuring a wide range of carrageenan products to meet consumer demands. Changing environmental regulations may affect the profitability of carrageenan processing differently in different countries (Zhang et al. 2023). The sector will also face opportunities and challenges arising from changing regulations, sustainability concerns, and evolving customer expectations. There are opportunities to demonstrate compliance with regulatory standards, which can enhance reputation and secure a competitive edge by meeting regulatory requirements. Furthermore, changing customer expectations require product reformulation, innovation, and responsiveness to emerging trends. However, manufacturers must strategically navigate these opportunities and challenges to balance economic viability and ensure long-term success. Trade Global production of carrageenan seaweed is mainly concentrated in Indonesia and the Philippines which is reflected in their exports. Available data from the UN Comtrade database reveals that the international trade volumes, values, and prices of carrageenan seaweed and carrageenan have fluctuated substantially over the last three decades. This is due to factors including market dynamics, environmental conditions, and trade policies. Understanding these factors aids in foreseeing and managing future trends in the industry. The global carrageenan industry 41 Carrageenan seaweeds Over the course of three decades, both the volume and value of carrageenan seaweed exports from Indonesia have undergone substantial increases (Figure 1.6), rising from around 12,085 tonnes and US$5.9 million in 1989 to 187,662 tonnes and US$219 million in 2021. This represents a compound annual growth rate of around 44 per cent in volume and 110 per cent in value over the past 33 years. The impact of the COVID-19 pandemic on exports was short-lived (declining 7.3 per cent in 2020) and was followed by a rebound the following year (see Langford, Waldron et al. 2021; Langford et al. 2022). The volume and value of carrageenan seaweed exports from the Philippines are much smaller than Indonesian exports. The export of seaweed from the Philippines has increased slowly for more than two decades, with considerable fluctuations (Figure 1.7). According to the available data, the first peak in seaweed exports was recorded in 2000, with a total volume of 49,080 tonnes and a value of US$46.5 million. Export volumes then decreased, hitting a low of 10,823 tonnes in 2009, before experiencing a resurgence in the early 2010s. This was then followed by another decline to approximately 3,100 tonnes in 2017. Export volumes remained below 15,000 tonnes from 2017 through to the end of 2022. According to UN Comtrade statistics, the average trade price of seaweed products has been highly unstable in both countries, especially in recent years (Figures 1.6 and 1.7). The pricing of seaweed products varies depending on a range of factors aggregated in the statistics (product form, quality, natural disasters, climate variability, and changes in market conditions). Notably, the international price of 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 0 50 100 150 200 250 US$/KG US$ million 000 tons Trade valueTrade volume Average price (right axis) Figure 1.6 Indonesia carrageenan seaweed export to the world by value, volume, and average price Source: Data from UN Comtrade (2023). 42 Zhang, Langford & Waldron raw dried carrageenan seaweed from the Philippines has consistently been higher than that from Indonesia, fluctuating between US$0.77 and US$2.33 per kilogram from 2010 to 2022, compared to Indonesia’s range of US$0.7–1.17/kg. The higher prices for seaweed products from the Philippines compared to Indonesia could be due to a different mix of species produced (as spinosum is significantly lower priced than cottonii), lower moisture and dirt content, or different characteristics of the seaweed due to different growing conditions. The destinations for carrageenan seaweed exports vary as shown in Figure 1.8. Indonesia is the largest exporter of carrageenan seaweed, with the overwhelming majority of exports going to China (84 per cent), followed by Vietnam (5 per cent), the Republic 0.00 0.50 1.00 1.50 2.00 2.50 3.00 0 10 20 30 40 50 60 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 US$/kg US$million 000 tones Tradevalue TradevolumeAverageprice (right axis) Figure 1.7 The Philippines carrageenan seaweed export to the world by value, quantity, and average price Source: Data from UN Comtrade (2023). Figure 1.8 The major global trade networks of carrageenan seaweed in 2021 Source: Data from UN Comtrade (2023) and China Customs (2023). The global carrageenan industry 43 of Korea (3 per cent), the United States (2 per cent), and Chile (2 per cent). The Philippines is the second largest exporter of carrageenan seaweed, exports going to the United States (26 per cent) and China (24 per cent). Other significant export destinations include France (17 per cent), Argentina (16 per cent), and Brazil (6 per cent). Overall, China is the largest importer of global carrageenan seaweed. China’s demand for carrageenan seaweed is driven by its use in carrageenan production. Carrageenan Despite the absence of precise data regarding the production volume of carrageenan in individual countries, previous industry estimates suggest that the global production capacity of carrageenan ranges between approximately 80,000 million tonnes (MT)/year (Porse and Ladenburg 2015) and 110,000 MT/year (Neish 2015). A more recent estimate from Grand View Research (2023b) suggests a value of US$ 924.7 million for the carrageenan industry with a projected compound annual growth rate of 5.4 per cent from 2023 to 2030. Asia has become a significant producer of carrageenan, with China, Indonesia, and the Philippines ranking among the largest producers. Figure 1.9 provides an illustration of the trade networks of carrageenan among key industry players and their corresponding export destinations in 2021. This finding is supported by Grand View Research (2023b), which highlights Europe as the world’s largest consumer market, accounting for 33 per cent of global consumption volume, followed by the Asia Pacific region (30 per cent), and North America (23 per cent). China exported 20,849 tonnes of carrageenan in 2021, with a trade value of US$186 million, shipped to 82 countries and regions. However, 69 countries imported less than 2 per cent of Chinese exports (< 400 tonnes). The majority of China’s carrageenan exports (44 per cent) went to the EU, followed by other Asian countries (25 per cent), and Russia and the Ukraine (15 per cent), with very little imported into the United States. Despite the downtrend in seaweed exports, the Philippines remains the leading exporter of carrageenan to the United States (31 per cent of exports) and the EU-27 (27 per cent), with a larger share Figure 1.9 The major global trade networks of carrageenan in 2021 Source: Data from UN Comtrade (2023) and China Customs (2023). 44 Zhang, Langford & Waldron than China in these markets. Indonesia’s carrageenan exports were mainly within the Asian market, with more than half going to China. Initiatives to build the domestic carrageenan processing sector have seen a tenfold increase in Indonesia’s carrageenan export value and a ninefold increase in export volume during the past decade. Values increased from US$9 million in 2010 to 87 million in 2020. Volumes increased from 1,382 tonnes in 2010 to 13,973 tonnes in 2020. China relies heavily on imported raw materials for carrageenan processing. While most raw dried seaweed was imported from the Philippines before 2000, Indonesia now completely dominates exports to China (Figure 1.10). Other sources such as Chile, the Republic of Korea, and Japan are supplementary sources. The United States and the EU have significant and longstanding carrageenan processing industries. As shown in Figure 1.11, the market share of the United States, France, and Chile has steadily declined, while several EU countries (Spain, Germany, and the United Kingdom) have maintained a stable market share. One of the challenges facing the US and EU carrageenan industry is competition from low-cost producers, particularly in Asia. This has led to consolidation within the industry, as smaller producers have been acquired by larger companies with the resources to compete on the global market (Bixler 1996, p. 37). Changes in average export carrageenan price levels in China, the Philippines, and Indonesia are shown in Figure 1.12 and reveal two key dynamics. First, the price of carrageenan in the international market was generally stable in the first half of the 2000s but has increased rapidly since the mid-2000s. Second, carrageenan export prices in China have been consistently higher than Indonesia and the Philippines, reflecting a different mix of highand low-value carrageenan products (e.g. SRC and RC) and contradictory perceptions that China is a low-cost manufacturing centre. The price of carrageenan reflects supply considerations as well as demand from carrageenan users. The own-price elasticity of demand for carrageenan (the sensitivity of carrageenan demand to a change in its price) depends on how likely 0 50 100 150 200 250 300 350 400 450 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 MillionUS$ Indonesia Philippines Rest of worldWorldWorld (right axis) Figure 1.10 Carrageenan seaweed import by China in trade value Source: Data from UN Comtrade (2023). The global carrageenan industry 45 manufacturers of foods and other products are to change their use of carrageenan if prices rise or fall. There is little information to quantify the impact of price fluctuations. However, as carrageenan typically accounts for only a small portion of the cost of an end product, a change in its price may cause a relatively small change in the total cost. Therefore, price changes are likely to have a limited impact on 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 10 0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 $ US Billion Canada Chile ChinaDenmark France GermanyIndonesiaItaly JapanNorway PhilippinesRep. of Korea Spain United KingdomUSARest of World Global export value (right axis) Figure 1.11 Export of carrageenan from various countries by trade value Source: Data from UN Comtrade (2023). 0 2 4 6 8 10 12 14 16 18 20 Jan‐17 May‐17 Sep‐17 Jan‐18 May‐18 Sep‐18 Jan‐19 May‐19 Sep‐19 Jan‐20 May‐20 Sep‐20 Jan‐21 May‐21 Sep‐21 Jan‐22 May‐22 Sep‐22 Jan‐23 USD/kg IndonesiaPhilippines China Figure 1.12 Average monthly unit values of carrageenan exports from selected countries, 2017–23 Source: Conclusion Data from UN Comtrade (2023) and China Customs (2023). 52 Waldron, Langford, Pasaribu et al. activities. Neish and Suryanarayan (2017) argued that these companies explored and helped to establish the Indonesian seaweed production sector. In the 1990s, the development of simple processing technologies (for semi-refined carrageenan (SRC)) led to the proliferation of seaweed processing companies, some of which were founded by previous employees and traders associated with the SMEs and MNCs. Rather than dealing directly with farmers, the companies dealt indirectly through what they called integrated or allied suppliers in modular governance systems. Standards for seaweed farming were set by an international hydrocolloids organisation (MARINALG) and were enforced by the enterprises. By 2000, the Indonesian industry was dominated by market governance systems, where processors had become even more disconnected from farmers, linked by largely autonomous middlemen who conducted spot transactions. Seaweed and seaweed product standards proliferated but were applied unevenly or not at all, and farmers fended for themselves with little company or government support. As elaborated below, there were few cases of relational governance where contracts were used to link seaweed producers and downstream actors. Neish and Suryanarayan (2017) suggested that industry development in Indonesia was led by economic agents, including farmers, companies, and scientists linked to companies and key individuals.2 Chapter 3 documents the involvement of Universitas Hasanuddin in South Sulawesi at this early stage. From this base, other actors have entered to formalise the industry development process including industry associations, development agencies, and, of most interest to this chapter, the government. Government interest can be explained by several key factors. Government interest in seaweed The seaweed industry has become increasingly economically significant. Like all countries, the share of agriculture, forestry, and fisheries in total GDP has declined and in 2021 stood at 13.28 per cent. Fisheries contributed 22 per cent or Rp. 505,061 billion to GDP at 2021 nominal prices (Bank Indonesia, 2023) and seaweed is a significant contributor to Indonesia’s total aquaculture production (BAPPENA, 2021, p. 65). The industry also provides livelihood activity for a significant number of rural and coastal Indonesian households. Estimates vary largely (see Appendix 1), but suggest that around 62,000 households farm seaweed (BPS, 2022a), with more involved in the seaweed industry in other ways – for example, as casual wage labourers or service providers (see Chapter 8). To provide some context, this compares with 31 million households engaged in agriculture in Indonesia in 2013, 1.6 million of which were engaged in capture fishing, and 985,000 in fish farming (BPS, 2022). The global carrageenan industry is large with high potential growth prospects (see Chapter 1). Already the dominant global carrageenan seaweed producer, Indonesia, is globally competitive in this sector (Yulisti et al., 2021). Ambitious plans for growth in downstream sectors are thought to provide an opportunity to generate much-needed off-farm employment, investment, and tax revenue. An Omnibus The Indonesian seaweed industry 53 Law (Job Creation Law, UU Cipta Kerja 11–2020), aims to develop a businessenabling environment and is supported by a large number of subordinate regulations, policies, and activities designed to generate investment. While during the 1990–2000s the industry developed in a largely organic way, the government is aiming for a more orderly and formalised industry development process. This is thought to require increased policy attention in fields including industry planning, sea-use zoning, research and development, and the coordination of measures to attract investment. This has led to the proliferation of a large number of policies associated with seaweed production. A policy analysis by Permani et al. (2023) of the Indonesian seaweed industry revealed 67 policy documents with a peak of promulgations in 2021 (Figure 2.1). A major landmark in the evolution of the Indonesian seaweed policy landscape was the issuance of the Presidential Decree 33–2019, Road Map of National Seaweed Industry Development 2018–2021. The Decree is wide in scope and encompasses a large number of other policies and is referred to throughout the chapter. However, there are many other high-level policies3 which are listed in Appendix 2. Thus, an extensive institutional web has evolved to support industry development, governance, and service provision. Institutional actors include government administrative line bureaus to design and implement policy, government extension agencies to disseminate technologies, research and development organisations to 0 5 10 15 20 Number of policies Years of issuance Figure 2.1 A count of government policies relevant to the Indonesian seaweed industry, 1999–2022 Source: Image reproduced from Permani et al. (2023). 54 Waldron, Langford, Pasaribu et al. increase technological levels, and associations to represent industry interests. Jurisdiction for the seaweed industry falls mainly under the Ministry of Marine Affairs and Fisheries (KKP) and its line bureaus but intersects with a large number of units in government, research, associations, and international organisations. These are detailed in Appendix 3. The production sector Early growth period The carrageenan industry had globalised by the 1970s when MNCs from Western countries invested in seaweed production in the Philippines, to be used for both processing in the country and international export. Exploratory missions for wild seaweed and early efforts in cultivation were attempted in Indonesia in the 1970s, as described in the Preface. Particular staff of companies in the Philippines – Copenhagen and FMC (later to become MCI) sought to ascertain the technical feasibility of seaweed production around Bali and Nusa Dua in the 1980s (Mariño et al. 2019; Iain Neish, personal communication, 10 September 2022). When trials proved successful, seaweed breeding stock and technologies were disseminated to other areas, predominantly through contact with other local coastal communities and by movement between communities. Local businesspeople engaged in retail, trading, wholesale, and credit, in an integrated way which often acted as key extension conduits (Iain Neish, personal communication, 10 September 2022). The entrepreneurs were interested in adding a new activity to their portfolios alongside food and other aquatic products. As traders that were embedded in villages, they had close contact with farmers to disseminate knowledge and inputs (such as ropes, credit, and seedlings) into seaweed production. Low-income coastal communities could be expected to be receptive to efforts to extend seaweed if the activity adds to or aligns with broader livelihood strategies. New activities may contribute to a livelihood diversification strategy (Ellis, 1998) especially if they are complementary to existing activities in relation to labour demand, seasonality, sustainability, barriers to entry, location, and potential income growth (Reardon, 1997). Seaweed is also a labour-intensive activity that can be expected to develop in areas with low wages and opportunity costs of labour. Production structures Unlike many other agricultural sectors where there are large estates (e.g. palm oil), contract systems (e.g. chickens), or economies of scale (some grains), the seaweed production sector is dominated by individual, autonomous households, with a dearth of examples of corporatised production. Seaweed cultivation is sensitive to many environmental factors that are highly location-specific, variable, and uncontrollable, as Chapters 6 and 7 discuss (e.g. tides, seasons, rainfall events, disease, and other shocks). To be productive and resilient in these conditions, producers need to have both in-depth knowledge of local conditions and the flexibility and incentive to work around these conditions. For The Indonesian seaweed industry 55 all but the largest households, seaweed farming is not a full-time job so it requires flexibility to allocate labour across a range of other complementary activities. The predominance of households in seaweed production conforms to theory related to the competitiveness of actors with different scale and governance structures. There can be an inverse relationship between productivity and farm size in agricultural activities where households allocate labour efficiently or endure shocks (Chayanov, 1991). Small farms can be more efficient than large farms when high levels of local knowledge are required (Hazell et al., 2010). When hired labourers are costly to monitor or motivate, the self-supervision function of family farms are more efficient than large farms (Keijiro et al., 2016). Smallholders are also highly responsive to increased access to new technologies and markets (Schultz, 1964). Alternative structures to autonomous, individual households have been trialled but are yet to be successfully established. A processing company (Widjaya) sought to farm a large area of seaweed using hired labour but encountered problems with production. New technologies and products developed for seaweed farming in deeper waters, including the use of mechanised floating and harvesting methods (e.g. Sea6), are under development but not fully operational. Several processing companies (e.g. Mitsubishi) have, or are seeking to develop, contractual relations with households but these efforts remain at an exploratory stage. While these corporate structures are yet to gain a foothold, conditions that may see some incursion in the future include increases in labour costs (see Chapter 8) and demands for traceability (Kirsten and Sartorius, 2002). This is not to say, however, that dominant smallholder systems are static. It can take time for news about seaweed to travel and be taken up, especially if the uptake requires substitution out of other activities. Risk-averse households may wait to see the activity ground-tested by other farmers. Households incrementally develop ways to deal with shocks (e.g. weather, disease) and to tinker with systems to increase production or productivity. Data from fieldwork sites in the household sector show the emergence of significant numbers of large-scale household farmers who employ casual wage labourers for some tasks (see Part II of this book and Langford, Waldron et al., 2024). Household organisational modes also vary. Neish and Suryanarayan (2017) distinguished between two types of seaweed farmers. The first was the traditional nuclear family model, where spouses and their immediate relatives share the work and income from seaweed cultivation. The second is the lead farmer model where one person or a small team manage the farm enterprise and sell the crops, but where labour is bought in for a range of tasks, especially attaching cuttings and drying. Group structures (associations and cooperatives) are also promoted by government. There is wide diversity amongst households in their scale of production, sea space use, and labour use even within the same village (see Part II). Policy settings for production The Indonesian seaweed industry has grown somewhat organically through the activity of economic agents operating in a conducive biophysical and socio-economic environment. However, government is now playing an increasingly active role in 56 Waldron, Langford, Pasaribu et al. production aspects of the industry through technical extension, research and development, and in seed propagation. Permani et al. (2023) documented 24 policies that relate directly to the production-side aspects of the industry. An important role of government is to invest in research and development. A wide scope of research has been conducted but production-side aspects feature in all of it.4 Most research is conducted on seed breeding and supply, but other areas include fish repellents and drying ovens. Another fundamental role of government in the production sector is in technical extension. With equivalents in the agricultural sector and other aquaculture industries, the Department of Fisheries and Marine Affairs at provincial level (DKP) has a technical extension system charged with developing, testing, adapting, and disseminating new seaweed technologies or practices in coordination with farmers. Staff are located and managed by the DKP at the sub-district level. Similar to extension in other countries, the system is stretched for human resources. In South Sulawesi, the seaweed-intensive sub-districts have just two extension agents responsible for vast distances and large numbers of villages and households. Duties of the staff include a large range of additional administrative duties (e.g. statistics, administration, and certification). Farmers have questioned the effectiveness of the extension system at the local level and developed and disseminated many technologies themselves. However, several key production-side technologies have been derived from the extension system including the para-para drying method, the double-line cultivation method, and mixed-species cultivation. The DKP also disseminates inputs (e.g. ropes and boats), often through group structures that aim to improve production, marketing, and extension. A final form of government involvement in the production sector is through technical implementation units (TIUs) that produce and disseminate seaweed tissue culture in fresh water, brackish water, and marine aquaculture. Known as seedling gardens (kebun bibit) the units come under the jurisdiction of the Ministry of Marine Affairs and Fisheries (Regulation 70–2020) and are located in 18 locations and 20 seaweed villages (Kampung Budidaya Rumput Laut). Examples of research laboratories include the Brackish Water Fisheries Aquaculture Centre in Takalar and the Mariculture and Fisheries Centre in Lombok. The centres were established to increase the quantity and quality of supply of propagules, a key constraint in household production systems particularly at the start of the season (Grist, 2022; Langford, Waldron et al., 2023). The centres aim to propagate seaweed with quality characteristics that include vigour, colour, and branch structure, all of which are largely a function of age. The seedlings are bred in controlled environments using vegetative techniques. Sporulation that would allow increased production is being trialled but is yet to be scaled up for production. To increase production and dissemination, out-grower schemes with selected households are also used. Despite these efforts, the volumes of propagule material disseminated from TIUs is just a fraction of that produced by households themselves or that traded between households. A relatively small proportion of households directly receive free tissue culture propagules from the programme (Grist, 2022) but The Indonesian seaweed industry 57 with frequent sales and exchanges between households, many may have received the material indirectly. Seaweed production The agro-climatic and socio-economic environment depicted in this discussion is conducive to growth in seaweed production. National production statistics have reported exponential growth in seaweed output since the 2000s with some decline in recent years. Export statistics from Indonesia trend similarly, with rapid growth to 2010 followed by fluctuations in recent years. If accurate, reported declines may have been due to labour transition from seaweed cultivation to other more lucrative or attractive activities such as tourism (Wiratmini, 2018; Keohane, 2016) but the COVID-19 pandemic induced the opposite effect (Langford et al., 2021; Nuryartono et al., 2020). When the tourism sector was severely affected in areas like Bali, affected workers returned to on-farm activities including seaweed production (BBC, 2020; Pratiwi, 2020). Over-use of key production areas may have contributed to recent declines. Much of the early expansion in seaweed production occurred in key areas including Bali, Nusa Dua, and South Sulawesi. By the 2000s, however, the industry had expanded across the archipelago with some of the expansion occurring informally. For example, members of households, mainly ethnic Buginese, from coastal communities in South Sulawesi, worked on palm plantations in Sabah in Malaysia (Iain Neish, personal communication, 10 September 2022). On route, these workers stopped over in North Kalimantan and observed conditions well suited to seaweed cultivation. The migration of workers and practices from South Sulawesi led to increased seaweed cultivation and has become a significant seaweed producing province. While much information has been informally passed between those in the sector, more formal government programmes aim to expedite the process. These programmes aim to overcome issues related to dissemination in remote regions and this is reflected in national policies and plans (such as the Presidential Decree). However, provincial and sub-district government have also developed and implement policies. These efforts reflect Indonesia’s decentralisation programme implemented in 2000. Provinces hold jurisdiction over major issues such as marine zonation and regional development plans. The spatial distribution of seaweed production in Indonesia in 2020 is shown in Figure 2.2, which shows the importance of Sulawesi (especially South Sulawesi) in national seaweed production. The marketing sector The Indonesian seaweed marketing sector that links the production to processing sectors, comprises of a rich tapestry of actors, transport, and logistics systems, and institutional arrangements. Of particular interest is the role of traders, who play an important role in the organisation of the seaweed industry (Mulyati, 2015; Sutinah et al., 2018). In the earlier stages of industry development, MNCs were one 58 Waldron, Langford, Pasaribu et al. driver of the dissemination of production practices. These companies linked with local businesses with shops in villages or sub-district towns. Local traders were typically integrated with retail, wholesale, trading, and finance activities and were commonly ethnic Chinese Indonesians. With scientists and companies looking to expand seaweed production during the 1980s, these entrepreneurs were the key conduits in organising supply and linkages to farming communities. These local-level relationships remain as the backbone of the seaweed marketing system, especially at the farmer-market interface. However, with increasing trade volume and demands from buyers, additional intermediaries have entered the industry to form a hierarchy of traders that lead to export markets or processing companies. Neish and Suryanarayan (2017) describe these as market-governed systems run by largely autonomous actors, although there are also remnants of the modular system, where companies and exporters have close relationships with certain buyers. The market hierarchy The structure of the Indonesian seaweed marketing system has evolved to form a hierarchy of actors, linked through the exchange of seaweed for money. Local traders weigh and visually assess local farmers seaweed and buy at an agreed price, usually for cash “on the spot”. The relationship is supported by embedded services and backward linkages. For example, traders provide inputs like rope, credit, or seedlings to the households which are paid off on the sale of the seaweed (Neish, 2013). Local traders can deal directly with farmers or, to reduce transaction costs, buy through local-level collectors. Unlike traders, collectors do not take ownership of seaweed but are provided with cash or credit from traders to buy seaweed from households based on their knowledge, contacts, trust, and negotiation, or logistical skills. The collectors might deal with 50–110 farmers and are sometimes heads of the local seaweed associations (Mulyati, 2015). Collectors tend to be more prevalent in the larger seaweed producing and marketing villages, like Laikang, rather than the smaller villages, like Pitu Sunggu (Waldron et al. 2022). Figure 2.2 Volumes of marine seaweed produced for sale across Indonesia in 2020 Source: Data from BPS (2022). The Indonesian seaweed industry 59 Local-level traders may also dry and clean the seaweed before aggregation with other lots, to then transport to downstream actors, which are larger traders or processors. There are a wide variety of traders in the hierarchy ranging from the village level to intraand inter-island traders. In addition, there are estimated to be around 100 traders with export licences that supply foreign markets and domestic processors (Hogervorst and Kerver, 2019). This chain of traders can sometimes be shortened by processors that have more modular relations through more stable procurement arrangements with particular buyers. For example, the company Shanghai Brilliant Gum (BLG) sources seaweed through company procurement staff and traders in repetitive, ongoing relationships. These include seven former seaweed exporters5 based throughout Indonesia but especially in South Sulawesi, North Kalimantan, and the eastern provinces. Market characteristics The market-based governance system of the seaweed marketing system bears close resemblance to that of other commodities in Indonesia and other developing countries. This is especially the case for cash crops like fruit and vegetables, marine products, and some livestock and grain commodities.6 Indonesian seaweed markets have several characteristics. The first is that transactions occur in informal spot markets between autonomous actors. Transactions are usually made in cash without compulsory sale, inputs, product specification, or other formal obligations. The relationships can be repetitive between households and the seaweed buyers. Trust and backward linkages of credit, seedlings, or rope are informal and socially bound relationships between the parties. This contrasts with transactions through farmer-buyer contractual systems, where parties are bound by formal legal arrangements. Smallholders are likely to move from spot to contract systems for food products that are differentiated, perishable, or where consumers have food safety concerns (Kirsten and Sartorius, 2002). While these demands are growing in a range of foods, seaweed can be regarded as a bulk commodity where spot markets are generally effective and minimise transaction costs (legal, measurement, and monitoring). Neish and Suryanarayan (2017) describes emerging seaweed technology and chains that may utilise a contractual system. Second, a language to describe seaweed characteristics is widely accepted and used, but often in a broad, informal, or subjective way. For example, the buyer or seller may claim moisture content of 36–38 per cent and dirt and contamination of 3–5 per cent. Some processors have additional specifications for colour (light) and carrageenan yield (e.g. 25 per cent) linked to pricing schedules. In practice, however, these specifications are not always applied and are rarely measured in farmer-trader transactions. This may raise questions in relation to the accuracy of visual assessments (made by eye) and information asymmetries in the transaction. Notionally, buyers would have a better eye for seaweed characteristics as they buy and sell every day and would have an incentive to discount estimates of grade (moisture and contamination) in order to discount the price. On the other hand, 60 Waldron, Langford, Pasaribu et al. farmers who dry and pack the seaweed presented to the buyer also have an incentive to do so opportunistically (e.g. by putting wet or dirty seaweed at the bottom of sacks) to increase the weight, the measurement unit on which the transaction is made (Stone et al., 2023). A third feature is that the seaweed chain is relatively long with a large number of actors and stages of transformation (Komarek et al., 2023). This means actors in the early stages of the chain (producers) have no direct contact with downstream actors (e.g. processors) and are unlikely to even recognise the final product. This makes it very difficult to effectively transmit price-grade differentials and buyer preferences down the chain. The indirect signalling of differentials is tested in price analysis discussed below. Finally, there appears to be a large number of seaweed buyers in the industry which could be expected to create competitive markets. Indeed, in periods of high demand, buyers compete fiercely with each other for supply. Opposingly, however, the organisation of the hierarchy of traders leads to a limited number of end users who can be powerful.7 For example, the purchasing power of companies like BLG and Greenfresh are known to set prices for the week.8 The competitiveness of markets is also tested in the price analysis below. Another feature of the Indonesian seaweed industry is that ethnic Chinese Indonesians dominate the post-production sectors. Chinese Indonesians have traditionally played a major role in seaweed trading and exports and own the majority of domestic Indonesian carrageenan processors, 9 as is the case in the Philippines.10 This follows structures in agriculture-based trade established by early Chinese diasporas (Skinner, 1963) that have been observed in fisheries (Novaczek et al., 2001) and contemporary local-level business activities (Chiang and Cheng, 2017). The literature has documented ethnic Chinese business networks that form alliances with elites and may expedite business (McVey, 1992). These alliances can extend to mainland China through trade and investment flows (Ren and Liu, 2022). As established in Chapter 1, the vast majority of Indonesian seaweed is exported to China. Price analysis Prices provide valuable insights into the functioning of marketing systems. They signal the interplay between supply and demand, show patterns of change over time, and the degree of integration in time, space, and product attributes. Langford, Zhang et al. (2022) conducted a price analysis for Indonesian seaweed based on fortnightly price observations collected by Jaringan Sumber Daya (JaSuDa) in 13 locations across Indonesia. The data has been collected since 2005, but a sub-set from 2011 to 2021 were used. The prices have been updated to May 2023 and are presented in Figure 2.3. The price data provides several insights. In January 2015 there was a large price decline that coincided with the announcement of a ban on raw seaweed exports as part of a broader industry policy to stimulate domestic processing. In September 2017, there were rapid price increases that coincided with the start of operations at Indonesia’s largest processor, BLG. From mid-2019 to mid-2021, prices declined The Indonesian seaweed industry 61 and stagnated, aligning with the most severe disruptions from the COVID-19 pandemic. After the price analysis by Langford, Zhang et al. (2022), there were rapid and sustained price increases through the second half 2021 and first half of 2022 (Langford, Waldron et al. 2023). It is important to note that the prices are notional, but seaweed price increases outstripped inflation. The historically high prices were good for seaweed farmers but placed a strain on the capital stocks and margins of downstream actors. Price levels have since corrected but appear to remain above pre-COVID levels. Another finding of the price analysis is that prices are (spatially) co-integrated between regions (Figure 2.3). This is an indicator of a competitive and generally well-functioning market, underpinned by competition and flow of information. However, prices however became less integrated after the rapid increases in 2017, possibly as a result of BLG purchasing, and into the 2020–21 COVID pandemic. Transport and supply chain disruptions meant that prices were relatively lower in more remote areas (Palopo in South Sulawesi, Tual in Maluku, and Bontong and Nunukan in Kalimantan) compared to areas closer to major trading hubs (Makassar). Model results also show that the area closest to Makassar (Takalar) leads prices in other regions (Langford, Zhang et al., 2022). The data collected includes seaweed prices and the basic attributes of moisture content and contaminant levels (sand and salt). Regression analysis found a low correlation between these variables, suggesting low transmission of the value for quality characteristics of seaweed and narrow price-grade differentials. This may be a function of inaccurate (subjective) measurement or incentives by all parties to 0 10,000 20,000 30,000 40,000 50,000 )gk/pR(ecirP Year Makassar, South Sulawesi Takalar, South Sulawesi Denpasar, Bali Bontang, Kalimantan Kupang, NTT Tual, Maluku Muna, South East Sulawesi 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Figure 2.3 Nominal seaweed prices in seven locations in Indonesia, 2011–23 Source: Data provided by Jasuda in 2023. 68 Waldron, Langford, Pasaribu et al. Carrageenan products Within the seaweed-to-carrageenan sector, Indonesian policy makers pursue multiple forms of upgrading or value-adding, which is a major focus of the Presidential Decree. As the majority (65 per cent) of Indonesian seaweed is exported in raw dry form, the government is seeking to increase the proportion processed domestically to 50 per cent. It also aims to make the country a global leader in the carrageenan sector, which appears sound given the high and sustained forecast growth (Chapter 1). Another form of upgrade can be seen in the processing pathways of carrageenan. The majority (56 per cent) of Indonesian carrageenan is in the form of semi-refined product. The Presidential Roadmap aims to increase the proportion of seaweed processed into RC from 10 per cent to 18 per cent. Indonesia also aims to produce highvalue niche carrageenan products for certain markets, including Europe (Hogervorst and Kerver, 2019). Within Indonesia, the vast majority of carrageenan produced is exported or used domestically as a food additive, especially for drink products. The Presidential Decree plans to increase the utilisation of carrageenan in other domestically produced foods including coffee, milk, meat, jellies, and toothpaste. Non-carrageenan products It is likely that the Indonesian seaweed will be oriented to the production of carrageenan for some time. However much of the attention of the Presidential Roadmap is concerned with the development of non-carrageenan products. This includes direct food products (Adharini et al., 2019), animal feed, fertilisers (biostimulants, liquid and solid fertilisers, and planting media), cosmetics (e.g. capsules, pills, toothpaste, hair cream, soap), and bioethanol (Sulfahri, Husain et al., 2020; Sulfahri, Langford et al., 2020). The use of seaweed in a wide range of applications has generated attention world-wide, partly due to perceived environmental benefits, especially for Asparagopsis (Kinley et al., 2020; Ball et al., 2022). However, many of the technologies and applications are in the early stages of development and face logistic or commercial challenges. Further development should not be based only on technological development but should be subject to a full cost-benefit analysis to ascertain economic viability. In line with potential and ambition, Indonesia has invested significantly in organisations to conduct research and development into new seaweed projects. These include: the Centre of Excellence for Seaweed at Hasanuddin University; Badan Pengkajian dan Penerapan Teknologi (BPPT) (Agency for the Assessment and Application of Technology) with a seaweed-based capsules programme; Seaweedbased Capsule Shell Teaching Industry facility at Universitas Airlangga; and the Department of Aquatic Product Technology, Faculty of Fisheries and Marine Sciences, IPB University in Bogor. Cross-cutting policies The previous discussion overviewed the seaweed industry by reviewing on a sector-by-sector basis. However, several aspects of the industry cut across industry The Indonesian seaweed industry 69 sectors. This includes food safety and the regulation of the use of carrageenan in organic food, which is overviewed in Chapter 1. Other cross-cutting issues such as marine zoning and investment are reviewed below. Zoning The rules and norms that govern use of sea space have been developed by communities and households themselves through the development of informal institutions (see Chapter 5). However, the expansion and intensification of seaweed production may involve an increased role for government to mediate competing interests between seaweed farmers, other aquacultural activities, use of boat lanes, and marine protection zones. Zoning may have a role in reducing conflict, protecting public goods, allocating resources, and attracting investment (Permani et al., 2023). While land-based property rights are more established in Indonesia, the government in recent years has turned its attention to zonation in marine areas, which may impact on seaweed cultivation. The national government has a stake in zoning, but jurisdiction lies at the provincial level. Law 7–2007 on the management of coastal areas and small islands provided a mandate for provincial governments to apply RZWP3K (Rencana Zonasi Wilayah Pesisirdan Pulau-pulau Kecil – ‘Coastal Area and Small Island Zone Planning’)to respective regulations. This mandate was amended by Law 23–2014 on regional governments, which requires each province to issue a provincial regulation to govern RZWP3K, and more recently Law 11–2020 which stipulates the integration of RZWP3K into RTRWP (Rencana Tata Ruang Wilayah, ‘Spatial Planning’). As a provincial issue, the issue of zoning is discussed further in Chapter 3. Investment The government is very interested in attracting and promoting inward investment. Investment is a driver of industry growth and development with associated public benefits including employment. The government can also generate revenue and taxes from the involvement in projects. In line with industry development objectives, investment in seaweed processing plants and farms is a priority for the government. Investment is promoted through a large number of activities, forums, and trade shows at an international and local level. An underlying aspect of investment promotion is to provide an investor-friendly or a business-enabling environment including areas relevant to business processes (e.g. registration), preferential policies (e.g. tax treatment), and the clarification and harmonisation of laws. To draw together these disparate and sometimes controversial objectives and mechanisms, China has used an Omnibus instrument to guide investment in Indonesia, known as the Job Creation Law 11–2020 (UU Cipta Kerja), enacted by the Indonesian president in November 2020. The Law aims to attract investment, generate employment, and stimulate the Indonesian economy by simplifying the licensing process and harmonising various laws and regulations. While the Omnibus 70 Waldron, Langford, Pasaribu et al. Law provides a high-level, over-arching framework that transcends specific industries, it amended 76 laws that related to seaweed (Permani et al., 2023). This includes Law 32–2014 on the sea, Law 18–2012 on food, Law 31–2004 on fisheries, Law 23–2014 on regional governments, Law 7–2007 (amended by Law 1–2014) on the management of coastal areas and small islands, and Law 33–2014 on Halal assurance. In 2021, the Indonesian government enacted 49 implementing regulations to the Omnibus Law (Permani et al., 2023). Conclusion This chapter outlined the historical development of the seaweed industry that has led to current industry structures. While it is argued that most developments have occurred in a bottom-up way led by economic agents, it also outlines the plans and measures that industry and government actors are making to meet future challenges and objectives. While these measures seem significant at the (national) level of analysis, they may be unrecognisable at the local levels which are the subject of subsequent chapters. Notes 1 See Kalimajari (2016), Neish (2015), Mulyati et al. (2020), Porse and Rudolph (2017), Wright (2017), Neish (2007), Zamroni and Yamao (2012), Suadi and Kusano (2019), Yulisti et al. (2021), Sutinah et al. (2018), Hogervorst and Kerver (2019); Porse and Ladenburg (2015). 2 Several individuals were instrumental in the development of the industry. These included foreign scientist-entrepreneurs (Hans Porse and Iain Neish) and a founder of the Indonesian industry known as the seaweed politician, Sulfahri Aziz (also known as Sulfahri Hussain). 3 Other strategic plan documents from ministries include: Ministry of Marine Affairs and Fisheries Strategic Plan 2020–2024, Ministry of Industry Strategic Plan 2020–2024, and the Coordinating Ministry for Maritime and Investments Affairs Strategic Plan 2020–2024. Prior to the 2018 Presidential Decree, notable documents include the Revitalization Program for Agriculture, Fisheries, and Forestry (Program Revitalisasi Pertanian, Perikanan, dan Kehutanan) initiated by the President of Indonesia in 2005, the Acceleration of Fisheries Industry Program (Inpres No. 7 Tahun 2016, Percepatan Industri Perikanan), and Presidential Regulation No. 3 of 2017, which focuses on the development of non-food industries using seaweed as a raw material. 4 Key research centres supported by the central government include the Research Institute for Seaweed Culture in the Gorontalo Province, the Agency for the Assessment and Application of Technology (BPTP), Institute for Marine Socio-Economic and Fisheries Research, the Indonesian Institute of Science and the Indonesian Institute of Science Centre for Oceanography Research. International centres include the Southeast Asian Regional Centre for Tropical Biology and the Tropical Seaweed Innovation Network. Other research centres are located in Lombok, Bali, and South Sulawesi. The latter includes the Centre of Excellence for Seaweed at Hasanuddin University and a Public Agricultural Polytechnic in Pangkep. 5 These are CV Jala Ganggang, PT Sindo Serene International, PT Mega Citra Karya, PT Rika Rayhan Mandiri, CV Mitra Sejahtera, PT Central Pulau Laut, and CV Guna Bahari. The Indonesian seaweed industry 71 6 These differ from estate crops (cocoa, rubber) or staple crops (wheat, rice) where there are centralised, corporatised, or state-led marketing systems. For detailed analysis of market structures for six different commodities see InterCAFE (2018). 7 The InterCAFE (2018) found all six commodities studied to be characterised by oligopsony or oligopoly structures. 8 For example, an industry association seeking market intelligence asked a trader on a Friday what their prices would be next week. The answer was “I don’t know, the Chinese haven’t bought yet.” The trader was waiting until then, because it would be too risky to set up a purchase order in case prices moved against them. 9 For example, Chinese Indonesians have established seaweed processing plants in West Java (Gumindo, Galic Artha Bahari, Hydrocolloid Indonesia), East Java (Algalindo Perdana, Seatech Carrageenan, Amarta Carrageenan) and South Sulawesi (Cahaya Cemerlang, Giwang Citra Laut, Wahyu Putra Bimasakti, Anugerah Mapan Jaya Hydrocolloid). 10 For an account of a well-known Chinese-Filipino entrepreneur see Gargan (1995). 11 For carrageenan seaweeds, moisture content must be a maximum of 38 per cent with a clean anhydrous weed (CAW) yield of 50 per cent minimum and a maximum of 3 per cent impurities. The standard goes on set requirements for proper handling techniques in harvesting, drying, packaging, labelling, and storage. 12 They include Banti Murung Indah, Algalindo Perdana, Amarta Carrageenan, Centram, Cahaya Cemerlang, Galic Artha Bahari, and Gumindo 13 Reconciliations are based on trade statistics from UN Comtrade for raw dried seaweed (HS code 121221), thickeners not confined to but dominated by carrageenan (HS code 130239), and domestic processing statistics of the Ministry of Industry (Kemenperin, 2022). Conversion from RDS to a generic carrageenan product (average for ATC, SRC, and RC) is based on a coefficient of 4:1. 14 The policy and outcomes for seaweed industry policy resemble those used in the Indonesian cocoa industry, where in 2010 exports taxes were imposed to encourage domestic processing and resulted in investment from MNCs (Harrison-Dunn, 2015). Another parallel is Russia’s industry policy settings which discourage the export of raw timber (export tariffs) in order to encourage domestic wood processing (Ekstrom, 2014). The provinces use similar industry policies, Nusa Tenggara Timur (NTT) province for beef cattle (Waldron et al., 2016) seaweed (Langford, Turupadang et al., 2022; Langford, Turupadang, and Waldron, 2023). 15 The Ministry of Industry (Kemenperin, 2022) list policies to encourage downstream processing: tax allowances, deductions for research and development, and vocational training costs, exemptions for machinery for industrial development and using commodity balance sheets to expedite export and import approvals. 16 These are in the South Sulawesi Province (Luwu Timur, Janeponto, Bone), South East Sulawesi (Bombana, Buton, Buton Tengah), Gorontalo, North Kalimantan (Tarakan), and Maluku Utara. 17 See, for example, information on the Kendal Industry Park/Special Economic Zone. https://www.kendalindustrialpark.co.id/page/index/17/special-economic-zone?p=1 18 A list of 52 seaweed processors and exporters in South Sulawesi were reported by the Makassar Agricultural Quarantine Agency (2023). 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Zhang, Jing, Scott Waldron, Alexandra Langford, Boedi Julianto, and Adam Martin Komarek. 2023. “China’s Growing Influence in the Global Carrageenan Industry and Implications for Indonesia.” Journal of Applied Phyconomy. https://doi.org/10.1007/ s10811-023-03004-0 DOI: 10.4324/9781003183860-5 3 The South Sulawesi seaweed industry Radhiyah Ruhon, Scott Waldron, Zannie Langford, Adam Komarek, Jing Zhang, and Eko Ruddy Cahyadi Chapter 2 explored how Indonesia has worked to support the development of the seaweed industry through national investment in production, marketing, processing, and research. This chapter focuses on the provincial level, on South Sulawesi Province. South Sulawesi is the largest seaweed-producing province in Indonesia and the home of the case study villages analysed in Part II of the book. This chapter outlines the features of the South Sulawesi seaweed industry, including production, trade, processing, and export. Establishment of the seaweed industry in South Sulawesi South Sulawesi has a long history as a hub of maritime routes. Several ports along the west coast of South Sulawesi have serviced international trade since the 16th century (Hadrawi 2018). Seaweed was exported from South Sulawesi from the 17th through to the 19th century. Makassar Port continued as a major export hub throughout the 20th century (Naval Intelligence Division 1944; Soegiarto and Sulustijo 1981). These exports included wild seaweed stock from Makassar waters and the other islands around Sulawesi (Brugman 1882) and as far as Australia (Pelras 1996). China and Japan were direct export destination countries at that time, while Singapore and Hong Kong became transit countries for products exported to the United States and a number of European countries. Increasing global demand for agar led to the expansion of harvesting of agarbearing seaweeds in Indonesia, however this was interrupted by the outbreak of World War II (Soegiarto and Sulustijo 1981). In the 1960s and 1970s, four ports in Indonesia exported significant volumes of wild-harvested seaweed, including Makassar (Figure 3.1). Farming of Kappaphycus alvarezii (known colloquially as ‘cottonii’) was successfully achieved in Indonesia for the first time in the 1980s (as described in the Preface). This was followed by investments in seaweed production and processing in several sites in Indonesia (Chapter 2). However, these initiatives did not initially identify South Sulawesi as a central location for the development of the seaweed industry (Hatta and Purnomo 1994; Soegiarto and Sulustijo 1981). Only 10–20 per cent of the total volume of (wild-harvested) seaweed exported from Ujung Pandang in Makassar Port originated from the waters of South Sulawesi (Mubarak 1980). This chapter has been made available under a CC-BY-NC-ND license 84 Ruhon, Waldron, Langford et al. - 20,00,000 40,00,000 60,00,000 80,00,000 1,00,00,000 1,20,00,000 1,40,00,000 - 5,00,000 10,00,000 15,00,000 20,00,000 25,00,000 30,00,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019202020212022 Seaweed Value (Millions, IDR) Seaweed Annual Production (Wet Weight, Ton) Seaweed Annual Production Others Luwu Utara Bantaeng Luwu Timur Bone Bulukumba Jeneponto Pangkep Wajo Luwu Takalar Value (Unit million Rupiah) Figure 3.4 Seaweed production from top ten seaweed-producing districts in South Sulawesi from 2006–2022 All data from DKP Prov. SulSel. The South Sulawesi seaweed industry 85 2009 and reaching 40,947 RTP in 2014. These numbers fluctuated and decreased to 33,589 in 2022. As an indication of profitability, Komarek et al. (2023) indicates that farmer average total costs (including variable costs, cash fixed costs, and non-cash fixed costs) were Rp. 6,867/kg of raw dried seaweed. Farmer operating profit was Rp. 27,633/kg of raw dried seaweed. Seedling costs were the main cost incurred by seaweed farmers. The experiences of farmers in Pangkep highlight the challenges of extreme weather conditions and marine space conflicts faced in seaweed production. Extreme weather conditions such as high rainfall (which may be exacerbated by climate change) frequently result in production losses. The farmers expressed concern regarding the adverse impact of these environmental factors that alter temperature and precipitation and have a severe impact on cultivation (see Chapter 6). Another Figure 3.5 Map of household participation in marine farming in South Sulawesi Source: Authors’ schematic. Data provided by DKP Sulsel 2023. 86 Ruhon, Waldron, Langford et al. challenge identified by farmers is related to sea space conflicts between farmers and other stakeholders. As seaweed farming has expanded extensively, there is a lack of formal governance in relation to zoning regulation. An absence of clear guidelines and boundaries has led to conflicts arising from competing interests and disagreements over suitable farming areas (see Chapter 5). Overall, the official statistics indicate that seaweed production in South Sulawesi has been buoyant but has fluctuated and levelled off in recent years. The remarkable farm-gate price increases of 2022 impacted not only the livelihoods of the farmers, but also the motivation to develop the trading and distribution of seaweed products. Discussion will now turn to the trading of seaweed products in South Sulawesi, where the seaweed is distributed by several actors prior to entering the domestic and international market. Distribution The seaweed industry in South Sulawesi operates through a complex network of trading channels involving various key actors. The main actors at this stage are the collectors/traders who act as intermediaries and distribute the seaweed from the locals to the domestic or international market. In South Sulawesi, like many other areas in Indonesia, local traders will purchase the raw dried seaweed from the farmers and aggregate it into a certain volume before selling it on to regional traders. Local traders may be required to redry the seaweed when the purchased seaweed does not meet the required moisture level of 38 per cent (Badan Standardisasi Nasional 2018). This usually happens when the product comes from other regions or another province. The local traders operate by maintaining a close relationship with the farmers by providing them with inputs (seeds, ropes, to reduce operational costs) and technical support. In return, the farmer will sell their harvest to the trader. The relationship between the farmers and the local traders is considered mutual as the traders provide a steady market and the farmers provide the local traders with a consistent supply. The relationship between the key actors may promote trust, reputation, and long-standing connections (Zamroni 2021; Langford et al. 2024; Waldron et al. 2022). According to BPS (2022), around 94.78 per cent of seaweed households sell their crops to local traders/collectors, while the rest is sold to other farmers (2.48 per cent), exporters (1.77 per cent), and others (1.41 per cent). Others includes selling to processing industries, restaurants, cooperatives, or directly to other parties. Most of the transactions between farmers are in the form of propagules (Langford et al. 2024). The percentage shown by BPS also indicates that the direct purchase of seaweed products from farmers by local processing industries appears to be limited. This trend is similar to that in a study by Neish in 2007–2008, which suggested that in South Sulawesi, almost all farmers interviewed chose to sell to local collectors (Neish 2013). The most common reasons were price (100 per cent) and kinship (88 per cent). Results obtained by PAIR, suggest the main reason (60 per cent) farmers prefer to sell to collectors is that collectors often provide credit (Langford et al. 2024). Another key actor in the trading network is the broker/middleman, a level of local traders who work as an extension of large traders or companies, either as The South Sulawesi seaweed industry 87 local traders or as an individual who goes to the village door-to-door making trading offers to the farmers (Komarek et al. 2023). This type of actor was common in Laikang village, which may be due to the vastness of the area and the high number of seaweed farmers in the region. In Pitu Sunggu, the farmers mentioned that a number of local traders/collectors had established branches or worked together with small collectors in adjacent villages. These alliances mean they are able to purchase more local produce, preventing it from falling into the hands of competitors who also operate in the same villages. This extension of the network is usually a member of the trader’s family who lives in the next village. In the context of South Sulawesi, 2022 witnessed a significant increase in the farm-gate price of dried seaweed. The increased price motivated an increase in farmers and traders in several districts, including Pangkep. In Pitu Sunggu, the farmers associated the higher price with the new traders as it encouraged competition between new and established traders. It was also assumed the new traders would promote more transparent pricing. The 2022 farm-gate price of dried seaweed may, however, have presented opportunities and challenges for seaweed farmers in South Sulawesi. Although farmers benefitted from higher income and profit, the increasing demand during this period led to unsustainable practices such as premature harvesting or overexploitation of environmental resources. These practices resulted in a market oversupply and was followed by a price crash. Regional collectors act as middlemen between local traders and the larger traders/exporters or processing companies. They play a vital role in ensuring that seaweed products make their way smoothly along the distribution line. In South Sulawesi, regional traders mostly reside in Makassar, Maros, and Takalar City, close to the big port in Makassar. Similar to local traders, the regional traders may also conduct repacking and redrying (if necessary) and storing. Because of the many sources/channels of RDS products, quality control is a critical part of the operation of the regional trader who is the last gate for the product before entering the export market. If the seaweed does not meet quality standards, the regional trader may negotiate a lower price or reject the batch altogether. Regional traders/ collectors are also aware of the different requirements and preferences of export destinations. For instance, certain countries may require specific product quality standards or have specific packaging regulations (Komarek et al. 2023). In South Sulawesi, many of the regional traders/collectors have a large amount of capital and may trade in other marine-derived products in addition to seaweed. Where the main trading product is seaweed, the regional collector will usually trade in a number of seaweed species such as cottonii, Gracilaria, sacol, and spinosum. The RDS is also collected from Kalimantan and several regions in Eastern Indonesia (Komarek et al. 2023). Regional traders will organise the shipment of goods to customers either in Indonesia or overseas. Some of these regional traders are individuals who are affiliated to processing companies (Zamroni 2021). In 2022 local traders purchased seaweed from farmers for Rp. 37,150/kg and on sold the seaweed for Rp. 43,320/kg (Table 3.1). A margin of Rp. 6,170/kg for the local traders included Rp. 1,098/kg in costs related to payment to collectors, labour, and transportation. 88 Ruhon, Waldron, Langford et al. Processors The seaweed processing industry plays a vital role in transforming RDS into various value-added products for domestic consumption and international trade. The RDS is supplied by local and regional collectors in South Sulawesi as well as by other traders from different provinces. Similar to the relationships that are built between farmers and local traders, processing companies also prefer to buy products from trading partners. Trust and a common understanding have been built in relation to the quality of the seaweed needed by the processing companies. If the collector is negligent or intentionally engages in harmful marketing practices (such as mixing seaweed with salt or other foreign matter), the collector will be blacklisted by the company. During the course of this research, cases of fraudulent collectors were common in Jeneponto and Takalar. It was also a topic of conversation among local traders in Pitu Sunggu where they expressed concern that these practices would undermine prices and could impact the trust relationships. Product quality relates to impurity, humidity, and gel content which follows Standar Nasiona Indonesia (SNI) standards (SNI 2690: 2018) that have been set by the government. At this stage, RDS is then processed into ATC, SRC, or RC. These products, together with unprocessed RDS, are then exported or used in domestic industries that utilise carrageenan. It is estimated that nationally around 80 per cent of raw dried seaweed is exported (Ratnawati et al. 2020; Anggadiredja 2017), and the rest of the product is processed domestically before being exported or used in domestic processing (Anggadiredja 2017). As of 2023, there are around seven seaweed processing companies in South Sulawesi (DKP Prov. SulSel 2022c, 2023c; BBKP, 2023). These processors mostly specialise in the production of agar or carrageenan (Rimmer et al. 2021). One of the main companies in South Sulawesi is PT. Biota Laut Ganggang (BLG) in Pinrang, which specialises in carrageenan production, positioning itself as the largest seaweed company in the world in that segment (Kukarpaper 2022). The company has a long history and has experience in seaweed research and development that can be traced back to 1996. Since its establishment in Pinrang, the company has expanded its production quantities (Pratiwi 2022). In 2019, the company had a production capacity of 100 tonnes per day for powdered seaweed. However, the available supply of seaweed as a raw material was only 50 tonnes per day (sourced from South Sulawesi and East Kalimantan), which resulted in a shortage of raw materials for BLG’s production (Pemprov Sulsel 2019; Alfarizi 2019). At the time, BLG employed around 510 employees, with more than half of those employed being locally recruited (Sulfiani 2022). As of 2023, the number of employees at BLG is 735 people, and raw material requirements have increased to 150–200 tonnes per day. In 2022, around 70 per cent of this daily quota was being met, leaving up to 30 per cent of the quota unfilled (Kukarpaper 2022). The company exports its powdered seaweed to countries such as China, the United States, Europe, and Malaysia. For the development of the South Sulawesi seaweed industry, the presence of BLG is considered to have been of benefit as it appears to have encouraged an increase in the seaweed price (Langford et al. 2022). It has also given rise to The South Sulawesi seaweed industry 89 increased job opportunities for the local residents (Sulfiani 2022), improvements to roads and other infrastructure adjacent to the industry, guaranteed adherence to price standards, and an end to local buyers manipulating prices (Sulsel 2020). The challenges faced by BLG are related to a limited supply of RDS which has been a problem for other processing companies in previous studies investigating the challenges and threats faced by processors (van der Heijden et al. 2022; Soethoudt et al. 2022). Other problems include the inconsistent supply and low-quality of raw materials, which affects the overall quality of the end product. The factories also struggle to operate at full capacity. High transportation costs between islands and long waiting times also pose difficulties. There is strong competition from Chinese buyers who also purchase dried seaweed, and from hydrocolloid producers in other countries. The processors also may have limited experience in exportation to highend markets and struggle to meet the specific requirements of those markets. Most of the seaweed exported still consists of raw materials (Sesditjen DJPB KKP n.d.). This means that the economic value adding from seaweed processing is relatively low (although value adding through improved drying practices is undertaken by some companies (Langford, Turupadang et al. 2023). As a comparison, PT. Bantimuring Indah (PT. BI) is a smaller processing company based in Maros which was established in 1985 as a cracker factory using shrimps as raw material. In 1986, it started processing Gracilaria product in collaboration with Japan. By 1989, the company switched to processing cottonii to produce ATC and SRC. In 2017, it briefly produced Gracilaria-based products for a year. More recently it has focused on the production of cottonii-based products (SRC), having a production capacity of 4.8 tonnes per day. PT. BI primarily trades two containers of SRC (50 tonnes) per month on the international market, mostly to the UK, but has also supplied Russia, Argentina, and Chile in the past. The company has specifications for its raw materials, including a maximum water content of 37 per cent and impurities limited to 3 per cent. The origin of the raw material is crucial for the processing plant as buyers often require traceability to ensure quality. Buyers may even demand specific origins such as Nusa Tenggara Timur (NTT), Nusa Tenggara Barat (NTB), and Maluku. In an interview with the Head of Plant on March 2023, it was disclosed that PT BI purchased seaweed from Jeneponto and Bone at a price of Rp. 34,000/kg. When sourcing from outside South Sulawesi, the price increased to Rp. 35,000–36,000/kg, including transportation costs. Surprisingly, only 30 per cent of their raw materials currently derive from within the province (Jeneponto, Bone, Pangkep, and Maros), with the remaining 70 per cent sourced from elsewhere. The company has identified a significant decline in seaweed quality within South Sulawesi, especially in relation to gel strength. The minimum gel strength required is 700g/cm2, but seaweed from South Sulawesi typically averages between 500g/cm2 and 600g/cm2. The decline in quality can be attributed to various factors such as when farmers harvest seaweed earlier than is optimal, especially when there is high demand for raw material and during changing oceanic conditions (Langford, Waldron et al. 2023). Some exporters prioritise dry levels over gel strength and are willing to purchase any seaweed that meets the dry-level requirement. Additionally, poor handling practices by collectors, 90 Ruhon, Waldron, Langford et al. who mix seaweed from different origins and harvest ages, contribute to the decline in quality. In some cases, collectors even use salt to expedite the drying process, further deteriorating the quality of the raw material. At the processing level, processing techniques and the quality of seaweed influence prices and costs; however, a detailed decomposition of margins for processors is unavailable. Figure 3.6 provides an indication of the value of products produced at different stages of the carrageenan supply chain. Margins are composed of both operating costs and profit. Operating costs probably contribute to the size of the margin due to the fixed and variable costs of seaweed processing (rather than the physical movement of the product along the chain). The yield of carrageenan (ATC, SRC, and RC) extracted from carrageenan seaweed (RDS) is shown in Figure 3.7, however this can be influenced by the processing technique and the quality of the raw materials. For instance, processing 1,200kg of RDS would result in a production output of 400kg of ATC, 300kg of SRC, or 240kg of RC. In terms of production costs, raw materials account for approximately 75–80 per cent of the total cost, followed by labour costs at 10–15 per cent, with chemical and energy costs each accounting for 5–10 per cent. Profit margins, as estimated by the processors interviewed, ranged between 10 and 20 per cent, with an average of 15 per cent. Provincial export There are an estimated 52 seaweed exporters in South Sulawesi Province (DKP Prov. SulSel 2021; BBKP 2023). The export of seaweed from South Sulawesi has generally increased over the last decade (DKP Prov. SulSel 2021). Figure 3.8 reports statistics on the weight of RDS exported over the decade 2012 to 2022 and Refined Carrageenan (RC) Semi‐refined Carrageenan (SRC) Alkali Treated Chips (ATC) Raw Diried Seaweed (RDS)Rp. 40000-50000/kg USD7-11/kg equivalent to Rp.103,749 -163,033/kg USD12-13/kg equivalent to Rp. 177,855-192,676/kg USD14-15/kg equivalent to Rp. 207,494-222,315/kg +Rp. 18,000/kg non-seaweedcosts +Rp. 3,000/kg milling cost Figure 3.6 Value adding of domestic carrageenan seaweed processing Source: Authors’ schematic. Data from Komarek et al. (2023). The South Sulawesi seaweed industry 91 average prices. The weight of exports trended up over the period with a slight decline from 2015 to 2018, a spike in 2019, and a levelling-out over the COVID-19 pandemic years of 2020–2021. While weights increased slightly in 2022, prices surged, which led to a large increase in value exported. Figure 3.9 presents the same indicators (weight, value, and average price) but on a monthly basis to show variation in a single year (2022). There were slight fluctuations in the weight of seaweed exported. Average derived prices varied more over the year, with a peak in August 2022 which accurately reflects reports from the field where the farm-gate ~1.33:1 Wet Seaweed Raw Dried Seaweed (RDS) 38% MC Alkali Treated Cottonii (ATC) Semi-Refined Carrageenan (SRC) Refined Carrageenan (RC) Drying Alkali treatment Milling Alkali treatment + milling Carrageenan extraction ~3:1 ~4:1 ~5:1 ~7.5:1 Wet seaweed to final product ratio ~22.5:1 Wet seaweed to final product ratio ~30:1 Wet seaweed to final product ratio ~37.5:1 Figure 3.7 Rates of conversion of seaweed into other products Source: Authors’ schematic. Data from Komarek et al. (2023). ‐ 0.5 1.0 1.5 2.0 2.5 ‐ 50 100 150 200 250 300 350 2012 2013 2014 2015 2016 2017 201820192020 20212022 AveragePrice (USD/Kg) ExportVolume (Kilotonnes),Value($ millions) Year AveragePrice (right axis) ExportValue (leftaxis) ExportVolume (dry weight,lef t axis) Figure 3.8 Weight, value, and average price of all types of seaweed exports from South Sulawesi, 2012–2022 Source: Realisasi Pembangunan Perikanan Sulawesi Selatan Tahun 2012–2021. pdf and Data Expor Perikanan 2022 DKP.pdf, released by DKP Prov. Sulsel Note: total export volume representative for all types of seaweed products, accounted in dry weight (different from the released data for the production which is represented in wet weight, personal communication, April 2023) 92 Ruhon, Waldron, Langford et al. price reached Rp. 48,000/kg (prices in Makassar peaked at Rp. 50,000/kg), the highest in industry history. Prices then declined at the end of 2022 and into 2023. For the last 20 years, China has been the major export destination for South Sulawesi’s seaweed products. According to BKIPM, more than 70 per cent of the total exported seaweed from South Sulawesi has gone to China each year since 2018 (BKIPM Statistik 2023). Previous studies have highlighted that the price paid for seaweed in Indonesia was largely driven by demand from China, where the bulk of the processing occurs. This has caused the domestic price to be generally lower than the average global price (Rimmer et al. 2021; Langford et al. 2022). With the increasing demand for seaweed product in the global market, the Indonesian government is trying to dominate this market by encouraging the development of the industry through several policies and targets being set for the South Sulawesi seaweed industry. South Sulawesi seaweed policy The national government has enacted a wide range of policies aimed at the seaweed industry (see Chapter 2 and Appendix 1). Provincial governments also play a role in policy-making by enacting higher-level policy and developing policies within their jurisdiction. These are outlined briefly below. South Sulawesi Province does not yet have an over-arching equivalent of the national government “Roadmap” for the provincial seaweed industry, however, industry policies are collated in policy documents. For example, South Sulawesi Province states that provincial programmes (in 18 districts/cities) should support seaweed production through inputs (superior propagule production through tissue culture programmes) to post-harvest handling (DKP Prov. SulSel 2022d). To promote collaboration within the provincial government, the KKP established the seaweed aquaculture fishing village in Laikang village, located in Takalar Regency of South Sulawesi (ANTARA News Makassar 2022). 0.0 0.5 1.0 1.5 2.0 2.5 3.0 ‐ 5 10 15 20 25 30 35 40 45 JanuaryFebruaryMarch AprilMay June July AugustSeptember OctoberNovemberDecember AveragePrice (US$/kg) ExportVolume (kilotonnes), Value($millions) AveragePrice (Rightaxis) ExportValue (Leftaxis) ExportVolume (Dryweight,Lefta xis) Figure 3.9 Weight, value, and average price of all types of seaweed exports from South Sulawesi by month Source: Data from Trade Agency and BKIPM Sulsel and prepared by DKP Sulsel. Average prices are derived from total values and weights. The South Sulawesi seaweed industry 93 Further downstream, there are also programmes to support the establishment of new seaweed processing plants in South Sulawesi, in Bone, Jeneponto, and Luwu Timur. These plants will be required to obtain processing feasibility certification, Hazard Analysis and Critical Control Point (HACCP) certificates for health, and other certification for export or domestic distribution (Ningsih 2020). The government is also involved in various programmes to support exports. In 2016 the Sea Toll programme was developed to facilitate inter-regional distribution of seaweed within Indonesia, including supplies from South Sulawesi (Saputra 2023; Sesditjen DJPB KKP n.d.). Furthermore, the provincial government’s commitment to supporting the industry is evident through several strategies, for example by adopting the recommendation of Omnibus Law No. 11 of 2020 in the South Sulawesi Provincial Spatial Plan (RTRW) for 2022–2041. These recommendations are aimed at easing business and investment license registration to attract foreign investment. The government has also partnered with the Ministry of Investment (BKPM) to promote South Sulawesi’s seaweed industry as one of the targeted development projects in the Investment Opportunity Map (PPI) 2022 (Nooca 2022). Amongst all the policy areas relevant to seaweed, provincial government has jurisdiction over zoning. The management of coastal areas and small islands is governed by Law 7/2007, which gives provincial governments the authority to implement regulations for coastal areas and small island zone planning (Permani et al. 2023). As such, the South Sulawesi provincial government issued two regulations: the Spatial Planning Plan (RTRW) 2009–2029 and the Coastal and Small Island Zoning Plan (RZWP3K) 2019–2039. These were later superseded by a new regulation (Regional Regulation No. 3 of 2022 concerning Regional Spatial Plans, 2022–2041).1 Conclusion Seaweed collection and exports have been practised in South Sulawesi since ancient times when South Sulawesi served as a global trading hub. Seaweed cultivation began in the early 1980s and increased during the 21st century. The organic, bottom-up growth has led to a sophisticated web of interactions at the community level and an atomised supply chain populated by a large number of actors. Industry growth has attracted the attention of corporate actors (processors and export companies) and government. This is reflected in the enactment of several policy initiatives, although policy attention can be expected to grow as the industry encounters new growth-induced challenges and opportunities. This includes availability of seedlings, volatile prices, labour shortages, ecological problems, conflicts over sea space, and the objectives of local government to promote value-adding and employment. While higher levels of government play a role in addressing these issues, it is imperative that policy is based on detailed and robust information from the local level such as the data on costs and prices encountered by supply chain actors presented in this chapter. It is suggested that decisions that require knowledge of the local and commercial environment should be vested in the local-level agents. The importance of understanding local context is explored in subsequent chapters. DOI: 10.4324/9781003183860-7 4 Export commodity frontiers and the transformation of village life Zannie Langford, Radhiyah Ruhon, Zulung Zach Walyandra, and Risya Arsyi Armis Agrarian change in Pitu Sunggu On a sunny day in Pitu Sunggu, we meet with Pak Cakra at his home near the coastline. The walls are freshly painted a sky blue, ornate furniture decorates the home and an impressive array of biscuits and sweets sit on the table. There are new frilly green curtains hanging over the windows and a fish tank with several goldfish. The house is not new, however. It was built with a large attic to fill with rice after the harvest. But nobody here along the coastline farms rice anymore. The rice fields were converted into shrimp ponds in the 1980s and 90s when tiger prawn prices were high, and now house milkfish and whiteleg shrimp, and most people make their living from the sea farming seaweed. There are signs of wealth all around the hamlet, with new and ornately decorated houses, new motorbikes, and many people doing well. Pak Cakra explains how he started farming seaweed when the price was just Rp. 8,000/kg, and watched it go up – 11,000, 12,000, 13,000, 14,000, up and up, 22,000, 23,000 … now, he says, the price is Rp. 33,000/kg – so times are good for seaweed farmers.1 Pitu Sunggu is a place that has seen rapid and widespread transformation of its landscape at several points in time. Some people have done very well out of these transformations, adapting entrepreneurially to new circumstances. Others have had to move around to find work, selling their labour to landowners in the village and its surrounds or moving to other islands. The last century has seen landscapes transformed from mixed agriculture to rice fields, from rice fields to shrimp ponds, and over the last decade, the sea from communal fishing grounds to private seaweed farms. These rapid transformations, pulled along by broader developments in global value chains, have changed livelihoods in agrarian households. They have led to shifting diets, education levels, gender roles, housing, infrastructure and transport, migration and labour use. This chapter describes the history of agrarian transformation in Pitu Sunggu from the perspective of village residents. Information gained through oral histories with older residents of the villages is triangulated with historical maps, statistical information, and published literature to describe the history of export-orientated agrarian change in the village. This history illustrates the series of agricultural transitions and changes in land ownership which enabled some residents to enthusiastically take up seaweed farming and claim extensive rights to the sea in the early This chapter has been made available under a CC-BY-NC-ND license 102 Langford, Ruhon, Walyandra & Armis 2000s. Others persisted with established livelihood activities and were left behind on this unexpected new frontier of sea space enclosure. These patterns shaped the way that the current industry is organised and the different livelihoods that people draw from it. Pitu Sunggu village This section of the book focuses on our case study location of Pitu Sunggu, a small village on the coastline of Pangkajene dan Kepulauan Regency, a few hours’ drive north of the provincial capital of Makassar. The population of Pitu Sunggu at the end of 2022 was around 2,108, divided into 613 households, 181 of which farm seaweed. The village is divided into three hamlets (Figure 4.1): the coastal hamlet of Pungkalawaki, where the majority of seaweed is farmed; the inland hamlet of Bonto Sunggu, where residents farm little seaweed but own large areas of agricultural land; and the central hamlet of Kampung Baru, a settlement built in the 1970s between the Sidenreng River and the road, whose residents have traditionally worked as traders and who are now heavily engaged in seaweed farming (Table 4.1). Our survey of 96 out of a reported 136 seaweed farmers (at the commencement of the research) in the village found that 55 were located in Pungkalawaki, 36 in Kampung Baru, and 3 in Bonto Sunggu. Few are located in Bonto Sunggu, due to both the inland location of this hamlet and the larger landholdings of this cohort. Figure 4.1 Layout of the village with three hamlets Source: Map created by Risya Arsyi Armis using ArcMap. Land cover based on maps of village available in office of village head, combined with analysis of satellite imagery and triangulated with published information. Export commodity frontiers 103 Table 4.1 Overview of Pitu Sunggu hamlets Pungkalawaki In the coastal hamlet of Pungkalawaki, residents live along a road running parallel to the coastline and the riverbank close to the river mouth. Most residents are seaweed farmers or fishermen, and some also have brackishwater ponds in which they grow shrimp and fish. Pungkalawaki was historically a remote hamlet until roads were improved in the 1970s. This area was converted to brackishwater ponds as rice fields near the coast salinised. Most seaweed (67 per cent) produced in Pitu Sunggu is from Pungkalawaki farmers, who access the sea via a coastal pier. Before commencing seaweed farming, 67 per cent of Pungkalawaki seaweed farmers had ponds and 80 per cent undertook marine fishing. Pungkalawaki people have a history of working at sea. Bonto Sunggu The inland hamlet of Bonto Sunggu is located nearest to a main road and fresh water source, and the residents grow rice and vegetables. It has historically been the central settlement in the village as a result of its proximity to the main road, and residents here have historically owned large areas of the agricultural land in the village. It was the site of an Oxfam project to develop organic vegetable and rice farming in the region from 2010–2015, and these agricultural activities continue today in a small area of Bonto Sunggu (see Muchtar, 2017). Bonto Sunggu has a fresh water source and land use is a combination of shrimp and fish ponds, rice fields, and forest. Very little seaweed farming is currently undertaken by Bonto Sunggu residents. Residents typically own agricultural land which they use primarily for pond farming. We located only seven seaweed farmers from this hamlet during our longterm fieldwork, and just three of these appear in the household survey. Kampung Baru Kampung Baru (literally translated as ‘new village’) is the most recent hamlet in the village. It is located between Pungkalawaki and Bonto Sunggu and on the banks of the Sidenreng River. Residents of this village moved to this location from their previous location amidst the rice fields which was known as ‘Bonto Baddo’. Bonto Baddo had limited access to roads, rivers, or sea, and residents report that poor roads made transporting goods in and out difficult. Government road projects in the 1970s improved the roads in Pitu Sunggu and Bonto Baddo residents abandoned their previous site and moved to live along the new road, forming the new hamlet of Kampung Baru. With access to the sea via the river, many residents took up work as fishermen or seaweed farmers. They typically hold limited land areas and were traditionally seen to have poorer access to education and employment than the residents of the other hamlets, but have recently experienced growth in wealth as a result of seaweed farming. Around 26 per cent of the seaweed produced in Pitu Sunggu is produced by Kampung Baru residents. Before commencing seaweed farming, just 11 per cent of Kampung Baru seaweed farmers had ponds, 64 per cent undertook ocean fishing, crab netting, or clam collecting, and 33 per cent undertook neither of these activities, instead working as traders of fisheries products or undertaking off-farm work. The lack of agricultural land holdings by people in this village may have increased uptake of seaweed farming by people in Kampung Baru, and as a result of their early adoption, they now own large areas of sea space and have rapidly increased their wealth over time. 104 Langford, Ruhon, Walyandra & Armis Land use change in Pitu Sunggu Over the last century, Pitu Sunggu village has undergone a series of landscape transformations which reflect broad changes that have occurred along much of the coastline in the area. A series of historical maps combined with recent satellite imagery (Figure 4.2) shows the repeated transformation of land use in the region over the last century. Historical maps illustrate land use in the village at four points in time: in 1917 prior to large scale clearing of the land for rice fields the landscape was probably used for mixed agriculture including palm trees and bamboo; in 1925 when the landscape had been transformed into rice fields; in 1981 when the conversion of the land to brackishwater ponds began along the coastline but did not at that point reach inland areas; and in 2022 when the area was almost entirely used for brackishwater pond farming and seaweed farming (Figure 4.1). These historical maps reflect several distinct periods of agricultural land use in the village which are described in the following sections. The early history of Pitu Sunggu Pitu Sunggu sits within the regency of Pangkajene dan Kepulauan (hereafter ‘Pangkep’), as outlined in the Introduction. The area which is now Pangkep was previously part of the Kingdom of Siang, founded around 1112 AD and persisting until around 1544 (Zainal and Aprasing, 2014). The kingdom was one of the oldest and most influential kingdoms of South Sulawesi (Muhaeminah and Makmur, 2016; Zainal and Aprasing, 2014) and was the first kingdom in Sulawesi to establish trade relations with Europe (Hadrawi et al., 2019), benefitting from the use of Pangkajene River as a strategic port for trading. The kingdom declined in the mid-16th century partly as a result of the siltation of the Pangkajene River such that it was no longer suitable for anchorage for merchant ships (Hadrawi, 2018; Pelras, 1996). At the same time the nearby Gowa Kingdom was growing in strength. After the decline of the Siang Kingdom, several smaller kingdoms, including the Barasa Kingdom of Pangkajene, grew in the void, but these fell under the rule of the Makassarese Kingdom of Gowa (Makkulau, 2008). In the 1660s some of these kingdoms changed their affiliation to fall under the Buginese Kingdom of Bone, which eventually defeated the Kingdom of Gowa in the 18th century. This kingdom was subsequently governed by the Dutch East India Company (Verenigde Oostindische Compagnie (VOC)) in the 18th century. Throughout the period of VOC control through the 17th and 18th centuries, many Bugis-Makassarese people travelled to other parts of Indonesia and abroad and settled there to avoid the rule of the Kingdom of Bone and the trade monopoly of the Dutch VOC (Cribb, 2000; Drakeley, 2005). In the 19th century the decline of the VOC saw Pangkep come under the direct administration of the Netherlands government (Van Gorsel, 2022). The Dutch rule maintained local systems of power in the region, which both supported its control of the territories while simultaneously fuelling desire for independence (Cribb, 2000). In 1942 with the Japanese occupation, independence Export commodity frontiers 105 Figure 4.2 Land use in Pitu Sunggu in 1917 (top left); 1925 (top right); 1981 (bottom left); 2022 (bottom right) Source: Maps created by Risya Arsyi Armis using ArcMap. Land use data extracted from historical maps. Figure 4.2a is based on a historical map produced in 1943 from aerial photographs taken in 1917– 1918 (United States Army Map Service 1943). Figure 4.2b is based on a Dutch map produced based on aerial photographs taken in 1925. (Topografische Inrichting & Topografische Dienst 1927). Figure 4.2c is based on maps available from the Indonesian government showing the landscale in 1981–2 (Bakosurtanal 1991). Figure 4.2d was created based on triangulation of maps on display in the Pitu Sunggu village office, satellite imagery from 2023, and primary data. Administrative boundaries shown are those currently in use. 106 Langford, Ruhon, Walyandra & Armis struggles in Indonesia intensified (Cribb, 2000), and resistance movements grew in several parts of South Sulawesi, including Pangkep. Following the Japanese surrender in 1945, Indonesia proclaimed independence and in 1949 sovereignty was recognised by the Dutch after an extended process. Since then there have been several administrative changes to the organisational structure of the region, and the village names and borders in the Pangkep region. Pangkep is therefore located in a region which has historically been of strategic and economic importance. It sits at the intersection between Bugis and Makassar ethnic groups, and identification of people in the region with these two groups is often fluid and overlapping. The area that is now Pitu Sunggu was sparsely populated at the turn of the 20th century, and the first available map of land cover which informs the 1917 map in Figure 4.2 shows that in 1917–1918, the village area was primarily ‘bamboo’ and ‘palm’ (coconut), with ‘woodland’ (including mangroves) along the coasts. Rice fields were already visible on the maps in an area about 5km to the south of the village but were not identified within Pitu Sunggu. This does not necessarily indicate that no rice was grown in the area, rather that the land was probably used for mixed cropping activities which are not finely differentiated in the colonial maps. Most residents did not directly recall this period as they were not born at that time, although a few of them offered short reflections on what they knew about it. One respondent noted that ‘I heard from the old people that in colonial times, people here consumed sweet potatoes or bananas as a staple food, I heard that my grandfather ate those foods’. Several unpaved roads were present in the village, but residents reported that until the 1970s these were muddy and provided limited accessibility. According to historical maps, between 1917 and 1925 the land area of Pitu Sunggu was almost entirely transformed into rice fields, beginning a period of more than fifty years of rice farming. Rice farming Older residents of Pitu Sunggu today recall the rice farming era which began in approximately the 1920s and continued until the rice fields were converted into shrimp and fishponds in the 1980s and 1990s. This era was divided into two distinct periods – the period of field rice farming from the 1920s to the 1970s, in which a low yielding variety was grown with minimal inputs and no irrigation yielding just one harvest per year, and an intensified period which occurred after the Green Revolution in the 1970s, in which farmers grew a new variety of rice using chemical fertilisers. Field rice farming (1920s–1970s) For most of the rice farming era of Pitu Sunggu (until the Green Revolution in the 1970s), the type of rice grown was a variety of field rice known as Ase lapang. Residents recalled the flavour of this rice favourably, describing the grains as ‘big and fragrant’ with a pleasant taste. As one resident recalls, the rice ‘had hair, was tall, had a long growing period, was harvested using [a wooden tool known as] Export commodity frontiers 107 ani-ani, and yielded little’. The rice was grown in fields without irrigation, and as a result of the reliance on rainwater, cultivation for most of the fields was limited to a single crop over a three-month period in the rainy season. Buffalo were used to work the fields and their manure was used as fertiliser. Residents’ recollections of this period vary depending on their landownership status. Rice fields were unequally distributed amongst the villagers, and some of the land was owned by non-residents of the village, including residents of nearby villages and residents of offshore islands. As one resident recalls, ‘there were people from outside [the village] who owned land [here]. It depends, if people here were wealthy they might have had land, but if not, even though they lived here they didn’t have a pond or a rice field.’ Landownership was dominated by a small group of ‘rural elite’ who were able to accumulate land over time, and who were mostly residents of the inland hamlet Bonto Sunggu. The majority of residents did not have significant land holdings, and generally recall this as a difficult period when food was scarce. Residents reported mixing their rice with low-cost vegetables as the supply of rice alone was insufficient to meet household needs. As one resident recalled, We had corn and sweet potato which we cut into small pieces and then cooked. There was no other food at that time. The food was purchased at the Segeri Market and was brought to the village by carrying it on your shoulders and walking on foot. There were no vehicles at that time … all the land in the village was used for growing rice. Corn and sweet potato could not grow … [The rice fields] belonged to the villagers, but there was still not enough food. It used to be very hard, people suffered. Even the fine corn husks were eaten. There were often people who did not cook because they didn’t have any food. I sometimes feel sad when I think about the suffering of the people in the past. I will always remember that time. Small fish supplemented these starchy foods and were reportedly relatively cheap during that period. They could be obtained from rice fields where, as one resident described, ‘at that time there were no pesticides, so usually when we were working in the fields, we also caught fish’. Fish, shrimp, crabs, and clams were also caught in the sea using traditional boats and fishing methods, and these were sold at local markets. Some residents of Pungkalawaki and Bonto Baddo (the former residence of Kampung Baru people) owned rice fields, but many worked as labourers in the rice fields of others – a practice known as ma’sangki. This occurred under a profitsharing system in which the labourers would receive a portion of the harvested rice. As one respondent recalled: My father was a farm labourer [on a] rice field [owned by] a resident of an island. The owner could not come to the village so he asked my father to work on his rice fields and the yield was divided in two … some [of the rice fields] are owned by people outside the village, that’s why a lot of people here are 108 Langford, Ruhon, Walyandra & Armis labourers. There are also villagers who own rice fields but there are not many of them, only certain people in the village do. It was common for women, men, and children alike to undertake ma’sangki, both within the village and outside it. One respondent described working with her parents as a child: I would work on other people’s land, in remote places, too, because we helped our parents. Because I had many younger siblings … after graduating from junior high school I went to Pinrang and Sidrap for farm work. Because I wasn’t going to school anymore – a money problem. Usually we would go somewhere for about 15 or 20 days. When the harvest in our village had finished we would move to another area for farm work, and when the work was finished there, we would move again, to another place. Around one third of Kampung Baru seaweed farmers report that prior to commencing seaweed farming they undertook off-farm work or migrated to look for work. Migration for off-farm work has been common in Pitu Sunggu historically, and many residents reported periods of ‘wandering’ to Makassar, Kalimantan, and Papua for work. During the field rice farming era, seasonal migration for work was common due to the low productivity of the field rice, as one resident described: Before, after the rice was planted, the farmers would leave it unattended and go to the cities to earn another living … many people would work elsewhere, such as being pedicab drivers in Makassar. They would return to the village when it entered the harvest season. Fortunately, at that time there were no planthopper pests. This movement was made both necessary and possible by the non-intensive nature of the field rice farming system, which was single-crop, unirrigated, with low inputs. Farmers report that they did not experience significant issues with pests at that time and attribute pest issues to increasing use of insecticides and chemical fertilisers – possibly because such inputs interfere with natural biological control mechanisms (Settle et al., 1996; Heong et al., 2014). Farmers had to move around to earn their living during this period, as one resident described: The problem was that rice fields cannot be planted all year round, only during the west monsoon season, and at that time there was no irrigation, so when the west monsoon season ended and the harvest was over, there was no other work, so I would go to Makassar. Farming activities in the period were therefore dominated by non-intensive rice farming supplemented by marine fishing and off-farm work. Rice field inputs of labour were low, fertilisers were limited to buffalo manure, irrigation was rainfed only, and rice fields once planted required little additional work until harvesting. Export commodity frontiers 109 Fish were obtained through marine fishing and fishing in rice fields, but starch needs were often unfulfilled and many residents recall this as a difficult and ‘hungry’ time. This situation continued until the Green Revolution entered the village in the 1970s. The Green Revolution (1970s) From the early 1970s, the Indonesian government encouraged the implementation of ‘Green Revolution’ technologies. The five-pronged approach included the introduction of high yielding rice varieties, chemical fertilisers, synthetic pesticides, irrigation and improved planting methods, stimulating a transition from low-input, low-productivity field rice production to high-input, high-productivity (IR8, locally known as citarung) rice production (Rahmi et al., 2020). These methods supported substantial increases in Indonesian rice production over time (Figure 4.3). In line with broader national programmes (e.g. Hansen, 1972), residents recall being ‘pressured’ by the government to carry out the directives of the Green Revolution, but also that the yields of farmers who adopted them were so much higher that soon many farmers took them up of their own volition. As one farmer described, We were not forced, but the community did not want to accept something which they did not know about … [but] after it had been proven that the new variety produced more rice, we didn’t need to be told to grow it anymore, we went along with it ourselves … after it was proven, many wanted it because it was really good … the new rice could produce up to eight tons per hectare, before we got a maximum of three tons. 0 10 20 30 40 50 60 70 Production Quantity (MT) 1960 1970 1980 1990 2000 2010 2020 Figure 4.3 Rice production in Indonesia over time Source: Data from FAO 2023. 116 Langford, Ruhon, Walyandra & Armis residents today was settled at a time when seaweed prices were much lower and the activity was much less profitable than it is today. It was taken up primarily by those who already earned their livelihoods by fishing in the sea, by those who had limited alternative livelihood activities, and by those who had the ability to invest in the new production techniques. Initially, new seaweed farmers received capital for seaweed farming from interested parties and investors from outside the village, as well as from the local government and from a non-governmental organisation. Government assistance was received in the form of training programmes, seaweed seeds, and bamboo drying platforms. Village residents also developed low-cost ways of building anchors in the sea to overcome capital shortages in the establishment of seaweed plots. Pungkalawaki residents – who live along the coastline of Pitu Sunggu – were the first to take up seaweed farming in large numbers. Results from our survey (outlined in the Introduction, and with a full account provided in Langford et al. 2024) suggest that they currently represent about 58 per cent of the Pitu Sunggu seaweed farming cohort and produce 67 per cent of the village’s seaweed (Figure 4.7). Large numbers of Pungkalawaki residents took up seaweed farming between 2005 and 2011, and our survey indicated that they are the largest seaweed farmers in the village, producing on average of 1.9 tonnes dry seaweed each in 2021. Kampung Baru residents adopted seaweed farming later and more gradually, with most farmers taking up seaweed farming between 2010 and 2019. Today, they represent 38 per cent of seaweed farmers and 27 per cent of production, on average producing 1.1 tonnes in 2021 – 40 per cent less seaweed than the average Pungkalawaki seaweed farmer. There are only a few Bonto Sunggu seaweed farmers – during 16 months of fieldwork we only found 7 Bonto Sunggu residents who had seaweed farms – but these few farmers on average produce higher volumes than those from other areas. In recent years, the price of seaweed has increased dramatically, including, roughly, doubling from Rp. 10,000/kg in early 2017 to over Rp. 20,000/kg by 2018, and spiking to nearly Rp. 50,000/kg from June 2021 to October 2022, before dropping again to around Rp. 15,000/kg by September 2023 (Langford et al. 2023 and refer to Chapter 2). As a result, seaweed farming has created considerable wealth for some who have access to the sea in which to undertake it. Employment creation The most labour-intensive job associated with seaweed farming is tying seaweed propagules to ropes prior to planting. This work is time-sensitive, such that a group of five people might be required to achieve the tying required to replant an area within a day. As a result, farmers do not normally do all of this work themselves but pay others to do it for them. The creation of employment through this practice is widely seen as one of the important positive social impacts of seaweed farming. This is felt particularly strongly in Pitu Sunggu, where, as discussed above, many people have traditionally had to migrate to find work. This seaweed binding work can be undertaken by women while caring for small children, as well as by elderly people and those with physical disabilities such as blindness or limited mobility Export commodity frontiers 117 who may not be in a position to undertake other forms of work. It is considered to be an adequate but not highly paid job compared to cultivation by the farmers themselves. It also involves sitting in the same position for long periods of time and binders who do not wear gloves may experience severe skin irritation from prolonged contact with the seaweed. Nonetheless, many people prefer it to working in the sun on the ponds. One resident observed how seaweed farming had changed labour relations between people in Kampung Baru and Bonto Sunggu: I used to inspire the children around my house that the people of Kampung Baru were creative and hardworking people. In the past, the people of Bonto Sunggu Hamlet were the employers of the Kampung Baru community, who were agricultural labourers, they worked on our ancestral fields. But now, the people of Bonto Sunggu Hamlet are slowly becoming labourers for the Kampung Baru community, and the hamlet’s economy is growing. The growth comes from seaweed. This is proof that if you work hard and diligently, it will give you a good change in life. Please look at the community of Kampung Baru. If you look closely, the number of people who own cars is higher in Kampung Baru Hamlet [than here in Bonto Sunggu]. Chapter 8 explores the work of seaweed binders in more detail. Booms and busts The Pitu Sunggu seaweed industry has experienced several periods of boom and bust driven by price changes. Throughout 2014 and 2015, seaweed prices declined 0 500 1,000 1,500 2,000 2,500 3,000 3,500 0 20,000 40,000 60,000 80,000 1,00,000 1,20,000 Bonto Sunggu Kampung Baru Pungkalawaki Average annual production per farmer, 2021 Total annual production, 2021 Total hamlet production Average per capita production Figure 4.7 Total and average seaweed production by hamlet Source: Data from authors’ survey. 118 Langford, Ruhon, Walyandra & Armis steadily to half their previous value. As a result of this ongoing decline, many farmers sold or gave away their sea space and farming equipment and migrated to find work, often in Kalimantan or Papua. One farmer lamented that he had made several seaweed plots in the early days of the industry, but had moved away for work and given them away, not anticipating the future profitability of the industry: ‘I gave them all away … and now [the new owners] don’t want to give them back’. These transactions occurred before sea space was in short supply. In 2017, the large Chinese carrageenan processor BLG commenced operation in nearby Pinrang, and in the second half of 2017, Makassar prices more than doubled from Rp. 9,400/kg to Rp. 22,000/kg (Zhang et al., 2023). Seaweed farming quickly became much more profitable, prompting many of the residents to return to the village and recommence seaweed farming. The agricultural and aquacultural livelihoods available to residents of the village are therefore closely linked to patterns of migration. In the early years of seaweed farming, farmers struggled to maintain year-round cultivation of the species of seaweed that they were cultivating: Kappaphycus alvarezzi, known colloquially as ‘cottonii’. The year 2017 marked an important point in the development of the industry in Pitu Sunggu because it was the year that another species was introduced to the village: Kappaphycus striatus, known colloquially as ‘sacol’. Sacol contains the same type of carrageenan as cottonii so was easily incorporated into supply chains by traders, who often mix the species together. Sacol is more tolerant of oceanic conditions during the Pitu Sunggu dry season, so the introduction of this species meant that farmers could alternate between sacol and cottonii to achieve year-round production. Since the introduction of this species, seaweed farming activities have intensified. Households that previously undertook both fishing and seaweed farming have spent increasing time on the latter. This has also increased the demand for seaweed binders to the extent that labour supply within the village is no longer sufficient, and some farmers have to transport their seaweed to groups of binders located in other, inland villages, in order to access workers. Crab fishing Over time, there have also been changes in the crab fishing activities undertaken alongside seaweed farms. Initially, village residents caught mostly mangrove crabs, which they sold at market, to local traders, or to hotels in the city. Gradually, crab trading became more common and a crab peeling business (for blue swimmer crabs) was established in the village, which bought small crabs and sold the meat in the city. At the same time, crab fishermen shifted from using nets that they sewed by hand themselves to purchasing nets from stores. Today, crab fishing is highly seasonal and prices fluctuate significantly. Over the year of our observation, prices changed from Rp. 50,000/kg in January, to a peak of Rp. 90,000/kg in April, before falling to Rp. 20,000/kg over the following months. Fishermen rarely catch large crabs but instead catch large numbers of small crabs (between 5–25 kg/day, depending on the season and the price). Crab fishers typically do not differentiate Export commodity frontiers 119 their catch based on crab size, gender, or pregnancy, but sell the entirety of their load directly to traders. There is a trader based at the pier throughout the crabbing season to buy crabs directly off the boats. The crab peeling business in the village also creates jobs for 10–20 residents, although this is far fewer than the number of people employed in seaweed binding. While the seaweed industry has created positive benefits for many village residents, the effects on crab fishermen have been less positive. Crab fishermen, who previously had access to the entire coastal area for crab fishing, are now excluded from a large part of the coastal space and their activities have been squeezed into the gaps between seaweed farms. Many crab fishermen struggle to make an adequate living, and as the seaweed farming area is virtually all taken, it is difficult for crab fishermen to switch to the more lucrative activity. These dynamics will be explored in more detail in Chapter 5. Livelihood specialisation Today, Pitu Sunggu seaweed farmers are highly specialised in seaweed farming. Most of them (60 per cent) also undertake marine fishing (Figure 4.8). Pond farming is also common, it is undertaken by 38 per cent of farmers, while some also undertake off-farm work (11 per cent), crab fishing (10 per cent), and collecting ocean shells (7 per cent). Notably, just 1 per cent of farmers surveyed reported producing rice, and no respondents reported growing fruit or vegetables or rearing livestock. This is because the land area of Pitu Sunggu is almost entirely taken up by brackishwater ponds, with some coconuts growing on the banks between them. Pitu Sunggu farmers are therefore highly export orientated in their production, and rely on the sales of seaweed and/or shrimp and fish for the money they need to purchase food. 0% 10%20% 30%40% 50%60% 70 % Rice Coconuts Ocean shells Crabs Off-farm work Pond farming Fishing in th e ocean Percentage of households participating in dfiferent livelihood activities Before commencing seaweed farmingAfter commencing seaweed farming Figure 4.8 Livelihood activities of Pitu Sunggu seaweed farmers Source: Data from authors’ survey. 120 Langford, Ruhon, Walyandra & Armis This is unlike the situation in the nearby village of Laikang, where 27 per cent of seaweed farmers also grow rice and 18 per cent also grow corn. Pitu Sunggu seaweed farmers are therefore quite specialised in export-orientated products – 77 per cent of them earn more than half of their household income from seaweed farming and 83 per cent employ more than half of their household labour in seaweed farming. Export-driven change in Pitu Sunggu Pitu Sunggu is a place that has seen a number of transformations of the landscape with the introduction of new crops and technologies, occurring alongside environmental changes which further push them into new productive domains. Seaweed farming was not the first and is unlikely to be the last export crop to transform village livelihoods in Pitu Sunggu. The long-term patterns in land ownership, intensification, land degradation, and infrastructure development created a period in village development where certain residents found themselves searching for a new livelihood activity. They took it up with enthusiasm, claiming rights to the sea which paid off when seaweed prices rose. 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Selébs en Onderh: zuidwest/Topographische Inrichting.” Jakarta: Topografische Inrichting, cartographer. and Netherlands. Topografische Dienst. http://nla.gov.au/nla.obj-234654080 United States Army Map Service. 1943. Southern Celebes 1:125,000 / prepared under the direction of the Chief of Engineers, U.S. Army, by the Army Map Service, Indianapolis Unit. Indianapolis Unit, cartographer. and Allied Land Forces. South-East Asia. Directorate of Surveys. and Great Britain. Army. Royal Engineers. Map Production Company, 110. http://nla.gov.au/nla.obj-234438708 Van Gorsel, J. T. 2022. “Geological Investigations of Sulawesi (Celebes) before 1930.” Berita Sedimentologi, 48 (1), 79–114. https://doi.org/10.51835/bsed.2022.48.1.391 Zainal, A., and A. Aprasing. 2014. The Emergence of Early Kingdoms in South Sulawesi. Journal of Humanity, 2 (1), 23–48. https://doi.org/10.14724/02.02 Zhang, Jing, Scott Waldron, Zannie Langford, Boedi Julianto, and Adam Martin Komarek. 2023. “China’s Growing Influence in the Global Carrageenan Industry and Implications for Indonesia.” Journal of Applied Phycology June: 1–22. https://doi.org/10.1007/ s10811-023-03004-0 DOI: 10.4324/9781003183860-8 5 From communal access to private ownership Negotiating rights to the sea Zannie Langford, Radhiyah Ruhon, Zulung Zach Walyandra, Risya Arsyi Armis, and Imran Lapong Enclosure Looking out across the waters of Pitu Sunggu, the ocean is visibly full of seaweed farms, tightly packed together with only small gaps between them for boats to pass through. Just twenty years ago, seaweed farming was virtually unknown in this area, and fishermen moved around the space freely, catching fish, netting crabs, and trading with offshore islands. The sea was a communal resource which could be used by anybody, and nobody could be prevented from using it. However, today it is divided into individually owned plots of sea space (Figure 5.1) which can be bought, sold, rented, and inherited. Seaweed farming has caused a dramatic change in the way that the sea is used and managed. Unlike fishers and crab netters, who typically move around across large (a) (b) Figure 5.1 a) A seaweed farmer working on his farm; b) Pitu Sunggu seaweed farms from above Image from drone footage by Nur Ihsan recorded May 2022 offshore of Pitu Sunggu village. This chapter has been made available under a CC-BY-NC-ND license 124 Langford, Ruhon, Walyandra, Armis & Lapong areas in search of their catch, seaweed farming requires that farmers be able to claim use of an area of sea space for the full farming cycle – around six weeks (Figure 5.1). During the time that the seaweed is growing, they must be able to exclude other ocean users – such as crab netters and passing boats – from their area of the sea, as boats passing through a seaweed plot can damage the seaweed or become tangled in the ropes supporting the farm. In addition, in order to set up their farming apparatus, farmers must install anchors to attach their farm to the sea floor, known as seaweed farm ‘foundations’.1 These foundations delineate the area of the farm and are expensive to set up. To justify the investment, farmers need to be able to guarantee that they will be able to continue to use them for longer than just one cycle – normally for several years. This requires a different type of right to use the sea: one that is both exclusive and permanent. This is a significant change from the customary use of sea space, in which people have traditionally enjoyed the non-exclusive right to temporarily access the sea: they were free to use it, but so was everybody else. The success of the seaweed farming transition has therefore depended on the conversion of the ocean from a public access area to space divided into discrete, individually owned farming plots, where farmers can work the same area of sea space over many months or years. It relies on excluding other ocean users from seaweed farming areas, and, in Pitu Sunggu, the excluded users are primarily crab netters, who with the seaweed farming transition have been pushed out of shoreline areas, and now must set their crab nets further offshore or in the gaps between seaweed farms. The concept of land ‘enclosure’ has been widely used to interpret the drivers and effects of ‘the division or consolidation of communal … lands’ into ‘carefully delineated and individually owned and managed farm plots’ (Britannica 2013, n.p.). Early writing on enclosure in Europe explored the multiple interacting forces that led to enclosure of common land from the 12th to the 19th century, driven not only by landholding elite, but also by farmers themselves: Contrary to the popular idea that enclosure was wholly a landlord’s movement … there was a distinct effort on the part of the peasantry … to abandon the open-field system and escape compulsory co-operation with the lazy and shiftless … there was no compulsion on the customary tenants … to make them enclose; theirs was a purely spontaneous movement prompted by a desire to escape obsolete restrictions. There was also another motive – the need of self-protection. The growth of large grazing farms, and the consequent over-stocking of the commons, led the small men to enclose as the only way to keep some of the pasture for their own use. (Curtler 1920, pp. 65–66) As Curtler notes, enclosure resulted from multiple divergent efforts on the part of different groups of people operating under interacting pressures over a long period of time, resulting in uneven geographies of enclosure. He emphasises the agency of farmers within these processes, as actors in the process driven by both entrepreneurialism (desiring to ‘escape compulsory co-operation’ with others), and the increasing pressures they faced as a result of broader structural changes. From communal access to private ownership 125 More recent work on enclosure has similarly emphasised both ‘top-down’ and ‘bottom-up’ processes of enclosure. In Indonesia, enclosure has often been driven by large-scale land acquisitions for agriculture (such as palm oil plantations), mining or conservation (for example, Goldstein 2016; Hall et al. 2015; Ito et al. 2014; McCarthy et al. 2012; Pichler 2015; Schoenberger et al. 2017; Semedi and Bakker 2014). However, enclosure is also a process undertaken ‘from below’, by smallholder farmers themselves (see, for example, Alkhalili 2015; CastellanosNavarrete and Jansen 2015; Curry and Koczberski 2009). Investorand farmer-driven processes often interact as smallholders both respond to external pressures (for example, Giorgio et al. 2022) and entrepreneurially pursue new agricultural opportunities, such as those offered by export commodities (for example, Olofsson 2021). To date, the Indonesian seaweed industry has been resistant to large-scale agribusiness as a result of the practicalities of farming seaweed, which is seasonally variable, requires high labour inputs, and is subject to high levels of risk due to environmental changes (as will be described in detail in Chapters 6 and 7). Consequently, processes of enclosure have occurred within villages largely in the absence of claims on sea space from outside the village. In this context, enclosure has been driven by coastal residents themselves. Hall et al. (2011, p. 145) describe smallholder driven processes of ‘intimate exclusion’, in which ‘neighbours and kin who share common histories and social interaction … exclude one another from access to land as part of a strategy to accumulate capital’. They note that ‘these are “everyday” processes, mundane and piecemeal, that do not grab headlines. But cumulatively, they have the effect of producing agrarian classes with differential access to means of production’ (Hall et al. 2011, p. 145). The role of export commodities in triggering the reconfiguration of land access systems has been studied in several contexts. Rights to use land are often gained through the application of labour. In subsistence agricultural systems, constant labour application on land is typically required to maintain its productivity, which reinforces the ownership claim of the user. There are differences in labour use between different types of land-based agricultural activities – annual crops and perennial crops – that impact on the establishment of property rights. Li (2014) describes how the production of cocoa by Sulawesi highlanders generated enclosure of previously communal land. She emphasises the materiality of cocoa as central to this process, since [t]ree crops like cacao do something by their permanence. When highlanders planted cacao in their fields, the presence of the trees disrupted the cycle in which they cleared a patch of forest, used it for a few seasons, then left it to fallow. The trees also changed the ownership status of the land, transforming it into individual property, since no one else could use the land thereafter. Excluding other users, and other uses, wasn’t new: planting a field of corn also required exclusion, at least until after the harvest. The new element was permanence. ( pp. 84–85) Similar processes occur in Vanuatu where production of kava in large quantities for export, which requires lower labour inputs than traditionally produced food crops, 228 Langford reduce pressure on land resources. It also has the potential to provide ecosystem services and new livelihood opportunities for coastal households. Despite this interest, there is relatively little understanding of what the global seaweed industry actually looks like, which leads to a gap between ideals and reality. Chapter 1 introduced fundamental information on the global industry. It highlighted that seaweed farming is a relatively new activity globally, and that current global marine seaweed production is dominated by just six species of seaweed. Around 55 per cent of seaweeds are grown to produce the food seaweeds used for nori, wakame and kombu, with 40 per cent grown to produce hydrocolloid containing seaweeds, including Eucheuma and Kappaphycus for carrageenan production, and Gracilaria for agar production. Currently, there is very limited cultivation of other species, owing in part to a lack of understanding of how to grow and process them efficiently, and of their environmental requirements and impact. While there is considerable worldwide excitement about the potential for seaweed to store carbon, reduce methane emissions and increase food security, this needs to be checked against the feasibility of producing those seaweeds in different environmental, geographic, socio-economic and policy contexts. Chapter 1: The global carrageenan market set the macro level scene for other chapters of the book. It compared carrageenan with other major hydrocolloids used for gelling, thickening and stabilising purposes in foods, cosmetics and pharmaceuticals such as gelatin, cellulose gum, pectin, xanthan gum and Arabic gum. Each of these hydrocolloids performs different functions and is used in specialised combinations to provide goods with specific textures and consistencies. These hydrocolloids can complement and substitute for each other to different extents in different applications. The main use of carrageenan currently is in the food and beverage industry, with nearly half of all carrageenan being used in meat and dairy applications. More than half of the market is a lower purity form of carrageenan known as semi-refined carrageenan (SRC) used in a range of low value, non-food applications including pet food, but it is increasingly used in food products. Most carrageenan used is kappa-carrageenan and iota-carrageenan, derived from the species of seaweed grown in Indonesia. Indonesia dominates global carrageenan seaweed production and the majority is processed in China, or by Chinese companies operating in Indonesia. There has been a trend towards increased processing in countries of origin, a process that has been expedited by Chinese direct investment in the Indonesian seaweed processing sector. The benefits for domestic value adding and employment have to be weighed up against the negative effects of competition on local processors, and pose questions for government on policies towards foreign direct investment (FDI), including on tax and environmental standards. The data and analysis presented in the chapter suggest that carrageenan markets are likely to continue to grow, given demand settings for processed food globally and in developing countries, but also in a wide range of other products to form a diversified market. While the hydrocolloid sector is highly competitive, carrageenan has sought-after performance characteristics. This bodes well for the governments, companies and households of Indonesia that have invested in seaweed production or plan to. Conclusion 229 Chapter 2: The Indonesian seaweed industry analysed the industry at a national meso level, between the global and provincial levels. The industry is relatively new, and has only had significant commercialisation since the 1990s. The early development of the industry was driven largely by multinational companies seeking to develop a new production base. The production base has become increasingly atomised. Seaweed farming is completely dominated by small, individual households that make their own management decisions and innovations, with a dearth of corporatised seaweed farms or estates. Households deal with local traders with whom they have close personal or reciprocal relationships but there is a dearth of formal, contract governance systems. Attempts have been made to corporatise the production and marketing systems but smallholder-based production systems and ‘spot’ marketing systems are more efficient. These pro-poor characteristics are also a source of international competitive advantage. Indonesia has for many years been the world’s largest producer of carrageenan seaweeds. Indonesian policy aims to consolidate or expand this position as a seaweed producer and, furthermore, to increase the share of it used for domestic processing to meet value adding and employment objectives. Government has sought to expedite the process through the tools of industry policy (export bans, subsidies for domestic processing) with adverse effects. However, Indonesia is meeting the objective of building a domestic processing base through FDI, especially from China. Chinese-invested companies in Indonesia account for perhaps half of the actual output of Indonesia’s carrageenan processing sector and companies in China process virtually all of Indonesia’s exports of raw dried seaweed. While government has sought to play a mediating role, industry development and conduct is driven by powerful forces that directly and profoundly affect local governments and households. Chapter 3: The South Sulawesi seaweed industry explored the provincial industry and value chain. Even given statistical qualifications (Appendix 1) the industry appears to have grown strongly over the last two decades. The chapter described how seaweed produced in this region is combined with production from other areas in Eastern Indonesia as it makes its way to Makassar for processing, packing and export. The chapter demonstrated how value is added to seaweed at different points of its transformation and highlighed the central role of South Sulawesi in the Indonesian seaweed industry. Lessons from the growth and development of the leading province may be applicable to other areas seeking to grow seaweed industries. Chapter 4: Export commodity frontiers and the transformation of village life explored how the village of Pitu Sunggu has been transformed by successive waves of export commodity ‘booms’, leading to rapid and long-lasting environmental and socio-economic changes. The residents of Pitu Sunggu are almost entirely dependent on export commodity production for their livelihoods: very little food is grown there. The village landscape was transformed from mixed cropping to field rice production in the early twentieth century, from field rice to wet rice during the Green Revolution of the 1970s, from wet rice to shrimp and fish farming from the 1980s and, most recently, the sea from communal fishing grounds to seaweed farms from the early 2000s. These export-oriented transformations have led to increased incomes for many residents. Nowadays, most of them earn the majority of 230 Langford their income through either seaweed farming, pond farming of shrimp and fish or fishing for blue swimmer crabs and market fish. Although people consume wildcaught marine fish and farmed fish and shrimp, most of these products are destined for export markets. Pitu Sunggu residents are therefore impacted heavily by global markets, demand and prices. This has created a situation of high but often volatile incomes for farmers, including periods of ‘boom and bust’ as production of different commodities has expanded and contracted in response to market signals and changing government incentives (such as those affecting the availability of fertiliser). These booms and busts have also affected migration patterns. People return to the village when prices and incomes are good (as has been the case with seaweed farming in recent years) and travelled abroad or within Indonesia to work when livelihood options were limited. This chapter highlighted the historical importance of export crops to livelihoods in this coastal village, and the close relationship between export commodity prices and social and economic organisation. Chapter 5: From communal access to private ownership: negotiating rights to the sea explored how seaweed farmers in Pitu Sunggu transformed their offshore sea area tenure from communal fishing grounds into parcels of individually ‘owned’ plots of sea space. It traced how the first seaweed farmers established plots and sought to exclude fishers from their farming areas, and how this was contested for many years. Over time, as more and more people established plots, resistance decreased, until eventually most people who had resisted seaweed farming had become seaweed farmers themselves, and the rights of individuals to claim exclusive ownership of sea space by installing farm markers became widely recognised. It described how today seaweed farming plots in Pitu Sunggu are rented, bought and sold for high prices, as well as the types of conflicts that persist between different seaweed farmers, between farmers and fishers and over encroachment of seaweed farms on boat lanes. It highlighted how these use informal arrangements which, while not formally recognised by government, are widely recognised and enforced within Pitu Sunggu. It also cited examples of other seaweed farming areas which have established similar rules for sea use. In some cases, local rules limit the number of plots an individual farmer may own, the locations which may be claimed for farming and the hours during which farms may be operated. In Pitu Sunggu, many farmers have claimed large areas of sea space, and rely on casual wage labourers to keep their areas productive. The system of property rights has therefore led to the creation of a labour market and, in turn, this labour market is essential to valorising the claims that seaweed farmers have on the sea. Without their work, it would be impossible to farm such large areas. The chapter highlights how seaweed farming has required a reconfiguration of local understandings of sea space access and rights in ways that have benefited some community members and disadvantaged others, such as crab fishers who were excluded from what was previously crab fishing grounds. Chapter 6: Environmental and socio-economic constraints to marine farming and Chapter 7: Farmer decision-making in the Indonesian seaweed industry explored the range of environmental and socio-economic factors affecting farmer decision-making and farm performance. Chapter 6 described how ocean conditions Conclusion 231 such as surface water temperature, salinity, light penetration, water motion, nutrient levels, turbidity, ephiphytes, grazing wildlife and pollution impact upon seaweed growth. These conditions create distinct seasonal patterns of cultivation that vary between areas. Chapter 6 also examined how socio-economic factors such as access to sea space, access to labour, access to capital, seaweed market prices and risk of theft also constrain the production opportunities available to individual farmers. Chapter 7 explored how farmers respond to these environmental and socioeconomic constraints and opportunities by altering their production strategies in order to optimise production throughout seasonal changes in ocean conditions and to manage the risk of ice-ice disease, including by varying the species and location of seaweed planted and the timing of it throughout the year, their farm maintenance patterns, propagule use, float use and rope use. It showed that many farmers use a strategy of geographic diversification, in which they farm multiple plots in different locations in the sea, which both minimises the risk of total seaweed loss due to ice-ice disease in any one plot, and provides flexibility to move seaweed between plots in response to different growth rates in different locations. These chapters also described propagule use dynamics, particularly the issue of propagule ‘quality’ which is widely identified as a major problem facing farmers. It showed that in Pitu Sunggu, propagule ‘quality’ is primarily a seasonal problem. The issue is not a lack of genetic material for propagation as is sometimes assumed, but poor environmental growing conditions at certain times of year which mean that farmers have trouble producing any seaweed at all, including to use as propagation material. Propagule ‘quality’ generally improves as oceanic conditions become more suitable to seaweed cultivation in different seasons of the year. There is also a long-term decline in farm productivity noted by farmers, however, this is likely to be at least in part a result of changing ocean conditions rather than an issue of declining propagule ‘quality’ as is sometimes assumed. As seaweed farming in Pitu Sunggu has intensified over time, more seaweed competes for nutrients in the waters off-shore of the village and as such it is likely that declining yields are linked to the increasing area under cultivation – and possibly also to declining fertiliser use in coastal shrimp ponds. These chapters also explored the role of farmer decision-making in farm productivity, showing how successful farmers monitored their farms almost daily and made small changes in farm apparatus in response to their observations. For example, farmers increased the number of plastic bottle floats if they noted that seaweed growing closer to the floats grew better than that further away (which was slightly deeper). They reduced rope tension in response to increased water motion to reduce breakages and increased or reduced propagule size in response to risks of breakages from waves in different seasons. They harvested seaweed early to prevent theft or breakage, and moved seaweed between locations in response to epiphytes, mud or grazing by fish. They brought seaweed to shore for cleaning if epiphytic growth was excessive, or harvested and replanted undamaged portions of it if damage was excessive. Farmers make a range of decisions designed to maximise yield, but also – and often more commonly – to minimise the risk of losses, which are frequent in certain seasons, due to ice-ice disease and from breakages from wave 232 Langford motion. The chapter explored how diligent farm management practices are a key component of the performance of seaweed farms. The chapters also explored how socio-economic factors affect farm management, including how a lack of access to sea space leads some farmers to plant at much higher densities than is recommended, how access to binding labour often affects harvest and planting timing, how binder decision-making affects the size of the propagules they bind, how the risk of theft at times of high prices affects the size of propagules farmers use and the timing of harvest. It also showed how seaweed prices drive both increasing uptake of seaweed farming by new farmers, and intensification of farming by existing farmers. The chapters showed how farm performance and management decisions are closely linked to socio-economic factors and, how these must be considered in monitoring performance of existing farms. Chapter 8: Gendered work and casual labour in the Indonesian seaweed industry explored the range of different types of labour that are employed in the seaweed industry in Pitu Sunggu. It highlighted the gendered nature of onand off-farm jobs in the industry, with men primarily involved with on-farm work, and women involved in the many preparatory and post-harvest activities. It also highlighted the role of casual wage labourers in the industry, often large numbers of people from inland villages who work as seaweed binders. These binders are often people with few other livelihood opportunities, such as women with caring responsibilities, widows and people with disabilities. In addition, many people find work ‘gathering’ seaweed that has broken off farming ropes and washed ashore. This chapter highlighted the way that seaweed is incorporated into the livelihoods of a diverse range of households, in both seaweed-farming and non-seaweed-farming villages, and suggested that people who do not farm seaweed but work in the industry indirectly should also be considered stakeholders. Chapter 9: Seaweed marketing: village-based traders as financial and market intermediaries explored the local seaweed marketing system in Pitu Sunggu, in which local traders receive seaweed from farmers and sell it to Makassar-based warehouses. It described how senior traders in the village capture seaweed supply by providing financial services to farmers, but how with rising seaweed prices, new entrants to the industry are trying to disrupt this structure. Farmers and traders alike report that they are able to accurately assess seaweed moisture levels, but do not necessarily strive to deliver higher quality characteristics, including moisture. It highlighted how price signals from Makassar are transmitted to traders and farmers which appears to be an effective method of generating supply responses, but not of increasing seaweed quality, which is of primary interest to processors. Both traders and farmers have incentives to meet minimum quality standards, but not to exceed them. If their seaweed is drier than minimum standards, it will often be mixed with wetter seaweed to increase weight and sales revenue. This chapter suggested that farmers and local traders have the capacity to supply better qualities of seaweed, but that this would require a buying schedule with higher price-grade differentials, and the incentives for all the actors in the chain to use it. Conclusion 233 Policy recommendations The chapters of this book telescoped down from macroto mesoand micro-level analysis, with an emphasis on socio-economic and environmental factors in the decision-making of farmers. Several policy implications follow from this:1. Policy recommendation 1: Development of alternative seaweed products should be subject to economic feasibility analysis Chapter 1 reviewed the global market for carrageenan. The Indonesian government aims to diversify the market for carrageenan seaweed products including producing foods, fuels, fertilisers, animal feeds and carbon capture. In addition, it has tried to develop new products from other seaweed species found in Indonesia. These products do not yet have a market, and because of this, it is unclear whether such a market can be established or it is commercially viable for households and companies to service such a market. It is recommended that biophysical research and development into alternative seaweed markets, products and species is integrated with market research and economic feasibility analysis. A technoeconomic analysis such as this could guide research and development programmes and policies by providing insights into the most economically feasible product development options. Policy recommendation 2: Consider the environmental impacts of FDI in processing The Indonesian government has sought to improve processing technology incountry by incentivising FDI in seaweed processing plants. However, these plants were approved with liberal tax and investment terms, and carrageenan processing can have a considerable environmental impact. Now that Indonesia has established a significant carrageenan processing base, it is recommended that future investments are carefully evaluated across social, economic and environmental criteria to maximise benefits to Indonesia. Policy recommendation 3: Carefully consider the costs and benefits of industry policy After the boom that occurred during the course of this study, seaweed prices began a significant decline in October 2022 (Langford et al. 2022). During periods of price decline in the Indonesian seaweed industry, it has frequently been suggested that there should be pricing intervention to support farmers. During periods of price increases, it has also been suggested that domestic processors should be supported by capping prices and, indeed, such a policy was implemented in Nusa Tenggara Timor (NTT) in 2022 (Langford et al. 2023). These two types of price interventions serve different purposes. Care should be taken when intervening in markets, however, as interventions often have unintended impacts. Whether such impacts justify welfare benefits to farmers or investors (processors), under what conditions and over what timeframes, should be carefully considered before any price or trade interventions are announced or implemented. Policy recommendation 4: Marine spatial planning The findings in Chapter 5 have important policy implications for marine zoning. As the Indonesian government seeks to expand seaweed farming into new areas 234 Langford of eastern Indonesia, these insights suggest that advanced sea-space planning and marine zoning could support more equitable access to seaweed farming areas. Emerging production areas could, for example, pre-emptively set boundaries for sea space for not just seaweed farming, but also boat lanes, fishing activities, environmental reserves (particularly near sensitive marine ecosystems such as coral reefs and seagrass meadows and fish habitats) and tourism. Other factors that could be considered include whether limits on farm areas are desirable, and whether formal recognition of use claims by farmers would be desirable. The workshopping of marine planning and zoning areas in advance of wide establishment of seaweed farming in new regions is appropriate. In existing regions, such work is complicated by existing claims to sea space by community members, and any attempt at intervention should be undertaken through close consultation with community members to avoid generating hardship and unrest. Policy recommendation 5: Focus on propagule distribution rather than solely on genetics The problem of propagule ‘quality’ is not solely one of genetics. Seaweed is clonally propagated so that much of the variation in propagule quality is closely linked to the oceanographic conditions in which they are grown. When farmers complain about propagule quality, they complain about the availability of propagules or that they are small, old, exhibit colour that indicates poor health or are damaged. In some locations, the establishment of propagule nurseries in areas with good year-round growing conditions can support improved propagule availability, however the issue of quality will remain largely linked to seasonal variation in the suitability of different coastal areas to seaweed farming. Efforts to support supply of quality propagules should focus on production and distribution of quality seaweed propagules, rather than solely on technological developments. Policy recommendation 6: Focus on plastics end-of-life management rather than plastic float alternatives Plastic floats are used widely in seaweed farming because they are highly suitable for the purpose. They are light so they are easy to transport, they move easily with currents so reduce breakages and can be filled with water to sink seaweed below the surface of the ocean to minimise losses after rain. Any attempt to reduce the use of these floats would need to offer a suitable alternative to them with similar features at low cost. At present, no such options exist. However, significant improvements in plastic management could be made by supporting farmers’ end-of-life management of plastics. Many used bottles from seaweed farming are at present thrown into the sea or river, or left to decompose on vacant land. The rate of plastic degradation increases over time, such that used plastic bottles may represent a greater threat to marine ecosystems than those used on farms (because bottles used on farm are newer, and therefore degrade more slowly than older bottles which have been discarded). Improved end-of-life management of bottles therefore represents an important first step in improving plastic management from seaweed farming. It is recommended that end-of-life plastics management be prioritised as a key step towards reducing the contribution of seaweed farming to ocean plastics. Conclusion 235 Policy recommendation 7: Build recognition of the importance of local knowledge into farm extension programmes The government extension system would benefit from the incorporation of local knowledge into research, extension and training services. While several important technological gains have been taken up (such as the use of bamboo drying platforms for part of the drying process, and the use of the twin-rope method to reduce breakages), advice or technologies that are general in nature and not adapted to local realities are unlikely to be taken up. Farmers are intimately tuned in to their local environment and can assess whether technologies are suitable and beneficial. Closer engagement with farmers and their complex decision-making processes – as outlined in this book – can support more effective farm extension services. Policy recommendation 8: Review aid distribution system to reduce conflicts between farmers Government aid has caused significant conflict between seaweed farmer group members. The aid provided is often only sufficient for a few of the group members, and distribution between members is often uneven. This has led to frustration by many farmers and a lack of interest in joining farmer groups or working cooperatively. In addition, the government assistance provided is often not fit for purpose. For example, programmes may disseminate the wrong type of boat or boat motor or the wrong size or quality of rope. A review of government and group programmes directed at the seaweed industry (and indeed other industries) is recommended. Policy recommendation 9: Develop seaweed growth models and remote sensing technologies to build an understanding of seaweed growing locations and yields and the impact of climate change There is a lack of data on seaweed growing patterns and how these relate to local ocean conditions. This could be addressed through new technologies, such as by combining analysis of satellite imagery of farm locations with in-situ measurement devices to develop a model of seaweed growth under different growing conditions. Such developments could provide important data on seaweed growth and current production areas which are necessary to guide the development of a more sustainable and resilient seaweed industry, which may include improvements in seaweed quality and production under environmentally sustainable conditions. These developments will also be important for building resilience strategies in the face of climate change. Farmers experience frequent seaweed losses due to prolonged rainfall and high temperature events. A closer understanding of seaweed production quantities, locations and growing conditions could support more informed industry planning. Policy recommendation 10: Recognise casual labourers as a key group of seaweed industry stakeholders A range of demographic groups work in the seaweed production sector. Some are men, women and children in seaweed farming households, while others are from non-seaweed farming households, including casual labourers. These casual workers should be recognised as important stakeholders in the industry, 236 Langford as they include vulnerable populations such as widows, people with disabilities and women with caring responsibilities who may have no other source of income. Casual labourers working in the industry should be included in statistics, analysis and policy on the industry in order to consider the impact of development on the industry, including in non-seaweed farming areas. Policy recommendation 11: Quality improvements require processor-led price signals Farmers and village-based traders are highly attuned to the quality (primarily moisture and dirt content) requirements of processors and warehouses, but seek to avoid supplying seaweed which exceeds requirements as they would suffer decreased revenues because of the lower weights, which is the basis of payment. As such, local traders regularly mix high and low quality seaweed, and farmers avoid drying their seaweed for too long. Improved price quality signals could incentivise the supply of higher quality seaweed. Policy recommendation 12: Financial services for farmers could be diversified Farmers often use financial services from a number of different sources, including from village-based traders, bank loans, cooperatives, pawnshops and family members. Each of these sources has different loan sizes, interest rates and repayment terms, and farmers select each of these to meet their needs. Interest rates from some sources are high, while in Pitu Sunggu, village-based traders do not charge interest but require farmers to sell seaweed to them directly, sometimes at lower than market prices. Farmers prefer to use debt rather than to save their money in banks as bank charges are high relative to the amounts they seek to save. Consequently many farmers also ‘save’ money with traders. Digitally mediated financial products have been suggested as a way of giving farmers’ access to credit. Although this is an innovative method, our research suggests that farmers have access to credit from a range of sources which suit their needs, but could benefit from a better range of savings products. Conclusion This book has explored how an export commodity – carrageenan seaweed – has transformed livelihoods in one village of Indonesia. Many people have benefited from the higher incomes available through the industry, but the distribution of benefits has been uneven. The industry has had both positive and negative social and environmental impacts as it has drastically transformed the use of sea space by coastal villages. It is hoped that the research and recommendations in this book will contribute to the development of the seaweed industry – globally, in Indonesia and in other countries – and improve the livelihoods of coastal communities that participate in it. Note 1 Additional policy recommendations from AIC projects are outlined in our policy brief (Waldron et l. (2023) and main project report (Langford, Waldron et al. (2023). Conclusion 237 References Langford, Alexandra, Welem Turupadang, and Scott Waldron. 2023. “Intterventionist Industry Policy to Support Local Value Adding: Evidence from the Eastern Indonesia Seaweed Industry.” Marine Policy 151 (105561). doi.org/10.1016/j.marpol.2023.105561 Langford, Alexandra, Scott Waldron, Nunung Nuryartono, Syamsul Pasaribu, Boedi Julianto, Irsyadi Siradjuddin, Radhiyah Ruhon, Zulung Zach Walyandra, Imran Lapong, and Risya Arsyi Armis. 2023. Sustainable Upgrading of the South Sulawesi Seaweed Industry. Melbourne, Australia: Australia-Indonesia Centre. https://pair.australiaindonesiacentre.org/research/sustainable-upgrading-of-the-south-sulawesi-seaweed-industry-2 Langford, Alexandra, Jing Zhang, Scott Waldron, Boedi Julianto, Irsyadi Siradjuddin, Iain C. Neish and Nunung Nuryartono. 2022. “Price Analysis of the Indonesian Carrageenan Seaweed Industry.” Aquaculture 550 (737828). doi.org/10.1016/j.aquaculture.2021.737828 Waldron, Scott, Nunung Nuryartono, Alexandra Langford, Syamsul Pasaribu, Kustiariyah, Tarman, Ulfah J. Siregar, Muhammad Farid Dimjati Lusno, Sulfahri, Boedi Sarjana Julianto, Siradjuddin, Ruhon, Radhiyah, Walyandra, Zulung Zach Walyandra, Lapong, Irsyadi Muhammad Imran, Risya Arsyi Armis, Eugene Sebastian, Helen Brown, Fadhilah Trya Wulandari, Hasnawati Saleh, and Steve Wright. 2022. Policy Brief: Sustainable Upgrading of the South Sulawesi Seaweed Industry. Melbourne, Australia: AustraliaIndonesia Centre. https://pair.australiaindonesiacentre.org/wp-content/uploads/2022/11/ SIP-1-EN-ONLINE.pdf 244 Langford, Ruhon & Waldron tonnes (Table A1.5). This is the only survey of seaweed farmers conducted since the 2013 census. It involved interviewing 7,075 farmers, the selection of which (by region) was guided by the results of the 2013 census. The survey relied on farmers’ reports of the number of longlines operated and the weight of each longline at harvest. Notably, BPS (2022a) differentiated between production which was sold as a final product (mostly in dry, but also small amounts in wet form) and production which was used as an input to the next farming cycle. In a revealing statistic, they reported that 36 per cent of all seaweed production in Indonesia was used to propagate a new cycle, with only 62 per cent sold (Table A1.6). This is an important development as if production is estimated based on the amount of seaweed harvested, without accounting for the amount used as propagules, the amount of seaweed recorded as harvested will be much higher than the amount of seaweed recorded as sold. For example, if a farmer starts with 10kg of seaweed seeds and grows it until it reaches 30kg, then harvests it, the harvest would be recorded as 30kg when in fact only 20kg of new material has been produced. Of the 30kg harvested, 10kg will be used for seed for the next cycle, and only 20kg will be sold and available for downstream sectors. While other agricultural sectors also involve similar statistical issues (carry-over seeds for crops or replacement Table A1.5 Seaweed production in Indonesia in 2020 by province 2020 Total marine production (tonnes) Proportion of total national marine production Total pond production (tonnes) Proportion of total national pond production Sulawesi Selatan 1,409,700 30% 222,601 63% Nusa Tenggara Timur 1,037,875 22% 30 0% Kalimantan Utara 441,152 9% Nusa Tenggara Barat 402,687 9% Sulawesi Tengah 393,458 8% 26,436 8% Sulawesi Tenggara 382,218 8% Maluku 262,850 6% Jawa Timur 144,697 3% 6,947 2% Sulawesi Utara 35,807 1% Maluku Utara 35,508 1% Sulawesi Barat 28,257 1% Kalimantan Timur 20,787 39,352 11% Bali 19,361 Banten 10,591 Lampung 10,119 Jawa Tengah 9,536 11,420 3% DKI Jakarta 9,039 Kepulauan Riau 5,041 Papua Barat 1,571 Jawa Barat 44,366 13% Other 450 Total 4,660,704 351,152 Grand total 5,011,856 Source: Data from BPS (2022a). Reconciling seaweed industry statistics 245 livestock), the large proportion of material used for multiplication in seaweed constitutes a significant statistical issue. Table A1.6 shows the amount of marine seaweed used for different purposes as reported in BPS 2022a. Analysis of satellite imagery We used high resolution satellite imagery to measure the area under production in Pangkep Regency from 2018 to 2020 (see Langford et al. 2021). We found that the total area cultivated at any time during 2020 was 782ha, but that on average 244ha was under cultivation in any given month. These areas are actual areas included in cultivation plots, so they exclude areas between plots. Comparison of available statistics Table A1.8 summarises the data available from different sources. Number of households Several sources report statistics on the number of households engaged in seaweed farmers (Table A1.9). The most accurate estimate is from census data. The 2023 Table A1.6 Final use of seaweed produced by province 2020 Used as propagules Sold as propagules Sold wet Sold dry Other Total production Lampung 1,709 11 25 8,372 210,119 Kepulauan Riau 1,681 23 1 3,327 9 5,041 DKI Jakarta 1,313 113 34 7,578 1 9,039 Jawa Tengah 3,911 64 5,561 0 0 9,536 Jawa Timur 54,819 7,962 19,447 61,828 641 144,697 Jawa Barat 0 0 0 0 0 0 Banten 5,098 100 4,179 264 950 10,591 Bali 11,538 274 29 7,507 13 19,361 Nusa Tenggara Barat 135,463 6,295 1,597 258,774 558 402,687 Nusa Tenggara Timur 450,237 19,388 2,651 552,232 13,367 1,037,875 Kalimantan Timur 5,365 255 51 14,615 501 20,787 Kalimantan Utara 107,769 502 2,120 330,400 361 441,152 Sulawesi Utara 5,120 103 030,397 187 35,807 Sulawesi Tengah 138,252 5,791 7,421 239,608 2,386 393,458 Sulawesi Selatan 484,822 16,306 15,933 852,258 40,381 1,409,700 Sulawesi Tenggara 141,960 4,575 2,342 231,207 2,134 382,218 Sulawesi Barat 5,927 681 307 18,329 3,013 28,257 Maluku 62,108 601 623 198,663 855 262,850 Maluku Utara 6,846 133 37 28,367 125 35,508 Papua Barat 210 70 120 1,163 8 1,571 Other 94 24 6 289 37 450 Total 1,624,242 63,271 62,484 2,845,178 65,529 4,660,704 Source: BPS (2022a). BPS also reports the total number of seaweed producing households, as shown in Table A1.7 by species. For full results see BPS (2022a). 246 Langford, Ruhon & Waldron Table A1.7 Number of seaweed farming households in Indonesia by type of cultivation Number of farming households growing different types of seaweed Total marine farming households Total pond farming households Lampung 101 0 Kepulauan Riau 197 0 DKI Jakarta 93 0 Jawa Barat 0 454 Jawa Tengah 304 149 Jawa Timur 2,152 132 Banten 354 0 Bali 749 0 Nusa Tenggara Barat 2,056 0 Nusa Tenggara Timur 10,166 10 Kalimantan Timur 219 211 Kalimantan Utara 2,075 0 Sulawesi Utara 286 0 Sulawesi Tengah 2,895 191 Sulawesi Selatan 24,922 3,110 Sulawesi Tenggara 7,083 0 Sulawesi Barat 804 0 Maluku 7,275 0 Maluku Utara 858 0 Papua Barat 103 0 Others 62 0 Total 62,754 4,257 Source: Data from BPS (2022a). Table A1.8 Summary of data collected from different sources Volume Area under cultivation Number of households involved National Sulsel Pangkep National Sulsel Pangkep National Sulsel Pangkep KKP (2020) ü ü ü ü DKP Sulsel (2020) üüüüüüüüü Ministry of Industry (2020) ü* Agricultural Census (2013) ü ü BPS seaweed survey (2020) ü ü ü ü Presidential Decree (2018) ü ü Satellite data (2020) ü * Derived from export and processing statistics. Reconciling seaweed industry statistics 247 census data is not yet available. However, 2013 census data reports that there are 66,115 seaweed farming households in Indonesia (marine and pond). This aligns closely with BPS 2021 survey estimates of 67,011 seaweed farming households in Indonesia, including 62,754 marine farming households and 4,257 pond farming households. National (KKP/FAO) production statistics estimated that production volumes in 2013 and 2020 were similar (9.3 million tonnes in 2013 and 9.6 million tonnes in 2020). Unless there were large changes in the scale of household production in that period, it seems reasonable that the number of households employed in the industry would be similar. The South Sulawesi DKP reports that there are 32,874 marine seaweed farming households in South Sulawesi, around 32 per cent higher than the BPS estimate of 24,922. While broad convergence between these sources provides some confidence in the statistics, reports in the Presidential Decree of 267,800 seaweed farming households appear highly overstated, most probably because they are based on inaccurate data on cultivated area and average size of household plots. The estimates of the number of people working in the industry are much more inconsistent than the number of households, probably due to different assumptions about who is included as a worker in the industry (Table A.10 and as discussed in Chapter 10). Consequently, the number of households involved in seaweed farming is preferred as the basis of analysis. Area under cultivation The KKP estimates that 102,254ha were cultivated for seaweed farming in 2020 (of a potentially suitable farming area of 12,123,383ha (KKP 2022)). The Presidential Table A1.9 Estimated number of seaweed farming households in Indonesia from different sources National South Sulawesi Marine Pond Marine Pond Agriculture census 2013 66,115 22,293 BPS seaweed survey (2020) 62,754 4,257 24,922 3,110 DKP Sulsel (2020) – 32,874 – Presidential Decree (2018) 267,800 – Table A1.10 Estimated number of seaweed farmers in Indonesia from different sources National South Sulawesi Marine Pond Marine Pond Agriculture census 2013 – – BPS seaweed survey (2020) 88,176 5,211 33,331 3,878 DKP Sulsel (2020) – 98,621 – Presidential Decree (2018) – – 248 Langford, Ruhon & Waldron Decree Nomor 33–2019 estimated that a much larger area of 267,800ha was used for seaweed farming in 2018 of a potentially suitable area of 1,510,223ha. The SulSel DKP estimated that in 2020, 40,322ha were used for seaweed farming by 32,874 households. Neither the Agricultural Census 2013 nor the 2021 BPS survey reported the area under cultivation. Our recent satellite imagery analysis estimated the area under production in Pangkep in 2020. Table A1.11 reports the data from these three sources. Estimating the area under production is difficult and is currently undertaken based on estimates provided by selected farmers. Satellite imagery provides a more precise calculation because it estimates the area under production, excluding gaps between plots. We found that the total area cultivated at any time in Pangkep during 2020 was 782ha (see Langford et al. 2021 for methodology). In the same year, KKP estimated that 3,431ha were cultivated at any time. This suggests that actual production areas may be greatly overestimated at the provincial and national level – in Pangkep in 2020 by a factor of approximately six. Production data Seaweed production estimates derived from data from different sources are inconsistent, as shown in Table A1.12. KKP statistics are based on volumes sold, so exclude amounts used as propagules, which is appropriate. The Ministry of Industry data suggests that 2.0 million tonnes of seaweed entered supply chains in 2020, while in the same year BPS put this figure at 3.3 million tonnes (excluding amounts used as propagules). The KKP estimated total production at 9.6 million tonnes wet seaweed equivalent sold in the same year. As the Ministry of Industry estimate is based on actual export data, at the national level it is likely to be the most accurate. Table A1.11 Estimated area under seaweed cultivation from different sources (ha) National South Sulawesi Pangkep KKP (2020) 102,254 40,322 3,431 Presidential Decree (2018) 267,800 – – Satellite imagery (2020) – – 782 Table A1.12 Estimated volume of seaweed production from different sources Total volume of production (tonnes) National South Sulawesi Marine Pond Marine Pond KKP RI (2020) 8,090,796 1,456,730 3,442,076 KKP Sulsel (2020) – 2,431,802 996,975 Ministry of Industry (2020) 2,008,760 – BPS seaweed survey (2020) 2,907,662 (volume sold) 351,152 868,191 (volume sold) 222,601 Reconciling seaweed industry statistics 249 If the estimates above on the use of wet seaweed equivalent in the Indonesian carrageenan domestic processing sector and for exports are realistic (2,151,260 tonnes), the KKP statistics (of 9,547,526 tonnes of marine and pond production) are overstated by a factor of 4.8. Summary The inconsistencies revealed in this section highlight the difficulties of providing an accurate statistical depiction of the Indonesian seaweed industry. National export statistics recorded by Customs are likely to be accurate, figures are less likely to be accurate at provincial levels, where inter-provincial or inter-island trade can be more porous. The most accurate sources of data on the domestic industry appear to be agricultural census data (updated every ten years), BPS (2022a) household survey data, Ministry of Industry data and South Sulawesi DKP household participation data. The data presented in Presidential Decree Nomor 33–2019 and KKP production volume and cultivation area data appear to be greatly overstated. After taking into account methods and discrepancies, realistic estimates include: 25,000–33,000 marine seaweed farming households in South Sulawesi and 62,000 across Indonesia; around 2 million tonnes wet seaweed production nationally; and a much smaller cultivation area than that estimated by the KKP, in the range of 42,000 ha nationally. This analysis suggests that, similarly to other agricultural industries, data collection and reporting processes for seaweed should be improved. While this may not be administratively feasible, this would ideally involve collaboration from all government agencies collecting data on the seaweed industry (DKP/KKP, BPS, Ministry of Industry, Ministry of Agriculture). On the production side, this would involve better methods for estimating cultivation areas (based on actual farm boundaries or seaweed producing areas as a whole), more accurate (and perhaps variable) incorporation of assumptions on yield coefficients, explicitly stating whether production includes or excludes propagules and refined assumptions through which estimates of the number of households involved in seaweed are used to reach estimates of the number of people involved in seaweed farming. Ideally, it would also capture data on the number of people from non-seaweed farming households who work in the industry as casual labourers (for more on this, see Chapter 8). Notes 1 Note that Maros has been removed from the dataset due to a known data anomaly. In official data, an additional 16 farmers from Maros are recorded. 2 Carrageenan product conversion rates as reported in Langford et al. 2023. Agar conversion rate assumes 50 per cent weed content and 20 per cent yield. References BPS (Badan Pusat Statistik) 2013. Sensus Pertanian 2013. https://st2013.bps.go.id BPS (Badan Pusat Statistik) (2022a). Hasil Survei Komoditas Perikanan Potensi Rumput Laut 2021 Seri 2. Badan Pusat Statistic. https://www.bps.go.id/publication/2022/08/29/ 250 Langford, Ruhon & Waldron 269de33babc6e3d52bbae5b6/hasil-survei-komoditas-perikanan-potensi-rumput-laut2021-seri-2.html BPS (Badan Pusat Statistik) (2022b). Statistical Yearbook of Indonesia 2022. https://www. bps.go.id/publication/2022/02/25/0a2afea4fab72a5d052cb315/statistik-indonesia-2022. html DKP Prov. SulSel. 2021. Laporan Statistik Perikanan Sulawesi Selatan 2020. Makassar: Dinas Kelautan dan Perikanan Provinsi Sulawesi Selatan. FAO (Food and Agriculture Organisation of the United Nations). 2023. FishStatJ (software for FAO’S Fisheries and Aquaculture statistics). https://www.fao.org/fishery/en/statistics/ software/fishstatj KKP (Kementerian Kelautan dan Perikanan) 2022. Evaluasi kinerja dan rencana kebijakan budidaya rumput laut 2021–2023. KKP 2022. Kementerian Perindustrian Republic Indonesia (Kemenperin). 2022. Kebijakan Industri Pengolahan Rumput Laut. Kementerian Perindustrian 2022. Langford, A., S. Waldron, Sulfahri and H. Saleh. 2021. Monitoring the COVID-19-Affected Indonesian Seaweed Industry Using Remote Sensing Data. Marine Policy 127 (104431): 1–10. doi.org/10.1016/j.marpol.2021.104431 Langford, A., W. Turupadang, and S. Waldron. 2023. Interventionist Industry Policy to Support Local Value Adding: Evidence from the Eastern Indonesia Seaweed Industry. Marine Policy 151 (105561). doi.org/10.1016/j.marpol.2023.105561 Presidential Decree 33–2019 (Peraturan Presiden Republik Indonesia Nomor 33 Tahun 2019 tentang Peta Panduan Pengembangan Industri Rumput Laut Nasional Tahun 2018–2021). Appendix 2 Indonesian seaweed-related policies Fikri Firmansyah Sjahruddin, Yanti N. Muflikh, Scott Waldron, and Risti Permani To outline the complex Indonesian policy landscape, Figure A2.1 presents a hierarchy of Indonesian laws and regulations based on the provisions stated in Law No. 12/2011. The hierarchy or pyramid consists of seven levels, ordered in level of precedence and from national level down to the regional level. In principle, regulations and policies made at lower levels should not contradict the policies at higher levels. The policies made by the central, provincial, and district governments that impact directly or indirectly on seaweed are listed in Table 2.1. The list of policies are drawn from a much more detailed study conducted on the policy landscape and supply chain governance for seaweed in Indonesia conducted by Permani et al. (2023). Sixty-seven policy documents were collected based on desktop research The Decree of the People's Consultative Council Laws and Government Regulation in Lieu of Law Government Regulation 1945 Constitution Presidential Regulation Provincial Regulation Regional Regulation Figure A2.1 The hierarchy of laws and regulations in Indonesia Source: Schematic by authors based on heirarchy described in Law 12 Article 7 the Year 2011. 252 Sjahruddin, Muflikh, Waldron & Permani Table A2.1 Indonesian seaweed-related policies Constitution Policy Description 1945 Constitution Undang Undang Dasar 1945 The Constitution of the Republic of Indonesia outlining the basic principles and structure of the Indonesian government. The Decree of the People’s Consultative Council Ketetapan Majelis Permusyarawatan Rakyat – TAP MPR A major constitutional document produced by the People’s Consultative Council (Majelis Permusyarawatan Rakyat (MPR)) in Indonesia that provides guidelines and directions for the government and Indonesian institutions. Laws Undang-undang Law No. 8/1999 – Consumer Protection Undang-undang No. 8 Tahun 1999 Perlindungan konsumen This law comprises all protections to ensure legal certainty for consumers. Seaweed consumers are protected by this law from illegal sellers’ or traders’ activities. For example, sellers who do not fulfil the agreement. Law No. 31/2004 – Fisheries Undang-undang No. 31 Tahun 2004 – Perikanan In Article 7, verse 5 explanation, seaweed is included as one of the fisheries resources. This law is amended by Government Regulation in Lieu of Law 2/2022. Law No. 9/2006 – Warehouse Receipt System Undang-undang No. 9 Tahun 2006 – Sistem resi gudang Policy base of Indonesian warehouse receipt system. In this policy, seaweed is not specifically listed as a commodity. This law was amended by Law No. 9/2011. Law No. 27/2007 – Coastal and Small Islands Management Undang-undang No. 27 Tahun 2007 – Pengelolaan wilayah pesisir dan pulau-pulau kecil In Article 23, verse 2, aquaculture is listed as one of the small islands’ utilisations. This law was amended by Government Regulation in Lieu of Law 2/2022. Law No. 9/2011 – Amendment of Law No. 9 The Year 2006 Regarding Warehouse Receipt System Undang-undang No. 9 Tahun 2011 – Perubahan atas Undangundang Nomor 9 Tahun 2006 tentang sistem resi gudang Some articles and verses in Law No. 9/2006 regarding warehouse receipt system have been revised. Indonesian seaweed-related policies 253 Law No. 18/2012 – Food Undang-undang No. 18 Tahun 2012 – Pangan Food security is defined as the condition food necessities are fulfilled from an individual to a national level. Seaweed is an edible product and a material resource that contributes to national food security. Law No. 1/2014 – Amendment of Law No. 27 The Year 2007 Related to Coastal and Small Islands Management Undang-undang No. 1 Tahun 2014 – Perubahan atas Undangundang No. 27 Tahun 2007 tentang pengelolaan wilayah pesisir dan pulau-pulau kecil National defence and security were added in the same verse where aquaculture activity was listed. This law was amended by Government Regulation in Lieu of Law 2/2022. Law No. 7/2014 – Trade Undang-undang No. 7 Tahun 2014 – Perdagangan Seaweed products are traded domestically and overseas. Trade is regulated by Law No. 7/2014 (amended by Law 11/2020 – Omnibus Law). Law No. 33/2014 – Halal Product Assurance Undang-undang No. 33 Tahun 2014 – Jaminan produk halal As seaweed products are consumed in Indonesia, halal assurance of seaweed products should follow Law No. 33/2014. This law was amended by Government Regulation in Lieu of Law 2/2022. Law No. 3/2014 – Industry Undang-undang No. 3 Tahun 2014 – Perindustrian Seaweed products are processed at a range of industrial levels. Local industries are bound by this law. Law 11/2020 – Omnibus Law amends the industry law. Law No. 23/2014 – Local Governance Undang-undang No. 23 Tahun 2014 – Pemerintahan daerah This law authorises the division between local and central government authority. Seaweed farms and industries are often regulated at the provincial or district level. Law 11/2020 – Omnibus Law amends this industry law. Law No. 32/2014 – Marine Affairs Undang-undang No. 32 Tahun 2014 – Kelautan In Article 17, verse 2, point c, it is stated that the government manages fisheries resources and facilitates the establishment of fisheries industries that can improve the livelihoods of aquaculture farmers and fishers. This law was amended by Government Regulation in Lieu of Law 2/2022. (Continued) 260 Sjahruddin, Muflikh, Waldron & Permani MMAF Regulation No. 55/2020 – The Procedures, Requirements, and Establishment of Aquaculture Area Peraturan Menteri Kelautan dan Perikanan Republik Indonesia No. 55 Tahun 2020 – Tata cara, persyaratan, dan penetapan kawasan budidaya perikanan The government sets standards for areas to be allocated as aquaculture zones. MMAF Regulation No. 57/2020 – Amendment of Ministry of Marine Affairs and Fisheries Regulation No. 17 The Year 2020 Regarding Ministry of Marine Affairs and Fisheries Strategic Plan 2020–2024 Peraturan Menteri Kelautan dan Perikanan No. 57 Tahun 2020 - Perubahan atas Peraturan Menteri Kelautan dan Perikanan No. 17 Tahun 2020 Tentang Rencana Strategis Kementerian Kelautan Dan Perikanan Tahun 2020–2024 The amendment for Ministry of Marine Affairs and Fisheries Strategic Plan 2020–2024. MMAF Regulation No. 70/2020 – The Organisation and Working Procedure of the Institute for Mariculture Research and Fisheries Extension Peraturan Menteri Kelautan dan Perikanan Republik Indonesia No. 70 Tahun 2020 - Organisasi dan tata kerja Balai Besar Riset Budidaya Laut dan Penyuluhan Perikanan The organisation of the Institute for Mariculture Research and Fisheries Extension was restructured. MMAF Regulation No. 84/2020 – The Organisation and Working Procedure of The Research institute for Seaweed Culture Peraturan Menteri Kelautan dan Perikanan Republik Indonesia No. 84 Tahun 2020 – Organisasi dan tata kerja Loka Riset Budidaya Rumput Laut The organisation of the Research Institute for Seaweed Culture was restructured. MoF Regulation No. 96/2020 – Amendment of Ministry of Finance Regulation No. 11 The Year 2020 Regarding The Implementation of Government Regulation No. 78 The Year 2019 on Tax Allowance for Particular Sector Investments and/or in Particular Regions Peraturan Menteri Keuangan No. 96 Tahun 2020 – Perubahan atas Peraturan Menteri Keuangan No.11 Tahun 2020 tentang pelaksanaan Peraturan Pemerintah No. 78 Tahun 2019 tentang fasilitas pajak penghasilan untuk penanaman modal di bidangbidang usaha tertentu dan/atau di daerah-daerah Tertentu Tax allowances that can be accessed by stakeholders working in seaweed industries. Table A2.1 (Continued) Constitution Policy Description Indonesian seaweed-related policies 261 MoF Regulation No. 153/2020 – Gross Income Deduction for Particular Research and Development Sectors in Indonesia Peraturan Menteri Keuangan No. 153 Tahun 2020 – Pemberian pengurangan penghasilan bruto atas kegiatan penelitian dan pengembangan tertentu di indonesia Tax deductions that can be accessed by stakeholders working in seaweed industries. MoT Regulation No. 14/2021 – Amendment to the Regulation of the Minister of Trade No. 33 The Year 2020 Concerning Goods and Requirements for Goods that Can Be Stored in The Warehouse Receipt System Peraturan Menteri Perdagangan Republik Indonesia No. 8 Tahun 2018 – Perubahan atas peraturan Menteri Perdagangan No. 33 Tahun 2020 tentang barang dan persyaratan barang yang dapat disimpan dalam sistem resi gudang The amendment for commodities that can be stored and access the warehouse receipt system. Seaweed commodities can still access the receipt system. MMAF Regulation No. 22/2021 – Development of Fishery Management Plans and Fishery Management Area Institutions in The Fishery Management Areas of The Republic of Indonesia Peraturan Menteri Kelautan dan Perikanan No. 22 Tahun 2021 – Penyusunan rencana pengelolaan perikanan dan lembaga pengelola perikanan di wilayah pengelolaan perikanan negara republik indonesia Plans to develop Fishery Management Areas (FMAs) and their management institutions. Seaweed farms are located in FMAs. Thus, they will also be managed by FMA. MMAF Regulation No. 27/2021 – Non-Commercial Fisheries Capture and/or Aquaculture Within The Indonesian Fisheries Management Area Peraturan Menteri Kelautan dan Perikanan No. 27 Tahun 2021 – Penangkapan ikan dan/atau pembudidayaan ikan di wilayah pengelolaan perikanan negara republik Indonesia yang bukan tujuan komersial Standards for non-commercial aquaculture activities. Ministerial decree Keputusan Menteri MMAF Decree No. 2/2007 – Good Fish Farming Practices Keputusan Menteri Kelautan dan Perikanan No, 2 Tahun 2007 - Cara budidaya ikan yang baik This ministerial decree sets standards for best aquaculture practices in Indonesia. (Continued) 262 Sjahruddin, Muflikh, Waldron & Permani MMAF Decree No. 1/2019 – The General Guidelines for Seaweed Farming Keputusan Menteri Kelautan dan Perikanan No, 1 Tahun 2019 – Pedoman umum pembudidayaan rumput laut Potential development and requirements for seaweed aquaculture. Seaweed farming and harvesting methods, environmental management, human resources, supervisory, monitoring, and the evaluation of seaweed aquacultures are set outlined in this guideline. Provincial regulations Peraturan Provinsi South Sulawesi Regulation No. 9/2009 – Sulawesi Selatan Spatial Plan 2009–2029 Peraturan Daerah No. 9 Tahun 2009 – Rencana tata ruang wilayah provinsi sulawesi selatan tahun 2009–2029 This regulation was replaced by the South Sulawesi Regulation No. 3/2022. Originally, this regulation set the spatial planning for South Sulawesi Province 2020–2029. South Sulawesi Regulation No. 7/2018 – South Sulawesi Industrial Development Plans 2018–2038 Peraturan Daerah No. 7 Tahun 2018 – Rencana pembangunan industri Provinsi Sulawesi Selatan 2018–2038 Seaweed industries are to become priorities for South Sulawesi Province industry development. South Sulawesi Regulation No. 2/2019 – Coastal and Small Islands Zonation Plan of South Sulawesi Province 2019–2039 Peraturan Daerah No. 2 Tahun 2019 – Rencana zonasi wilayah pesisir dan pulau-pulau kecil Provinsi Sulawesi Selatan Tahun 2019–2039 This regulation set the coastal and small islands zonation plan 2019–2039. However, it was replaced by South Sulawesi Regulation No. 3/2022. South Sulawesi Regulation No. 3/2022 – Spatial Planning of South Sulawesi Province 2022–2041 Peraturan Daerah Sulawesi Selatan No. 3 Tahun 2022 – Rencana tata ruang wilayah Provinsi Sulawesi Selatan tahun 2022–2041 This regulation legalises the Spatial Planning of South Sulawesi Province 2022–2041 and replaces the previous regulation South Sulawesi’s Governor Regulation No. 9/2009. South Sulawesi’s Governor Regulation No. 3/2018 – The Organisation and Hierarchy of The Marine Office Branch of South Sulawesi Marine Affairs and Fisheries Office Peraturan Gubernur Sulawesi Selatan No. 3 Tahun 2018 – Organisasi dan tata kerja cabang dinas kelautan pada Dinas Kelautan dan Perikanan Provinsi Sulawesi Selatan The governor sets the organisational structure for the Department of Marine Affairs and Fisheries branch offices. Table A2.1 (Continued) Constitution Policy Description Indonesian seaweed-related policies 263 Nusa Tengara Timur’s Governor Regulation No. 39/2022 – Fisheries Commodity Trading System Peraturan Gubernur Nusa Tenggara Timur No. 39 Tahun 2022 – Organisasi dan tata kerja cabang dinas kelautan pada Dinas Kelautan dan Perikanan Provinsi Sulawesi Selatan The governor can ban dried seaweed from being traded outside the province. Regional regulations Peraturan Kabupaten Luwu Utara’s Head District Regulation No. 23/2008 – Seaweed Aquaculture Zonation in Luwu Utara Marine Territory Peraturan Bupati Luwu Utara No. 23 Tahun 2008 - Zonasi budidaya rumput Laut di wilayah perairan Kabupaten Luwu Utara This regulation tried to reduce conflict between seaweed farmers and other groups. Thus, it regulates and allocates areas specifically for seaweed farming. The unit area for seaweed farming is defined as a 1ha square and 3m deep at the lowest tide. The space between each square should be at least 25m. Seaweed squares cannot be allocated in water more than 4 miles from the shore. Bone’s Head District Regulation No. 2/2013 – Bone Regency Spatial Management Plan 2012–2032 Peraturan Bupati Bone No. 2 Tahun 2013 – Rencana tata ruang wilayah Kabupaten Bone tahun 2012–2032 This regulation sets up the spatial management plan for Bone District, South Sulawesi. Seaweed farms are allocated to some regions within sub-districts: a) Awangpone, b) Cenrana, c) Tellu Siattingnge, d) Tanete Riattang Timur, e) Barebbo, f) Sibulue, g) Mare, h) Tonra, i) Salomeko, j) Kajuara. The seaweed farming programme was implemented between 2012 and 2016 and should be in its evaluation phase from 2017–2031. Note: Ministerial abbreviations used in the table: Ministry of Marine Affairs and Fisheries (MMAF), Ministry of Finance (MoF), Ministry of Industry (MoI), Ministry of Cooperative, Small–Medium Enterprises (MoCSME), Ministry of Maritime and Investment Affairs (MoMIA), and Ministry of Trade (MoT). 264 Sjahruddin, Muflikh, Waldron & Permani and interviews with key informants. The policies cover regulations related to the seaweed supply chain, including production, distribution, consumption, and research and development. The policy documents listed in Table 2.1 can be obtained through the website of the Information and Law Documentation Network (Jaringan Dokumentasi dan Informasi Hukum (JDIH)) of the respective ministry or local government. For example, MMAF Regulation No. 17/2019 can be found on the Ministry of Marine Affairs and Fisheries (MMAF) JDIH website (https://jdih.kkp. go.id). References Indrati, M. F. 2021. Konstitusi dan Konstitusionalisme. Jakarta: Mahkamah Konstitusi Republik Indonesia. Permani, Risti, Yanti Nuraeni Muflikh, Nunung Nuryartono, Scott Waldron, Alexandra Langford, Syamsul H. Pasaribu, and Fikri Sjahruddin. 2023. The Policy Landscape and Supply Chain Governance of the Indonesian Seaweed Industry: A Focus on South Sulawesi. Melbourne, Australia: Australia-Indonesia Centre. https://pair. australiaindonesiacentre. org/wp-content/uploads/2023/06/FINAL-REPORT_ENG_TWP-3_The-policylandscape-and-supply-chain-governance-of-the-Indonesian-seaweed-industry_-A-focuson-South-Sulawesi-2.pdf Rumiarta, I. N. P. B. 2015. Kedudukan Peraturan Menteri Pada Konstitusi. Kerta Dyatmika, 12 (2): 15. Supryadi, A. and Amalia, F. 2021. “Kedudukan Peraturan Menteri Ditinjau Dari Hierarki Peraturan Perundang Undangan Di Indonesia.” Unizar Law Review (ULR) 4 (2): 00. Appendix 3 Institutions in the Indonesian seaweed industry Fikri Firmansyah Sjahruddin, Yanti N. Muflikh, Scott Waldron, and Risti Permani A wide range of organisations are active in the Indonesian seaweed industry through policy, regulation, research and development, education and training, and industry support services. The list of organisations compiled in Table A3.1 is based on supply chain studies by Permani et al. (2023), Hogervorst and Kerver (2019), and Waters et al. (2019). Table A3.1 List of organisations involved in Indonesian seaweed industry Ministries Ministry of Marine Affairs and Fisheries (Kementerian Kelautan dan Perikanan) Ministry of Industry (Kementerian Perindustrian) Ministry of Trade (Kementerian Perdagangan) Ministry of Cooperatives and Small–Medium Enterprises (Kementerian Koperasi dan Usaha Kecil – Menengah) Ministry of Finance (Kementerian Keuangan) Coordinating Ministry for the Economy (Kementerian Koordinator Bidang Perekonomian) Coordinating Ministry of Maritime and Investment Affairs (Kementerian Koordinator Bidang Maritim and Investasi) Government departments and agencies Agency for Development Planning, Research, and Development of South Sulawesi Province (Badan Perencanaan Pembangunan Daerah, Penelitian, dan Pengembangan Provinsi Sulawesi Selatan) Department of Marine Affairs and Fisheries of South Sulawesi Province (Dinas Kelautan dan Perikanan Provinsi Sulawesi Selatan) Department of Marine and Fisheries of Takalar Regency (Dinas Kelautan dan Perikanan Kabupaten Takalar) Fisheries Department of Luwu Regency (Dinas Kelautan dan Perikanan Kabupaten Luwu) Department of Fisheries and Marine Affairs of Bantaeng Regency (Dinas Kelautan dan Perikanan Kabupaten Bantaeng) Investment and trading Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal) Commodity Futures Trading Regulatory Agency, Ministry of Trade (Badan Pengawas Perdagangan Berjangka Komoditi) (Continued ) [Document text truncated for crawler view.]