The Ministry Of Industry Calls The Need For Downstreaming Of Lada To Boost IKM Growth

Director General of Small, Medium and Multifarious Industries (IKMA) of the Ministry of Industry Reni Yanita. Photo: Doc. Ministry of Industry

JAKARTA - Indonesia has very many spice commodities, for example, pepper, nutmeg, cloves, ginger, cinnamon, and so on. With these wealths, spices are business opportunities that can be developed to the international market.

Many spices are currently being developed in Indonesia as a business field for Small and Medium Industries (IKM).

To help the growth of IKM, the development of pepper processed products in various producing areas, such as in Bangka and East Lampung, still faces various challenges.

For example, the availability of fluctuating raw materials, limited technology and machinery and less meet standards, as well as underprivileged human resources.

In addition, there are still many buildings, equipment, and sanitation in pepper processing IKM businesses that do not apply standardization and food safety systems.

The Director General of Small, Medium and Multifarious Industries (IKMA) of the Ministry of Industry, Reni Yanita, said this caused the specifications of the final product to be inconsistent.

"Therefore, we need guidelines that regulate processing procedures so that they can produce products that are safe, quality, and fit for consumption according to Hazard Analysis and Critical Control Point (HACCP) standards," said Reni in a written statement received by VOI, Monday, September 25.

Reni said that the uncertain selling price of pepper has sometimes decreased the value of pepper exports.

"The selling price is fluctuating so that even though the volume of exports increases, in terms of value it still decreases. It is important to do downstreaming in order to increase the added value of pepper. For example, exported in the form of concocted spices," he said.

In order to support the development of IKM for spices, especially for pepper commodities, the Directorate General of IKMA continues to facilitate IKM players in terms of increasing technology and production capacity through machine and/or equipment restructuring programs, improving product packaging quality, improving food security systems through HACCP certification, increasing the added value of spice commodities in producer centers, as well as facilitating promotions through exhibitions for market expansion.

"The guidance from the Directorate General of IKMA continues to be carried out from upstream to downstream. We not only pay attention to the side of the production site, but also facilities and infrastructure, product quality, management and export product standards, to promotional strategies," said Reni.

The Directorate General of IKMA also continues to boost the added value of spice commodities in spice-producing centers, namely through the revitalization of centers with Special Allocation Funds (DAK), including the development of the Olahan Lada IKM Center in Bangka Regency and Sambas Regency through DAK for the 2022 fiscal year.

The Lada Center of Bangka Regency is located in the Jelite Industrial Designation Area with an area of 1,200 square meters. The construction of the revitalization of the central building is carried out using the physical DAK budget, including for the procurement of machinery and supporting equipment.

Not only in the two districts, the Directorate General of IKMA has also developed the East Lampung Regency IKM Lada Center since last year through production technical guidance and food safety systems, as well as facilitation of machine and equipment assistance.

The IKM Lada Center for East Lampung Regency has also been designated as a Foreign Exchange Village which is the result of a collaboration between the Directorate General of IKMA and the Indonesian Export Export Financing Agency (Indonesia Eximbank).

"In the pattern of developing pepper downstream IKM centers through DAK, the Directorate General of IKMA facilitates the formation of ecosystems involving pepper farmers, the processing industry, and exporters to be able to produce quality pepper processing and ready to be marketed to large industries, premium retail, as well as to the hotel, restaurant, and cafe or horeka sector sector," he said.