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Nembrala Seaweed Cultivation - Final Report

Project Background

In 2004 Opportunity International recognised the potential of Seaweed Cultivation as a means of assisting poor coastal farmers to increase their incomes. Our local partner TLM began a trial program that established the type of loan products and training materials that would best serve
farmers already engaged in, or who have the potential to establish, a Seaweed Cultivation Plot. Following this trial, in June 2004, TLM formally established a Rural Service Post in Nembrala, a village on the island of Rote in Nusa Tenggara Timur (NTT), to launch its Seaweed Cultivation
Program. Cult Industries supported this Project by providing the funding for the building and fitout of the Service Post, the loan portfolio for the Program, and information and training services for poor farmers.

The Program has brought numerous benefits to this poor community. The impact of Seaweed Production is very significant in small coastal communities. Most families have vegetable gardens that they manage in the wet season (Dec – Mar), but often these gardens are unproductive in the
long dry season (Apr – Nov). Traditionally, during the dry season farmers live off dried corn and other stored vegetables, and buy other necessities from the money they have received from the sale of any extra vegetables grown in the wet season. The seaweed grows best during this dry season, making it an excellent “cash crop” for farmers who have little agricultural activity during this period.

Establishing Rural Service Posts is an innovative approach that allows TLM to achieve greater cost efficiencies in its efforts to reach remote areas of need. Service Posts act as satellite offices attached to existing TLM Branches and give TLM presence in communities that would not normally receive many community development services due to their remoteness. The Nembrala Service Post is attached to the Rote Branch in Baa, and is the first of its kind to be established by TLM.

Project Objectives

The objectives of this Project include:

Provide remote communities in Nembrala with the opportunity to engage in businesses appropriate to their surrounds through the introduction of the Rural Service Posts and the Seaweed Cultivation Program
Improve the income and lifestyles of people in Nembrala
Poor communities will acquire Seaweed Cultivation skills and knowledge to engage in a profitable business which they would not normally have the opportunity to acquire
Improved capacities of TLM, in particular the ability to reach the poor living in rural and remote areas who are otherwise not served with appropriate micro enterprise opportunities

The key deliverables (outputs) agreed on for this Project include:

250 clients receiving loans valued at A$100 on average,
Establishment of the Rural Service Post to implement the Seaweed Cultivation program in Nembrala,
Establishment of an information Centre at the Rural Service Post that will provide support and information for Seaweed clients, including a Best Practice Demonstration,
The use of the OI Network standard Common Impact Monitoring System (CIMS) to assess the impact of the project,
The establishment of a Management Information System (MIS) to manage the program, and
1 staff member servicing the Service Post and trained as required.

Project Outcomes

The major development objectives set have been successfully achieved. Through the establishment of the Rural Service Post, TLM began to implement its strategy to improve its presence in poor rural and remote areas as well as its ability to manage a Seaweed Cultivation Program that provides enterprise opportunities suitable to poor families living in coastal communities.

Seaweed cultivation is a major source of income for families in Nembrala. The introduction of this Rural Service and the Seaweed Cultivation lending program has allowed TLM to concentrate on developing this particular industry for the local farmers in Nembrala and neighbouring villages.
This Rural Service Post has provided rural Micro Enterprise Development (MED) services to 450 poor families, improving the lives of approximately 1,800 people living in poverty.

With the loan funds provided for this Project by Cult Industries, TLM has disbursed loans to 292 Seaweed farmers; 42 more loans than originally expected which was possible due to the smaller loan amounts given to the farmers.

As reported in the 6 month report, TLM was largely focused on implementation, training and education during this period and most of the loans were disbursed and farmers equipped to engage in Seaweed Cultivation. The Information Centre at the Service Post has been supplied with an array of industry specific and general lifestyle information and educational resources.

During the last 6 months, TLM has continued to deliver the Program while conducting research and improving Seaweed Cultivation techniques, including methods to reduce the occurrence of a common seaweed disease, “Ice Ice”. TLM also established links with buyers across Indonesia to improve the sale price of the seaweed product on behalf of poor farmers. This in turn has led to improvements in seaweed cultivation practice in Nembrala and the surrounding communities.

The increased income has opened up opportunities available to these farmers by helping them increase their plot size and the quality of the seaweed they produce, supplement their income by teaching them of the benefits of seaweed related activities such as growing seedlings, and facilitating improvements in the local seaweed markets which have been subject to a monopoly over prices.

Key Achievements

Rural Service Post built and fully equipped to deliver the Seaweed Cultivation Program. By May 2005 the Post was serving 450 active clients and impacting approximately 1,800 people living in poverty.
Seaweed Cultivation Program implemented, including all training material, equipment and resources.
Loan funds provided to 292 farmers, impacting the lives of approximately 1,168 people living in poverty, significantly increasing their income and reducing their vulnerability to external events, such as the presence of disease on the island.
Training and support given to 250 farmers to improve the quality of their businesses.
Establishing links between Nembrala and other small isolated communities on the island of Rote with the national and international market.
Strengthening social awareness within the local communities. TLM has not only played a role in the economic development of the community, but has also played an important role in the social and personal development of the people of Nembrala. It holds community meetings that bring together various groups, including local government, village leaders, local farmers, local business people, and women. These meetings have stimulated discussion and provided a platform for ideas to advance other community goals such as tourism and the arts and crafts.
Research and development into seaweed cultivation, in particular growing seedlings as an additional source of income for farmers, and an alternate cultivation method. As a result of these efforts, about 80% of TLM’s clients are growing their own seedlings which at this stage are providing about half of the seedlings needed for the farmers’ crops. This saves farmers the expense of purchasing seedlings, guarantees the supply of seedlings for their ongoing business, and also teaches them about entrepreneurship and business savvy.
Improvements in the overall practice of seaweed cultivation, including improving the skills, knowledge and attitude of farmers, through training and mentoring resulting in the production of better quality Seaweed. This includes using modern equipment, such as the pressing machine and drying racks, and tackling the issue of “Ice Ice”.
Laid the foundations for TLM’s expansion into Seaweed Production Business Development Services (BDS), which will establish operations within the industry that will improve the bottom line for the poor and significantly increase the financial benefits possible through Seaweed Production to the poor communities in Nusa Tenggara Timur (NTT).

Accomplishments and Challenges

Expansions in the size of cultivation plots initially enabled farmers in Nembrala to increase the quantity of their harvest. This in turn increased the income earned by the farmers. In the last six months the price of dried seaweed increased from the set price of Rp. 4,800 (A$0.68) per kilogram
to Rp. 5,100 (A$0.73), as some new buyers entered the local market in Nembrala and loosened the monopoly over seaweed buying that existed on the island of Rote. Although these new buyers have not remained in Nembrala, due to their limited capital, the increase in the price of dried Seaweed has remained.

However this gain was offset by damage caused by a seaweed disease called “Ice Ice”, the only disappointment in this Project. “Ice Ice” attacks seaweed at the start of the wet season (September to December) and was identified from the outset as the major risk to the Seaweed Program.
However the disease remained in the water around Nembrala from January through to April in 2005, destroying part of the farmers’ crops, which then reduced the amount of seaweed harvested and sold.

The “Ice Ice” problem has caused the quantity of seaweed produced over the Project period to be below expectations and resulted in a decline in the farmers’ income since the last report.

Importantly, TLM has been effective in minimising its clients’ vulnerability to this unexpected event. Although the profits earned by farmers in the last six months of the Project is less than what they earned in the first six months, they have still earned more than before the introduction of the Seaweed Cultivation Program in June 2004. Without the assistance of TLM, many of these farmers would have seen all of their income wiped out due the presence of this disease. Instead, before the disease struck the area, they were able to build their assets (increase the size of their plots) and accumulate savings that allowed them to maintain an income to support their families and continue their businesses.

The situation with the disease has improved since May 2005, and TLM has employed a seaweed specialist to address the prevalence and impact of “Ice Ice” on seaweed cultivation in the Nembrala area. The “Ice Ice” disease is not isolated to Nembrala or Rote, it is an industry wide issue that
requires more research and TLM is remaining abreast of the latest developments. To help farmers who experienced a reduction in their expected income, TLM was flexible with the loan repayments. These issues have not affected TLM’s operational needs.

The average profit of a client in the last six months is Rp 295,089 or A$42 per month. Without the damage caused by “Ice Ice”, these farmers would earn nearly double this, approximately A$75. After multiple loan cycles farmers usually have larger plots to facilitate greater earnings. TLM is working hard with its clients to reduce the impact of disease and increase their clients’ profits to their previous levels and beyond.

Project Impact

Since TLM has had a presence in Nembrala, the general prosperity of the areas has increased significantly. The number of clients that own their own home and/or have a permanent home made of brick or cement and not the traditional palm wood has risen and is now higher than in any of the surrounding areas and other comparable communities where TLM operates. While other influences may have contributed to this improvement in quality of life, client surveys point to the volume and quality of seaweed produced with the assistance of TLM’s Seaweed Cultivation Program as being directly related.

Health is a major issue affecting the lives of the poor that drains both their time and financial resources. The government run services in Nembrala are not adequate and many people have to travel to Baa for health services, a 2-3 hour car trip. Since commencing this Project, TLM has helped improve the health of its clients as demonstrated by the decrease in working days lost due to illness. In an impact assessment conducted by TLM in December 2004, 60% of clients took between 3-7 days off work, whereas in the recent assessment, only 32% off clients needed to take days off due to illness. This has largely been achieved through training and providing information to the community on health and disease at the Service Post.

In addition to the expected outcomes, this Project has shown TLM the vast opportunities within the seaweed industry that can be developed for the benefit of poor rural communities in the region. The Project has laid a solid foundation for TLM’s future growth in Seaweed Production enterprise development. The details of this initiative will be provided in a separate proposal to Cult Industries.

OIA Project Management

OIA has worked closely with TLM on the development, implementation and management of this Project. It represents one of the first steps into large scale innovative rural MED for TLM and has significantly enhanced its experience in this area. Similarly, OIA is increasingly supporting the work of its Implementing Partners that are consolidating but moving beyond just traditional urban focused MED. OIA’s Project Manager for Indonesia developed the Monitoring & Review processes (which were formally conducted twice in the 12 month Project period) to track and assess the progress and performance of this Project, as well as assist in capacity building and the Project design related to this Project and to the future BDS project. The Project Manager has facilitated an exchange of information, finalised project reports, and supported the Donor Relationship Managers.

In April 2005, OIA conducted a field assessment of the Nembrala Project which contributed significantly to this final progress report and to the ongoing support and management of the Seaweed Cultivation and BDS Projects.

In addition, OIA’s Technical Resource Manager for Indonesia and East Timor has worked closely with TLM to improve many areas that are necessary to maintain the quality of TLM’s overall capacities.

Use of Project Funds

TLM has expended 100% of the funds provided for this Project. The costs for training, information centre development, CIMS and seaweed best practice were actually less than originally expected. However, the costs involved in building the Service Post exceeded the original budget. The total
cost of this Project exceeded the funding received by only A$25, with the balance being contributed by TLM.

Lessons Learnt

TLM has recognised the opportunities for poor seaweed farmers that can be improved if the province of NTT is linked with the wider domestic and international markets. The Seaweed Production BDS initiative has been developed to capture these opportunities and establish various operations and enterprise development programs that expand the current Seaweed Cultivation Program. TLM has begun its trials for Seaweed Production BDS which will run till August 2005. A strategy is being developed to implement this Program over the next 3 years.
TLM has been learning how to lessen the impact of the “Ice Ice” disease on seaweed farmers. As the disease is an external risk that is only partially predictable, further efforts are required to reduce its presence. TLM will continue to educate farmers on how to avoid the disease, how to manage attacks on their plots, and strengthen poor communities’ ability to lessen the severity of the disease in practical and creative ways. The BDS Program is expected to address many of these issues.
TLM is learning that the poor don’t only want economic prosperity, they also want to maintain cultural heritage, ensure their children are educated and have adequate health care services. The community looks to TLM to provide these services, making their presence at the Service Post very important for the community’s perception and the success of the program.
In developing its BDS Program, TLM met with the farmers and the wider community to discuss the potential opportunities for Seaweed Production, determine the best options for the Program, and establish realistic expectations and priorities from all the possibilities.

APPENDIX 1: Project Activities and Achievements

According to the milestones/workplan agreed on in the project Concept Paper, TLM has engaged in the following activities and achieved the following outputs:

Planned Output according to Project Concept Paper	Activities & Results at Six Months	Related Activities and Achievements at Twelve Months	Reasons for Variation
250 clients receiving loans valued at A$100 on average	• 241 loans • Average loan size of A$82	This Project has provided 292 loans to date, with an average loan size of A$86, less than the planned average loan size of A$100. Due to the smaller loan size provided to each farmer, more loans were able to be provided (see next column). Overall, 450 farmers received loans managed by the Rural Service Post. As indicated above, more than half of these loans were funded by Cult Industries.	Six months into the project the average loan size was lower than targeted because many clients were affected by the Seaweed disease during the year and had to re-establish their crops. Many chose to borrow smaller amounts for this purpose; enough to ensure the viability of their crop, but at the same time not over commit loan repayments until their business was reestablished. The smaller loans helped farmers continue their businesses on a smaller scale and not run the risk of falling into debt. However, in the last 6 months the prevalence of disease remains a significant issue for the Program. Farmers reported that they were still having difficulty repaying their loans as a result of the disease on the quantity of their crops. Loan repayments were made flexible in light of the damage done by the disease. This has allowed farmers to fulfil their responsibilities, but also provides enough income to continue the program while helping farmers manage the disease.
Establishment of the Rural Service Post in Nembrala to implement the Seaweed Cultivation Program.	• The Service Post has been fully constructed and all the required utilities and equipment were installed by August 2004.	None to report. This output was achieved and reported in the 6 month report.	None
Establishment of an Information Centre at the Rural Service Post that will provide support and information for Seaweed clients.	• The Information Centre was established in August 2004 with a variety of training and educational materials • 55 farmers received training on seaweed disease and its prevention as well as post harvest seaweed production developments such as jelly and candied seaweed	250 farmers have received seaweed cultivation training and accessed the information provided at the Service Post. No new material has been developed however it was necessary to reprint much of the existing material. Some clients practiced jelly and candied seaweed production but at present have not been gained income from this skill because they choose to put all their capital into the cultivation plots. This is the safer investment for them until the market for this type of product expands. One of TLM’s best performing clients was sent to the PENSA (a World Bank Body) Indonesian Seaweed Farmers Conference in Bali to represent Rote. This farmer returned with much of the information and news gained from the Conference for TLM and its clients, and will act as a contact point for this Network in the future.	None
Best Practice Demonstration including the installation of a Seaweed Drying Rack, a Pressing Machine and trials of various cultivation methods.	• Seaweed Rack built in the Service Post for training & demonstrations • Seaweed Pressing Machine installed at the Service Post for training and demonstrations • TLM partnered with the local University (The University of Kristen Artha Wacana – Fishery Faculty) to trial various cultivation methods. • Demonstration plot was used to grow seedlings that were in short supply during the first 6 months of project.	This equipment continues to be used for client training at the Post. TLM has harvested the demonstration with the seaweed seedlings 7 times and has been able supply its clients with a small amount of seedlings to make up for the short supply experienced in Rote in late 2004. In addition, as a result of TLM’s training (see next column), about 80% of the farmers have begun to grow their own seedlings and are supplying about half of their own crops thereby saving on costs. A trial of an alternate cultivation method, “Apung” was conducted in the demonstration plot. This method involves seedlings tied to a bamboo raft held down by ropes to float on the top of the water with seaweed growing below. This method, used in other areas, was not successful due to the sea characteristics in Nembrala.	TLM has changed the focus of its plot cultivation land for the following reasons: • TLM believe that there is considerable potential for its clients in the production of Seaweed seedlings. • By farming the plot to grow seedlings, TLM is educating the farmers in the benefits of engaging in seedling growth, and encouraging its practice to reduce the dependency of its clients on external suppliers. • TLM has found that seedling cultivation is a good additional source of income for clients, which has proven to realise quicker turnover in profits.
The use of the OI Network standard Common Impact Monitoring System (CIMS) to assess the impact of the project.	• 10% of the Project recipients were surveyed for a CIMS report in October 2004.	CIMS has been implemented and 47 clients surveyed, (about 17% of the clients receiving loans from this Project). - 38% were in their first loan cycle - 62% were in an subsequent loan cycle - 30% were women A CIMS report was completed in April 2005.	None
The establishment of a Management Information System (MIS) to manage the program.	• An automated MIS system has not been established in the Service Post.	None to report. There has been no change since the 6 month report.	It was decided that an MIS would not be implemented for the following reasons: • Administering loans manually has proven to be more efficient and time effective given the workload and time commitment of field officers to clients, and because there is no administration officer in the Service Post to manage an automated system • An appropriate MIS system has been installed at the associated Branch in Baa. Inputting the data delivered by the Service Post Field Officers at the Baa Branch on a weekly basis has been sufficient.
1 staff member servicing the post and trained as needed.	• 4 staff had been employed at the Post. • All staff received the appropriate training from TLM.	TLM has further employed a Seaweed Cultivation Specialist to assist with its further Seaweed Project and operations. This specialist will also assist with the outbreak of seaweed disease in Nembrala.	Given the operation size and needs, TLM increased the number of staff at the Service Post. It was decided that TLM needed a specialist in Seaweed Cultivation to assist with this Program; the additional employee has valuable Seaweed Cultivation experience but was not considered a specialist. Furthermore, TLM is expanding its Seaweed Operations with the Business Development Services (BDS) and fighting the “Ice Ice” disease.