South Sulawesi seaweed industry key to poverty reduction and global competitiveness

Indonesia is the largest producer of carrageenan seaweeds, widely used as gelling agents in food processing, and South Sulawesi produces 20% of the global supply.

The Indonesian Government has recognised its critical role in poverty reduction within coastal communities, however the needs of farmers, traders, and processors are poorly understood, preventing the implementation of effective policy.

PAIR researchers are analysing South Sulawesi’s seaweed industry to better understand its drivers, value chain, impact on over 35,000 coastal households, and effects of COVID-19.

Key findings

Industry drivers

• Global demand for hydrocolloid seaweeds, including carrageenan, has risen with demand for processed foods, which has driven the expansion of seaweed farming across Indonesia over the last 20 years.
• Indonesia’s seaweed production is concentrated along the South Eastern coastlines of South Sulawesi, which produce over a third of Indonesia’s total seaweed supply and 20% of global supply of carrageenan seaweeds.

Value chain

• The seaweed value chain consists of six key activities: phyconomy (extensive cultivation of seaweeds, their sustainability and economic value), cultivation and livelihoods, domestic marketing, processing, international marketing, and policies and institutions.
• Seaweed is typically produced by small farmers who also produce other products. Researchers found that coastal residents often report earning higher incomes from seaweed farming than other activities. However, the profitability of different systems varies significantly, and the low uptake of new technologies limits productivity and income generation.

Livelihoods

• Critical factors affecting the sustainable livelihoods of the seaweed industry include the interaction between seaweed farmers’ capital assets, vulnerability context, policies and institutions, livelihood strategies and livelihood outcomes.
• Researchers developed a model to help households make decisions about how best to use their time for seaweed cultivation (by season) and to compare with other activities.

COVID-19 impact

• The global pandemic has created new and significant challenges for seaweed farming communities while simultaneously limiting the ability of researchers to enter these communities and explore these challenges.
• Researchers developed a method for utilising satellite data to monitor seaweed production in South Sulawesi during the pandemic.

Recommendations

Indonesian seaweed is competitive globally, and it is becoming more important to the Indonesian economy. But Indonesia can do more to take advantage of their position and needs to develop a strategy to do so.

Researchers will continue to investigate the seaweed industry in South Sulawesi in the next phase of their research and formulate a set of policy recommendations to support:

• Improved, sustainable phyconomic practices
• Sustainable and just livelihood transitions
• Equitable and efficient domestic marketing system
• Efficient and profitable processing sector
• Indonesia’s competitiveness in global supply chains
• Sustainable development of the industry through effective policy

The research team

PAIR research area: Commodities

Senior Fellows: Prof. Nunung Nuryartono (IPB), Dr Scott Waldron (UQ)

Associate Fellows: Dr Sulfahri (UNHAS), Dr Alexandra Langford (UQ), Dr Kustiariyah Tarman (IPB), Dr Syamsul H. Pasaribu (IPB),  Dr Ulfah J. Siregar (IPB), Dr Muhammad Farid Dimjati Lusno (UNAIR)

Photo by Agung  Pananrang in Bone, South Sulawesi

The research team will discuss their findings at the PAIR Virtual Summit Day 1 (24 November 2020)

Register for ‘Sustainable development of South Sulawesi’s seaweed industry’ here