Feasibility of small-scale sago industries in the Maluku Islands, Indonesia

Abstract

The sago industry has a pivotal role to exploit underutilized sago starch in the sago forest but is little known in terms of the feasibility of existing sago-processing industries, particularly in small islands. This paper outlines the feasibility and possible future development of existing sago industries in Maluku, Indonesia. Data were collected from field observations, in-depth interviews, and focus group discussions from nine small-scale sago industries in Ambon and Seram Islands. Existing sago industries were found financially feasible in the short term but may be unsustainable over the longer term. Modern sago industries are 25 times higher in investment and operational costs but 15 times higher in production, up to 4 times higher in labor absorption, and 5 times higher in profit than that of semi-modern industry technology. However, modern sago industries are difficult to sustain because of the high price of raw material, uncertain market demand, fragile institutional development, and uncertain sago forest sustainability in the islands because the cutting of sago trees occurs about 15 times faster than that of conventional technology industry. This suggests that sustainable sago industries for food security in Maluku need adaptive technology to improve added value and to reduce operational costs and be small scale but intensive and efficient.