Analisis Daya Saing Peternakan Ikan Patin Di Kecamatan Kota Gajah, Kabupaten Lampung Tengah, Provinsi Lampung

ANALYSIS OF THE COMPETITIVENESS OF PANGASIUS
FISH FARMING IN KOTA GAJAH SUB-DISTRICT,
LAMPUNG TENGAH DISTRICT, LAMPUNG PROVINCE

ANGGA YUDHISTIRA

GRADUATE SCHOOL
BOGOR AGRICULTURAL UNIVERSITY
BOGOR
2015

STATEMENT OF THESIS, SOURCE OF INFORMATION
AND COPYRIGHT*
I hereby declare that thesis titled Analysis of the Competitiveness of
Pangasius Fish Farming in Kota Gajah Sub-District, Lampung Tengah District,
Lampung Province, was independently composed by me under the advisory
committee supervision and has not been submitted to any other universities.
Source of information derived or quoted from works published and unpublished
from other writers have been mentioned in the text and listed in the bibliography
at the end of this thesis.
I hereby assign the copyright of my thesis to the Bogor Agricultural

University.
Bogor, May 2015
Angga Yudhistira
H451110511

* Copyright transfer due to the collaborative research work with other parties outside the
Bogor Agricultural University should be based on a related agreement.

SUMMARY
ANGGA YUDHISTIRA. Analysis of the Competitiveness of Pangasius Fish
Farming in Kota Gajah Sub-District, Lampung Tengah District, Lampung
Province. Supervised by HARIANTO, NUNUNG KUSNADI, STEPHAN
WESSELS and BERNHARD BRÜMMER.
This study examines data on pangasius fish grow-out business as practiced
through earthen pond aquaculture system in Kota Gajah (KoGa) Sub-District,
Lampung Tengah District, Lampung Province, Indonesia. KoGa is famous in the
utilization of local resources as cheap and sustainable input for pangasius fish
farming business. The study estimates the competitive and comparative
advantages of the pangasius fish farming business using the Policy Analysis
Matrix (PAM) method to determine the Private Cost Ratio (PCR) and Domestic

Resource Cost Ratio (DRC). Sensitivity analysis was performed to measures the
responsiveness of the PCR and DRC to the changes of key parameters in
pangasius fish farming.
The result shows that pangasius fish farming in KoGa has competitive and
comparative advantage, as confirmed by PCR and DRC that less than one. Trade
policy on output, especially policy on controlling the imported pangasius fish and
the feed pellet machine subsidy, has given the local pangasius fish farmer an
opportunity to sell their product 12.34 percent higher than its world market price.
Policy on inputs is not really providing protection to the pangasius fish farmers
but still generate positive private and social profits. Divergences in domestic
factors are limited to feed pellet machine subsidy that really helps the farmer to
produce low cost fish feed with local sustainable ingredients. Comparative
advantage of pangasius fish farming in KoGa is sensitive to the change in
pangasius fish fillet FOB price and alternative fish feed price. Whilst the
competitive advantage is sensitive only to the changes in the alternative fish feed
price.
Keywords: Pangasius fish, competitive advantage, comparative advantage, PAM

RINGKASAN
ANGGA YUDHISTIRA. Analisis Daya Saing Peternakan Ikan Patin di

Kecamatan Kota Gajah, Kabupaten Lampung Tengah, Provinsi Lampung.
Dibimbing oleh HARIANTO, NUNUNG KUSNADI, STEPHAN WESSELS, dan
BERNHARD BRÜMMER.
Studi ini menguji data usaha pembesaran ikan patin yang dilakukan
dengan menggunakan sistem budidaya ikan di kolam tanah di Kecamatan Kota
Gajah (KoGa), Kabupaten Lampung Tengah, Provinsi Lampung, Indonesia. KoGa
terkenal akan keberhasilannya dalam pemanfaatan sumberdaya lokal sebagai input
yang murah dan berkelanjutan untuk usaha budidaya ikan patin. Studi ini
memperkirakan keunggulan kompetitif dan komparatif usaha budidaya ikan patin
dengan menggunakan metode Policy Analysis Matrix (PAM) untuk menentukan
Private Cost Ratio (PCR) dan Domestic Resource Cost Ratio (DRC). Analisis
sensitivitas dilakukan untuk mengukur responsivitas dari PCR dan DRC terhadap
perubahan parameter kunci dalam usaha budidaya ikan patin.
Hasil studi ini menunjukkan bahwa usaha budidaya ikan patin di KoGa
memiliki keunggulan kompetitif dan komparatif yang ditujukkan dengan nilai
PCR dan DRC yang kurang dari satu. Kebijakan perdagangan yang kuat pada
output telah memberikan kesempatan kepada petani pembudidaya ikan patin
untuk menjual outputnya dengan harga 12.34 persen lebih tinggi dari harga yang
berlaku di pasar dunia. Kebijakan perdagangan pada input belum benar-benar
memberikan perlindungan terhadap petani pembudidaya ikan patin namun tetap

memberikan keuntungan privat dan sosial yang positif. Selisih di faktor domestik
terbatas pada subsidi mesin pembuat pakan yang mana sangat membantu petani
ikan patin untuk membuat pakan ikan murah dengan menggunakan sumberdaya
lokal yang berkelanjutan. Keunggulan komparatif pada usaha budidaya ikan patin
di KoGa sensitif terhadap perubahan harga FOB fillet ikan patin dan harga pakan
alternatif. Sedangkan keunggulan kompetitif sensitif hanya terhadap perubahan
harga pakan alternatif.
Kata kunci: Ikan patin, keunggulan kompetitif, keunggulan komparatif, PAM

© All Rights Reserved by Bogor Agricultural University, 2015
Copyright Reserved
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without the permission of the Bogor Agricultural University.

ANALYSIS OF THE COMPETITIVENESS OF PANGASIUS
FISH FARMING IN KOTA GAJAH SUB-DISTRICT,

LAMPUNG TENGAH DISTRICT, LAMPUNG PROVINCE

ANGGA YUDHISTIRA

Thesis
as one of requirements to obtain a degree of
Magister Sains in
the Study Program of Agribusiness

GRADUATE SCHOOL
BOGOR AGRICULTURAL UNIVERSITY
BOGOR
2015

Examiner Commission on Affairs of Master Thesis Examination:
Dr Ir Ratna Winandi MS

ACKNOWLEDGMENT
All praise to Allah, the Almighty God, for His blessing. For helping and
supporting me in finishing this research, I would like to thank many people. I

would like to express my special thanks of gratitude to my first supervisors, Dr Ir
Harianto MS. Without his guidance and full support, this thesis would not have
been possible. I also would like to thank my second supervisor,
Dr Ir Nunung Kusnadi MS for helping me with the substance in my research. My
grateful thanks are also extended to Prof Dr Bernhard Brümmer and Dr Stephan
Wessels as my supervisors in Göttingen University, Germany.
I would like to offer my special thanks to Prof Dr Rita Nurmalina MS as
the coordinator of Magister Sains Agribisnis program and Prof Dr Stephan von
Cramon-Taubadel as the program coordinator for the specialization in
“International Agribusiness and Rural Development Economics” in respect of
Sustainable International Agriculture, the joint degree program between the
Magister Sains Agribisnis, Bogor Agricultural University and Master of
International Agribusiness and Rural Development, Georg August Universität
Göttingen.
I also wish to thank H. Wahidin, as Chairman of GAPOKDAKAN Karya
Mina Manunggal, Kota Gajah Sub-District; Toha Mohtar, S.St.Pi., as the fisheries
instructor at Balai Penyuluhan Pertanian, Perikanan, dan Kehutanan (BP3K), Kota
Gajah Sub-District; and Dedi Anwar Sipayung, S.Pi., as Pelaksana Tugas Kepala
Seksi Pembenihan Ikan, Dinas Peternakan dan Perikanan, Pringsewu District, for
providing me the pangasius data.

I would like to express my special appreciation to Beasiswa Kalimantan
Timur Cemerlang - Pemerintah Daerah Kalimantan Timur and Beasiswa
Unggulan - Biro Perencanaan dan Kerjasama Luar Negeri Kementerian
Pendidikan Nasional for funding my study.
Moreover, special thanks to my friends in SIA program, BDP 42, MSA
IPB and PPI Göttingen for supporting me in my study. Finally, I would like to
thank my family, my parents for their support and encouragement throughout my
study.
Bogor, May 2015
Angga Yudhistira

CONTENTS
CONTENT S

viii

LIST OF TABLES

ix

LIST OF FIGURES

ix

LIST OF APPENDICES

ix

LIST OF ABBREVIATIONS

x

1 INTRODUCTION
Background
Problem Statement
Research Objectives
Benefits of the Study
Scope and Limitation of the study

1

1
5
6
6
6

2 LITERATURE REVIEW
Production Technology of Pangasius Fish
World Market of Pangasius Fish
Indonesia's Market of Pangasius Fish
Government policies related to pangasius fish farming in KoGa

7
7
9
11
11

3 FRAMEWORK
Comparative and Competitive Advantages

Agricultural Policy Analysis
Classification of Price Policies
Output Policy
Trade Policy
Tradable Input Policy
Non-tradable Input Policy
Policy Analysis Matrix
Previous Research
Operational Framework

12
12
13
13
14
15
16
17
18
18

19

4 RESEARCH METHODOLOGY
Location and time
Types and Sources of Data
Empirical Analysis
Identities of PAM Analysis
Input and Output Social Prices Determination
Sensitivity Analysis

21
21
21
21
22
25
29

5 RESULTS
Private and Social Profitability
Competitive and comparative advantages
Input-Output Transfers
Sensitivity Analysis
Discussion

29
29
31
33
35
36

6 CONCLUSIONS AND RECOMMENDATIONS
Conclusions
Recommendations

41
41
42

ix

REFERENCES

43

APPENDICES

48

BIOGRAPHY

57

LIST OF TABLES
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

Aquaculture production by major commodity, 2008-2012
Volume and value of fishmeal export-import
Volume and target production of pangasius fish in Indonesia
Volume of pangasius fish culture production by province in Sumatera
World pangasius fish producers
Minapolitan and Fisheries Industrialization programs related to
pangasius fish farming in KoGa
Classification of commodity price policy
Policy Analysis Matrix
Pangasius fish farm business analysis (per 0.25 ha per cycle)
Policy Analysis Matrix analysis (IDR)
Identities of Policy Analysis Matrix
PAM sensitivity analysis results for pangasius fish fillet FOB price
PAM sensitivity analysis results for alternative fish feed prices

2
3
4
5
9
12
13
18
30
31
31
35
36

LIST OF FIGURES
1.
2.
3.
4.
5.
6.
7.

Fisheries production by volume in Indonesia
Pangasius fish
Positive subsidy policy on output
Trade policy on output
Tradable input policy
Non-tradable input policy
Operational framework

1
7
15
16
17
17
20

LIST OF APPENDICES
1.
2.
3.
4.
5.
6.

Social valuation of pangasius fish
Calculation of alternative fish feed production per 0.25 ha per cycle
Social valuation of urea
Social valuation of salt
Shadow exchange rate 2012
Sensitivity analysis

48
48
49
49
49
50

x

LIST OF ABBREVIATIONS
BAP
BP3K
BPS
CBIB
CIF
DJP2HP
DJPB
FAO
FAS-USDA
FOB
GAPOKDAKAN
IDR
KJA HDPE
KKP
KoGa
MT
PAM
POKDAKAN
PUMP
SNI

: Best Aquaculture Practices (issued by FAO)
: Balai Penyuluhan Pertanian, Perikanan, dan Kehutanan
/ Agricultural, Fishery and Forestry Extension Centers
: Badan Pusat Statistik / Statistics Indonesia
: Cara Budidaya Ikan yang Baik / Best Aquaculture
Practices (issued by Ministry of Marine Affairs and
Fisheries)
: Cost, Insurance and Freight
: Direktorat Jendral Pengolahan dan Pemasaran Hasil
Perikanan / Directorate General of Fisheries Product
Marketing and Processing
: Direktorat Jenderal Perikanan Budidaya / Directorate
General of Aquaculture
: Food and Agriculture Organization
: Foreign Agricultural Service - United States Department
of Agriculture
: Free on board
: Gabungan Kelompok Pembudidaya Ikan / Joint-Group of
Fish Farmers
: Indonesian Rupiah
: Keramba Jaring Apung HDPE / High-Density Poly
Ethylene floating net cage
: Kementerian Kelautan dan Perikanan / Ministry of
Marine Affairs and Fisheries
: Kota Gajah Sub-District
: Metric Ton
: Policy Analysis Matrix
: Kelompok Pembudidaya Ikan / Group of Fish Farmers
: Pengembangan Usaha Mina Pedesaan / Fisheries rural
business development
: Standar Nasional Indonesia / National Standardization
Agency of Indonesia

UPI

:

UN COMTRADE

: The United Nations Commodity Trade Statistics
Database
: United States Dollar (US$)

USD

Unit Pengolahan Ikan / fish processing unit

1 INTRODUCTION
Background
Demand for fisheries commodities as a source of animal protein is
expected to rise due to the increase of population and people's awareness of high
quality nutritional needs. In 2004, fish consumption per capita in Indonesia
reached 22.58 kg per capita per year. In 2012, it increased to 33.89 kg per capita
per year. The average growth of fish consumption is 5.21 percent per year (KKP,
2013b). The increasing demand of fisheries product should be followed by the
increasing of supply.

Figure 1. Fisheries production by volume in Indonesia
Source: KKP (2012)

Figure 1 shows fisheries production by volume in Indonesia is increasing
every year. From 2008 to 2012, capture fisheries increased not significantly from
5 million MT to 5.8 million MT. In 2008, aquaculture production was only
3.8 million MT or 56.48 percent of the total volume of fisheries production. In
2012, aquaculture production increased extensively to 9.6 million MT or reached
62.40 percent of the total volume of fisheries production (KKP, 2012). This
implies that Indonesia cannot depend only from capture fisheries to fulfill its
increasing demand of fisheries product. Aquaculture is the solution of this
problem. Table 1 shows the aquaculture production by major commodity
in 2008-2012.

2

Table 1. Aquaculture production by major commodity, 2008-2012
Species
Seaweed
Shrimp
Grouper
Giant sea perch
Milkfish
Carp
Tilapia
Walking catfish
Pangasius
Giant gouramy
Other
TOTAL

2008
2 145 060
409 590
5 005
4 371
277 471
242 322
291 037
114 371
102 021
36 636
227 317
3 855 200

2009
2 963 556
338 060
5 073
6 400
328 288
249 279
323 389
144 755
109 685
46 254
193 826
4 708 565

Year (MT)
2010
3 915 017
380 972
10 398
5 738
421 757
282 695
464 191
242 811
147 888
56 889
349 568
6 277 923

2011
5 170 201
400 385
10 580
5 236
467 449
332 206
567 078
337 577
229 267
64 252
344 731
7 928 962

2012
6 514 854
415 703
11 950
6 198
518 939
374 366
695 063
441 217
347 000
84 681
265 580
9 675 553

Source: KKP (2013a)

Pangasius fish is one of fisheries leading commodities that have the
highest production growth in Indonesia. The average production growth of
pangasius fish reached 53.19 percent per year from 2010-2012 which followed by
walking catfish and seaweed at 34.86 and 29.03 percent per year respectively. The
high production growth allows Indonesia to produce pangasius fish from
147 888 MT per year in 2010 to 347 000 MT per year in 2012. The increase of
pangasius fish production cannot be achieved without supports from the
government through Minapolitan and Fisheries Industrialization programs. It is
one of the ten leading aquaculture commodity in Minapolitan program and one of
the seven main commodities in the Fisheries Industrialization program.
Based on the Regulation of the Minister of Marine Affairs and Fisheries
PERMEN-KP No.12/MEN/2010 about "Minapolitan", the definition of
Minapolitan program is a region-based economic development concept. It is built
upon the principles of integration, efficiency, quality and acceleration of the
fisheries production. Minapolitan area is a part of region that has primary function
as the center of economic growth, which consists of production center, processing
center, marketing, services and/or other supporting activities. Fisheries
Industrialization program is an advanced program of Minapolitan. Regulation of
the Minister of Marine Affairs and Fisheries PERMEN-KP No.27/MEN/2012
about "General Guidelines of Fisheries Industrialization Program" stated that the
definition of Fisheries Industrialization program is an integrated production
systems of fisheries commodities from the upstream to the downstream in order to
improve the scale and quality of production, productivity, competitiveness and
value-added of marine and fisheries resources in a sustainable manner.
The main purpose of Minapolitan Program is to enhance the production,
productivity and quality of marine and fisheries product; to increase a fair and
evenly income to the fisherman, aquaculture business and fish processing
business; and to develop the Minapolitan area as the center of local economic
development. Hopefully the production and quality of the fisheries commodities
can be better off with Minapolitan program so that strengthen the economic
capacity of all its stakeholders which will create fisheries sector as the backbone
of regional and national economic development.

3

Ministry of Marine Affairs and Fisheries makes a collaboration work with
various organizations, institutes and ministries in order to achieve those targets.
Minapolitan and Fisheries Industrialization programs policies are applied
nationally and locally. It covers fisheries in general and to some specific leading
commodities. Some of Minapolitan and Fisheries Industrialization programs in
general at national level in aquaculture sector are synergy and collaboration across
sectors between Ministry of Marine Affairs and Fisheries with Ministry of Public
Work, Directorate General of Electricity Ministry of Energy and Mineral
Resources, National Land Agency and the banking sector. Ministry of Marine
Affairs and Fisheries also delegating the authority of certification to 15 provinces
in order to accelerate Best Aquaculture Practice (BAP or CBIB - Cara Budidaya
Ikan yang Baik) certification through the Regulation of the Directorate General of
Aquaculture, Ministry of Marine Affairs and Fisheries, No.30/PER-DJPB/2013
(DJPB, 2013b).
In 2013, Ministry of Marine Affairs and Fisheries issued a variety of
programs that supporting the production of pangasius fish. For example:
monitoring the availability of pangasius fish fry, providing high quality pangasius
fish brood stock, applying the BAP/CBIB in pangasius fish production,
developing certified and registered fish feed, forming the group of fish farmers,
developing pilot project of fish ponds, procuring of KJA HDPE (high-density poly
ethylene floating net cage), providing excavator, providing feed pellet machine,
granting PUMP (fisheries rural business development), providing fish vaccine and
developing integrated fish health service post, fish vaccine training, developing
UPI (fish processing unit) and fishmeal processing unit for pangasius fish and
maintaining cooperation and support from various parties such as associations and
fish feed producers (DJPB, 2013b). Despite of the rise of aquaculture production
the import of its input is also increased, in this case fishmeal as fish feed main
ingredients.
The import of fishmeal as the main ingredients of fish feed is increase.
Increasing import of fishmeal is a result of the increasing of aquaculture
production that requires high amount of fish feed. The HS-230120 are flours,
meals and pellets, of meat or meat offal, of fish or of crustaceans, mollusks or
other aquatic invertebrates, unfit for human consumption; greaves. Table 2 shows
us the volume and value of fishmeal export and import from 2009 to 2013.
Table 2. Volume and value of fishmeal export-import
Fishmeal (HS-230120)
Export
Volume (MT)
Value (USD 1 000)
Import*
Volume (MT)
Value (USD 1 000)

2009

2010

Year
2011

2012

2013

2 818
1 977

10 555
8 463

4 178
3 278

6 829
4 446

6 257
4 313

67 208
60 129

61 036
72 586

100 720
112 105

94 894
104 101

99 724
119 896

Source: UN COMTRADE (2015); *) re-imports are excluded

Table 2 shows us the high amount of fishmeal import in Indonesia
compared to its export. The main importers of fishmeal are the Republic of Korea
and Peru. Indonesia also re-imported the fishmeal as much as 200, 125, and
300 MT in 2010, 2011 and 2013 respectively. In early 2010, the imported

4

fishmeal was charged by value added tax of 10 percent. However, since the late of
2010, the value added tax for imported fishmeal had been deleted. The deletion of
this policy has risen up the import of fishmeal in the next year up to 65 percent
from 61 036 MT in 2010 to 100 720 MT in 2011.
According to the Joint of Animal Feed Company (Gabungan Perusahaan
Makanan Ternak, GPMT), which is now known as the Association of Animal
Feed Manufacturer Indonesia (Asosiasi Produsen Pakan Indonesia, APPI) in
GPMT (2013), 75 percent of the national requirement of fishmeal met from
imports. GPMT data mention, fishmeal demand in Indonesia is 100 000-120 000
MT per year, where a total of 75 000-80 000 MT of which met from imports. The
use of local fishmeal is maximum of 50 000 MT per year due to the failure to
meet the required quality specifications of feed manufacturers. Although the price
of local fishmeal with imported fishmeal are not much different.
Although the pangasius fish production volume is increasing but it cannot
meet its annual target production. This shows that the increasing of pangasius fish
production volume has not been able to suffice its domestic demand. Table 3
show the volume and target production of pangasius fish in Indonesia.
Table 3. Volume and target production of pangasius fish in Indonesia
Pangasius fish
Production
Target Production

2008
102 021
n/a

2009
109 685
132 600

Year (MT)
2010
2011
147 888 229 267
225 000 383 000

2012
347 000
651 000

2013
n/a
1 107 000

Source: KKP (2012); DJPB (2013b)

Table 3 shows the gap between the production and the target production of
pangasius fish. Pangasius fish production only met 82.72, 65.73, 59.86 and
53.30 percent of its target production from 2009 to 2012 respectively. The gap
between pangasius fish demand and production are fulfilled by import, mainly
from Vietnam. Indonesia imported 2 453.41 MT of pangasius fish fillet in 2010
(DJP2HP, 2012) and 600 MT per month in 2011 (DJP2HP, 2011). In 2011,
pangasius fish from Indonesia was sold at the price of 17 000.00 IDR per kg while
imported pangasius fish from Vietnam was only 9 000.00 IDR per kg (DJPB,
2011). Price differences make local pangasius fish farmer cannot compete with
imported pangasius fish.To save local pangasius fish farmer, the Indonesian
government stopped importing pangasius fish fillet through Regulation of the
Minister of Marine Affairs and Fisheries PERMEN-KP No.15/MEN/2011 about
"Quality Control and Safety of Fisheries Product Entry into the Republic of
Indonesia". By this policy, local pangasius fish are prioritized and hopefully it can
increase local pangasius fish farmer competitiveness.
Indonesia is the second largest producers of pangasius fish after Vietnam.
Pangasius fish is widely farmed across Indonesia in which Sumatra is the largest
pangasius fish producer counted 77.42 percent of total volume of national
production. Lampung province is the third highest pangasius fish producer in
2011 after Sumatra Selatan and Riau. Lampung has prospective natural resources
that support pangasius fish farming and it is still possible to increase their
pangasius fish production. Table 4 shows the pangasius fish culture production
volume by province in Sumatera.

5

Table 4. Volume of pangasius fish culture production by province in Sumatera
Production
Sumatera
Aceh
Sumatera Utara
Sumatera Barat
Riau
Jambi
Sumatera Selatan
Bengkulu
Lampung
Kep. Bangka Belitung
Kep. Riau

2007
15 990
73
0
4
3 394
8 086
1 631
238
2 538
27
0

2008
66 108
87
0
5
14 206
10 077
38 543
195
2 943
51
1

Year (MT)
2009
79 266
0
94
870
16 618
10 907
47 265
105
3 363
44
0

2010
97 438
0
72
4 082
20 155
12 429
55 582
230
4 782
106
0

2011
177 491
135
173
4 287
26 853
13 939
117 040
587
14 368
93
15

Source: KKP (2012)

Kota Gajah Sub-District (KoGa), Lampung Tengah District, Lampung
Province set as Minapolitan Aquaculture Area based on the Decision of the
Minister of Marine Affairs and Fisheries of the Republic of Indonesia
No.35/KEPMEN-KP/2013 concerning "Establishment of the Minapolitan Area".
KoGa famous for its success as an efficient and low costs pangasius fish producer
by using local resources as their alternative fish feed to reduce the use of high
priced commercial fish feed (DJPB, 2013a). KoGa is able to use the side catch
product of capture fisheries in its surrounding area as sustainable and cheap
fishmeal ingredients to be used as the alternative fish feed. KoGa is also using rice
bran as its sustainable and cheap fishmeal ingredients.
The success in Pangasius fish farming in KoGa cannot be separated from
the help and support from the government. Some Minapolitan and Fisheries
Industrialization programs are conducted in KoGa which include expansion and
development of fish farming area, formation of The Group of Fish Farmers
(Kelompok Pembudidaya Ikan, POKDAKAN) and The Joint-Group of Fish
Farmers (Gabungan Kelompok Pembudidaya Ikan, GAPOKDAKAN), provision
of capital such as irrigation canals, subsidy in capital such as feed pellet machines
subsidy, Best Aquaculture Practices training and counseling and other programs
that support the aquaculture business, especially Pangasius fish farming business
(BP3K, 2012). Although pangasius farming is encouraged by the government,
some policies are distorting and reduce the competitiveness and comparativeness
of pangasius fish farming such as value added tax and import tariff on the inputs.
Problem Statement
Pangasius production in Indonesia, particularly in KoGa, is affected by
Minapolitan and Fisheries Industrialization programs in form of trade policy and
subsidy either positive or negative. Efficient pangasius farming is needed in order
to compete with imported pangasius fish and to achieve Minapolitan and Fisheries
Industrialization programs target as one of main exported fisheries commodity in
Indonesia. Based on the description of the condition and policies related to
pangasius fish farming, several issues need to be further investigated:

6

1.
2.

Is Pangasius fish farming in KoGa has comparative and competitive
advantages?
Is Minapolitan and Fisheries Industrialization programs on the input and
output of pangasius fish farming in KoGa have positive effect to its
competitive advantage?
Research Objectives

1.
2.
3.
4.

The Objectives of the study are:
To analyze the level of comparative and competitive advantages of
pangasius fish farming business.
To analyze the impact of Minapolitan and Fisheries Industrialization
programs to the comparative and competitive advantages of pangasius fish
farming business.
To define key factors affecting the level of comparative and competitive
advantages of pangasius fish farming business.
To identify the effect of changes in key factor affecting the level of
comparative and competitive advantages of pangasius fish farming
business.
Benefits of the Study

1.
2.
3.

The benefits of this study are:
As a reference and consideration in setting policy related to pangasius fish
farming business for central and local government, particularly in terms of
increasing its comparative and competitive advantages.
As information in order to improve production efficiency and
competitiveness of pangasius fish farming business.
As a reference and information for further study in more depth approach or
different production technology for academics and researchers.
Scope and Limitation of the study

This research was conducted in Kota Gajah Sub-District, as one of the
areas designated as Minapolitan Aquaculture Area for pangasius fish farming
business. The scope of the discussion in this study includes a comparative and
competitive analysis of pangasius fish farming business using the Policy Analysis
Matrix (PAM) method. This analysis will also provide information of economic
efficiency and the impact of Minapolitan and Fisheries Industrialization programs
on pangasius fish farming business in KoGa.
The limitations of this study are: (1) The source of data is limited to the
data from the book of Programa Penyuluhan Perikanan Kecamatan Kota Gajah
Lampung Tengah 2012, the Agricultural, Fishery and Forestry Extension Centers
(BP3K) Kota Gajah Sub-District; (2) The analysis of pangasius fish farming
business in this study is limited to pangasius fish grow-out business in earthen
pond at applied technology; and (3) Input prices and output prices used in
pangasius fish farming are the prices prevailing in 2012 and use only cross section
data at farm gate level.

7

2 LITERATURE REVIEW
Production Technology of Pangasius Fish
Pangasius fish is a variety of catfish in the family Pangasiidae. Pangasius
hypophthalmus or originally known as Pangasius sutchii is one of the most
important fish species in the Mekong River fishery. Pangasius hypophthalmus is
omnivorous. It feeds on algae, higher plants, zooplankton, insects, fruit,
crustaceans and fish. Mature fish can reach a maximum standard total length of
130 cm and up to 44 kg in weight. Females take at least three years to reach
sexual maturity (over 3 kg in weight) and males mature in two years. A mature
10 kg female can spawn over one million eggs. Aquaculture introductions have
taken place to several Asian countries such as Vietnam, Thailand, Bangladesh,
China, India, Indonesia, Malaysia and Myanmar (FAO, 2010). Pangasius fish
taxonomy as referred to ITIS (2015) is as follow:
Kingdom
Phylum
Class
Order
Family
Genus
Species

Animalia
Chordata
Actinopretygii
Siluriformes
Pangasiidae (Bleeker, 1858)
Pangasius (Valenciennes, 1840)
Pangasius sp.

Figure 2. Pangasius fish
Source: FAO (2010)

Pangasius fish farming includes hatchery, nursery and grow-out activities.
Hatchery is an attempt to produce fish larvae at a certain size to be used as an
input in pangasius fish nursery. Nursery is an attempt to produce fish fry at a
certain size to be used as an input in pangasius fish grow-out. Pangasius fish
grow-out is an activity of producing fish in its commercial consumption size.
Pangasius fish grow-out in Indonesia is generally conducted in earthen fish ponds,
floating nets, pens or cages (Susanto, 2009).
According to Khairuman and Sudenda (2009), intensive pangasius fish
hatchery system can be divided into four main stages. First stage is the preparation
of the brood stock. Brood stock could be obtained from natural catch or from
Balai Budidaya Perikanan (Fish Breeding Research Institute). Brood stock was
given feed in the form of paste or pellet at 5 percent of its body weight per day. To
enhance the maturity and the quality of the gonads, the brood stock can be feed
with snail and or trash fish at 10 percent of its body weight twice a week. The
second stage is the selection of brood stock with ripened gonads. It is ripened
when its age is more than three years old for female and two years old for male,
its body weight is at least 1.5 kg per male and 3 kg per female, the female brood
stock belly enlarges and soft when it is touched and the male brood stock will

8

produce sperm if its stomach is stripped (Khairuman and Sudenda, 2009; FAO,
2010). The third stage is spawning. Spawning is done by induced breeding
because pangasius fish cannot spawn naturally outside their natural habitat. The
success rate of this technique depends on the level of gonad maturity, water
quality, feed quality in brood stock feeding and brood stock handling when the
induced breeding applied. Induced breeding is completed by using artificial
hormones or other fish pituitary gland to stimulate brood stock spawning. The
fourth stages are stripping and fertilization. Stripping is performed to get the eggs
and sperm from the brood stock. The fertilized eggs are placed in an egg incubator
to keep the eggs in suspension. The eggs hatch into larvae after 28 hours. Then the
larvae is transferred to larval tanks or sold to the pangasius fish nursery business
(Khairuman and Sudenda, 2009; FAO, 2010).
Pangasius fish nursery aims to produce pangasius fish fry at the size of
1-2 inch that is ready to be used as input in pangasius fish grow-out system
(Rolin, 2013). An indoor fish tank is used for pangasius fish nursery. Since
pangasius fish larvae are sensitive to the temperature changes, the use of indoor
fish tank will ease the water temperature control. The indoor fish tank should be
kept at the range of 27-30o C. Tanks that are used for pangasius fish nursery are
concrete tank, bamboo tank, fiber tank, or aquariums. According to the SNI
(2000), the best stocking density for larvae is 40 fish larvae per liter. For the
intensive larvae nursery with a water recirculation system, the larvae stocking
density could reach up to 90 fish larvae per liter (Irliyandi, 2008). The nursery
period takes between 21-28 days. Water exchange is performed to maintain the
water quality. Feed used for pangasius fish nursery are brine shrimp, tubifex
worm and fish fry pellet. The larvae can be harvested when they reach the size of
1 inch (Rolin, 2013).
There are several things that need to be concerned in pond system
(Susanto, 2009), which are: pond construction, pond preparation, pond liming and
fertilizing, water supply, fish stocking, feeding and harvesting. There are no
special criteria for pangasius fish grow-out ponds but it must have a slow water
debit. The pond used is usually an earthen pond where the type of soil is loamy or
clayey to prevent water loss. Slope of the pond is 3-5 percent toward the outlet.
Sump is made in the base of the pond with 50-100 cm width and 30-50 cm dept
from inlet toward the outlet. Sump will help in pond drainage and fish harvesting
(Mahyuddin, 2010). The pond size is usually 200-1 500 m2. The bigger the pond
is, the harder in water quality, disease and pests management become. Pond dike
is adjusted with the size of the pond used (Khairuman, 2007).
Pond preparation is started with pond drying. Pond is dried for 3-7 days till
the base of the pond cracked. This is conducted to cut the life cycle of parasites
and other harmful organism. Pond liming is conducted to improve the soil pH in
the pond. The best pH for Pangasius fish farming are ranging from
6.7-8.6 (Susanto, 2009). The dosage used for liming is ranging from 20-100 g per
m2. Fertilizing is performed to stimulate the growth of natural feed in the pond
such as Rotifers, Moina, Daphnia and other beneficial organism. Fertilizer used is
usually animal manure or chemical fertilizer. After fertilizing the pond, it filled
with water at 20 cm height (Susanto, 2009) and left for 3-4 days to let beneficial
organism to grow (Khairuman and Sudenda, 2009). Water depth in pond reaches
1.5 m at best and should be added gradually to prevent dike damage. The best

9

water turbidity is ranging between 25-30 cm (Khairuman and Sudenda, 2009).
Water resources for pangasius fish pond is surface water, irrigation system,
rainfall, or ground water. The stocking density for pangasius fish grow-out is
ranging from 1 fry per m2 at size of 100 g per fry (Susanto, 2009) to 40 fish fry
per m2 at size of 1 inch per fry (Khairuman and Sudenda, 2009). Stocking of fish
is conducted with acclimatization and at the lowest water temperature (25 o C) in
the morning or in the afternoon. Since the pangasius fish is an omnivorous fish,
they could be fed using almost everything from commercial fish feed, alternative
fish feed, to the left over from kitchen waste and etc. Fish fed at the amount of
3-4 percent of its body weight per day. The best fish feed used for pangasius fish
grow-out contains protein no less than 20 percent (Susanto, 2009).
The Feed Conversion Ratio (FCR) is a measure of feed efficiency in
livestock production, including in aquaculture production (New and Wijkström,
2002). Pangasius fish FCR in grow-out stage could reach 1.44 to 2.36 depend on
the quality of the feed given (Susanto, 2009). Pangasius fish grow-out system
takes 6 months till it is ready to be harvested at the size of 2-3 fish per kg.
Harvesting is performed by draining out the pond slowly to prevent stress to the
fish. The survival rate of pangasius fish grow-out system at 89-96 percent
(Susanto, 2009).
World Market of Pangasius Fish
Pangasius fish has varied trade names in the international world. In North
America and Australia, pangasius fish is known as basa fish, swai, or bocourti. In
the UK it is known as river cobbler, basa, pangasius, panga, or catfish. In Europe
commonly marketed as pangasius or panga. Pangasius fish in the UN
COMTRADE and FAS-USDA is known as basa and panga (before 2012 the code
name was HS-0304296033 and after 2012 the code name was HS-0304620020).
Vietnam and Indonesia are the major producers of pangasius fish. Table 5 shows
the world pangasius fish producers.
Table 5. World pangasius fish producers
Producer
Vietnam
Indonesia
Cambodia
Malaysia
Myanmar
Haiti

2007
850 000
36 755
9 000
5 784
11 100
-

2008
1 250 000
102 021
14 450
7 844
14 231
-

Year (MT)
2009
2010
1 050 000 1 140 000
109 685
127 668
18 000
22 000
18 810
37 884
15 338
17 169
-

2011
1 151 000
229 267
26 400
10 892
15 922
45

2012
1 240 000
347 000
26 800
18 389
17 308
50

Source: FAO (2014)

Vietnam is the main producers of pangasius fish in the world. In 2011
Vietnam produced 1 151 000 MT (FAO, 2014) of pangasius fish at 6 000 ha of
pangasius farming area (Dzung, 2012). In the same year, Vietnam exported
pangasius fish fillet to more than 660 000 MT that valued at 1 856 million USD
mainly to Europe, USA, ASEAN countries, China, Hong Kong and others
(Dzung, 2012). Indonesia is the second largest producers with annual production
in 2011 of 229 267 MT (KKP, 2012).

10

Pangasius fish grow-out in Vietnam has stocking density at 30-40 fry per
m that yielding 250-300 MT per ha in earthen pond system (Dzung, 2008) with
the cost of production in average at 6 000.00 IDR per kg (Trobos Aqua, 2012).
Vietnam is able to integrate their pangasius agribusiness system by establishing
the Mekong Delta River as the center of integrated pangasius fish farming
(Dzung, 2008). The harvest size of pangasius fish from Vietnam is large, usually
more than 700 g per fish, making it suitable to be used as fish fillet. The color of
the meat is white and it is also odorless, making it the best quality of pangasius
fish fillet as required by the international market.
There are some issues related to pangasius in Vietnam. Vietnam started
exporting pangasius fish to the US in 1996. The market share of pangasius fish
from Vietnam in the US in 2002 was 12 percent. Consumer in the US prefers
pangasius fish to local catfish because it has a good taste, good quality and sold at
a lower price. This pangasius was sold at the price of 50 percent lower than the
US local catfish. This competition leads to the decline in the local catfish prices
and the beginning of the "catfish" war.
In 2001, the Catfish Farmers of America (CFA) lobbied ban on imported
catfish from Vietnam due to health issue on its production system. After
investigation in the Mekong River delta, the US rejected this claim. In the same
year by a group of lawmakers in the United States, pangasius fish from Vietnam
cannot be labeled as "catfish" in the US market. This forces Vietnam pangasius
producers to change their product name to "basa fish" and "tra fish". These
changes did not decrease the imported pangasius fish from Vietnam to US
because it has already popular among the US consumer.
In 2002 by the Catfish Farmers of America (CFA) and eight local catfish
producers through the United States International Trade Commission (USITC)
and the Viet Nam Association of Seafood Exporters and Producers (VASEP) sued
pangasius fish from Vietnam for selling their product bellow their costs of
production. After investigation, concluded that pangasius fish from Vietnam was
sold bellow their fair price in the US market. As a result of this case, the Import
Administration of Department of Commerce (DOC) imposed import tariff on
pangasius fish from Vietnam of 37 to 64 percent.
This "catfish war" between the US and Vietnam successfully decrease the
import quantity of pangasius fish from Vietnam to 50 percent and forced Vietnam
to search for new market. Besides the US, now Vietnam sold their pangasius fish
to Europe, Canada, Australia, ASEAN countries, China, Hong Kong, South
Korea, Japan and other countries bring considerable growth in the pangasius
industry in Vietnam (Tung, Thanh and Phillips, 2004 in UNIDO, IDE-JETRO,
2013; and Brambilla, Porto and Tarozzi, 2007 in UNIDO, IDE-JETRO, 2013).
Barriers on imported pangasius fish from Vietnam such as penal duty of antidumping imposed by the US International Trade Commission (ITC) and technical
barriers of antibiotics prohibitions imposed by the US Food and Drug
Administration (FDA) are opportunities for Indonesia to develop their pangasius
fish production.
2

11

Indonesia's Market of Pangasius Fish
There are several varieties of local pangasius fish in Indonesia namely
Pangasius polyuranodon (juaro fish), Pangasius macronema (rios, riu, riuscaring,
lancang, or wakal fish), Pangasius nasutus (pedado fish), Pangasius nieuwenhuisii
(mace fish) and Pangasius hypophthalmus or Pangasius sutchi (patin siam fish or
patin jambal fish) (Susanto, 2009). Patin Pasupati (Patin Super Harapan Pertiwi)
is a cross breeding species between female patin siam fish and male patin jambal
fish through selective breeding from Balai Penelitian Pemuliaan Ikan Sukamandi
(Sukamandi Fish Breeding Research Institute). Patin pasupati is the most cultured
species in pangasius fish farming in Indonesia (KKP, 2014).
Pangasius fish in traditional market sell in the form of live or fresh fishes.
While supermarket and hotel demand for pangasius fish fillet. Pangasius fish fillet
is mainly produced by private company at small scale industry and cannot fulfill
the demand for pangasius fish fillet because of input shortage. This business relies
on imported pangasius fish for their input because imported pangasius fish is
cheaper than that of local product. Pangasius fish fillet with local input can be sold
at the price of 41 000.00 IDR per kg. This product cannot compete with pangasius
fish fillet from Vietnam that is sold at the price of 25 000.00 IDR per kg (Kontan,
2012). Since the implementation of pangasius fish fillet import restriction, the
imported illegal pangasius fish fillet were still can be found in market (Widiasto,
2012).
Pangasius fish agribusiness system in Indonesia is not yet integrated. The
highest producers of pangasius fish are Sumatera and Kalimantan but the
pangasius fish processing factory and the highest market of pangasius fish located
in Java and Bali (Poernomo, 2012). The government has taken a serious act to this
problem by establishing pangasius fish minapolitan area as an integrated fish
farming area. Government also establishing a fish processing unit (Unit
Pengolahan Ikan; UPI) in 2013 for pangasius fish that produces pangasius fish
fillet and fishmeal at Muaro Jambi regency, Jambi province with daily capacity at
5 MT per day. Muaro Jambi regency was chosen because it is near the pangasius
production center such as Sumatera Selatan, Riau, Jambi and Lampung
(Republika, 2013).
KoGa allocates 74.85 ha of its land as an area for aquaculture business
which 62.26 ha or 83.17 percent of the total area are for pangasius fish farming.
KoGa absorbs 366 workers as fish farmers where 232 people choose to cultivate
Pangasius fish. Pangasius fish production in KoGa has increased in the last three
years. In 2010 the production of Pangasius fish was up to 1 772 MT per year,
which then increased to 1 984 MT per year in 2011 and reached 2 490.2 MT per
year in 2012 (BP3K, 2012).
Government policies related to pangasius fish farming in KoGa
There are several Minapolitan and Fisheries Industrialization programs
related to pangasius fish farming in form of tariff and subsidy policies both in the
input and in the output. The aim of tariff and subsidy policies is to scale up
production or to promote consumption. The Minapolitan and Fisheries
Industrialization programs related to pangasius fish production in KoGa are
presented in Table 6.

12

Table 6. Minapolitan and Fisheries Industrialization programs related to
pangasius fish farming in KoGa
No

Items

Policies

1.
2.
3.
4.

Imported pangasius fish fillet
(frozen pangasius fish fillet)
Rice bran
Vitamin and minerals
Urea

5.
6.
7.
8.

Fuel
Dolomite
Salt
Feed pellet machine

Import tariff of 10%;
Import restriction.
Import tariff of 5%.
Value added tax of 10%.
Import tariff of 10%;
Value added tax of 10%;
Subsidized for domestic use.
Subsidized for domestic use.
Value added tax of 10%.
Import tariff of 10%.
Subsidized.

Source: The Regulation of the Minister of Marine Affairs and Fisheries PERMEN-KP No.15/MEN/2011;
The Law No. 4 Year 2012; Beacukai (2012)

Import tariff and value added taxes are available in the Indonesian
Customs Tariff Book 2012 (Beacukai, 2012). Import restriction for imported
pangasius fish fillet was regulated through the Regulation of the Minister of
Marine Affairs and Fisheries PERMEN-KP No.15/MEN/2011. Meanwhile, the
subsidy of urea and fuel was regulated through the Law No. 4 Year 2012.
The Minapolitan and Fisheries Industrialization programs not only cover
in form of tariff and subsidy policies in the input and in the output of pangasius
fish farming but also non-tariff policies. The non-tariff policies usually applied
generally to all agribusiness sector including agriculture, aquaculture and or
animal husbandry. The non-tariff policies for pangasius fish farming applied in
KoGa are expansion and development of fish farming area, formation of The
Group of Fish Farmers (Kelompok Pembudidaya Ikan, POKDAKAN) and The
Joint-Group of Fish Farmers (Gabungan Kelompok Pembudidaya Ikan,
GAPOKDAKAN), provision of capital such as irrigation canals, subsidy in capital
such as feed pellet machines subsidy, Best Aquaculture Practices training and
counseling and other programs that support the aquaculture business, especially
Pangasius fish farming business (BP3K, 2012).

3 FRAMEWORK
Comparative and Competitive Advantages
Due to the divergences in technology, resources, etc a country cannot
produce everything by themselves. Therefore, to fulfill their needs, countries do
international trade. When producers have the best technology and resources for
producing goods, for example pangasius fish, than they have an absolute
advantage. But having absolute advantage did not mean that the consumers have
to buy pangasius fish only from them. In fact, consumers also buy pangasius fish
from other producer which is not having the best technology and the best
resources. This means that absolute advantage is not a good explanation for trade
patterns. Trade patterns can be seen from the comparative advantage (Feenstra
and Taylor, 2008).

13

Comparative advantage is an ability of producers to produce goods or
services at a lower costs compared to other. In economic term, comparative
advantage means that if they can produce at lower opportunity cost which means
that the producers has to use less labor, capital and other resources to produce
goods and services (Thompson, 2006 in Cai, Leung and Hishamunda, 2009).
Comparative and competitive advantages are quite similar in concept. Sometimes
they used indistinguishably and interchangeably. But they can be used to represent
different concepts. Competitive advantage measures producer profitability in an
activity under actual market prices that could be distorted by policy, market
failure, etc. Comparative advantage measures producer profitability in an activity
under shadow prices that represent the social value of costs in a market without
any distortion (Cai, Leung and Hishamunda, 2009).
Agricultural Policy Analysis
Agricultural policy can be described as the set of government actions that
cause domestic prices of agricultural products not equal its world market prices.
Agricultural policy can be imposed to output prices that directly affect the
producer's profit. Agricultural policy can also imposed to input prices that lower
producer's cost so that they can gain higher profit. Government can use sets of
actions to influence the product prices. That sets of actions performed to promote
economic efficiency, to share out incomes, to stabilize food price and food
security, to distribute sufficient nutritional food and to contribute to monetary
balance in the public sector (Monke and Pearson, 1989).
Classification of Price Policies
The classifications of commodity price policies are presented in Table 7.
Table 7. Classification of commodity price policy
Instrument

Policies affecting producers

Policies affecting consumers

Subsidy policies:
1. That do not change
domestic market prices
2. That do change
domestic market prices
Trade policies
(all of which change
domestic market prices)

Producer subsidies
On importable goods

Consumer subsidies
On exportable goods;
domestic market
On importable goods;
domestic market
Restrictions on exports;
change domestic market

On exportable goods
Restrictions on imports

Source: Monke and Pearson (1989)

Commodity price policy is classified by three principles: (1) type of
instrument (subsidy or trade policies); (2) policy recipient (producers or
consumers); and (3) type of goods (importable or exportable goods) Monke and
Pearson (1989).
According to Gittinger (1984), subsidy is a payment of resources that the
economy spent to operate the project. Subsidy can be positive or negative (tax).
Taxes are usually treated as a cost and subsidies as a return. Tax is payment of
resources to the government; subsidy is payment of resources from the
government. The purpose of subsidy is to protect the consumer or producer due to
the divergences of the price of goods in the domestic and world market. Monke

14

and Pearson (1989) define trade policy as commodity imports or exports
restriction. Restrictions can be in the form of price (trade tax) or quantity (trade
quota). The purpose of trade policy is to reduce traded quantity of tradable goods
and to regulate the gap between domestic and international market prices.
The commodity price policy can be affected the producers (in form of
producer surplus) or consumers (in form of consumer surplus). Subsidy and or
trade policy causes transfers am