13/1/11 A SNAP SHOT ON PROSPECT OF SAGO..

(Dalat Sago Plantation, same site in 2006 and 2007. Now this area has start harvesting)

The journey was an educative, as said by the out going Secretary General of the Ministry of Commodity and Plantation Industry. In fact I have lured him and his officials to visit the Sago Plantation and Smallholders Development since the last three years. At our first field encounter, from his body language and lukeworm respond of our proposal to develop the Smallholders along the Satelite Estate basis, doesn’t really sembling an encouraging sign. Today, 28 Jan., 2011, he was really convinced of our long struggle to make sago as an industry and the smallholders would play the significant role. The Malay proverb: Kalau tak dipecahkan ruyung, manakan dapat sagunya, which literally translated as: if one never break the bark, one will never get the sago milk, hold the truth.

(2) Developing sago on plantation especially in deep peat area attract no body to believe. Worst, though such effort that had been undertaken since 1987, but had really not shown any sign of success. Such a handicap is not a supprise since no one have ever done sago on plantatiopn basis. Ecologically, if one care to observe, sago is not a natural crop of Sarawak. Sago probably was introduced to Sarawak by those sailors whom have explored the Malucas and Papuan Island in the 13th or 14th century.

(3) I would to this day believe, the sago varieties currently planted in Sarawak, Sabah, Peninsula Malaysia, and even Sumatera are of the same species. Introduction of sago in Sarawak, mostly in the coastal of Mukah and Saribas probably was part of the succession process of the early settlements as the main food source before the arrival of rice, which were introduced to these Islands in the 15th century.

(4) The recent visit by the Sect Gen really had opened the eyes and mind of the Ministry on the great prospect of sago and how sago could be the best complementary crop to oil palm and rubber. My argument to them was rather simple, ie based on local varieties and potential industrial standard, a hectare of well managedd sago plantation would yield 25Mt of sago starch. Current price of sago flour is RM2,000.00/Mt, thus giving a gross return of RM50,000/ha/year. Comparatively to oil palm, the best CPO yield would be 6.0Mt/Ha/Yr. Under current price of RM4,000.00/Mt of CPO, this would give a revenue of RM24,000.00/Ha/Yr. Thus from this simple calculation, one could see the better revenue generated by sago.

(5) Of course the argument would then, that sago takes at least eight (8) years to maturity. That basically is not the main issue. Oil palm takes seven (7) years to full maturity. Though scout harvesting could begin on the 30 months after planting, but the return from 30-72 months are still considered not to the breakeven.

(6) But then, based on the existing market demand of sago starch, sago could still be harvest from the fourth year onward except the starch would not be of premium quality, nontheless would be acceptable for other industrial application. Thus in actual fact the Cash Flow comparative of sago and oil palm for the first 10 years would not be much different.

(7) Upon 10 years onward, definitely sago Cash Flow would be much better than oil palm, and even better since sago doesn’t need replanting. Thus, sago Cash Flow will never be cyclical in nature as compare to oil palm which need replanting by year 25th. Agronomically, for every two cycle of oil palm, there would be a lost of at least 10 years of production period.

(8) Based on the potential starch yield for sago and cyclical nature of the oil palm productivity, definitely sago has greater return as compare to the oil palm. If one goes further into the down stream of sago, whereby the primary yields are not limited to starch, but could further be expanded into ethanol, animal feed, composed fertilizer and energy without loosing the food value of the starch, as compare to the lost of cooking oil to diesel if CPO is to be converted as such.

(9) Personally and professionally, I would say, in the next 5-10 years, with Allah blessing, the price of sago logs could fetch RM150-200/palm which is double to triple of the existing price. Current price is basically cartel controlled and doesn’t at all reflecting the true market price. If this figure is attainable, then the prospecting Farm Revenue would be around RM22,000-30,000/ha/yr, which is definitely higher than oil palm at RM17,000-20,000/ha/yr based on current average yield and price.

(10) Sago in fact love to grow on alluvial soil, the soil that is most suitable for rice. Growing sago on peat, is really a though job. It is not a natural habitat for sago. My visit to the Molucas Islands, Papua New Guinea, Sumatera, Java, Kalimantan, Southern Philippines, Southern Thailand, and even the whole of Peninsula Malaysia and Sabah clearly indicates that sago grow well on alluvial soil. In Papua New Guinea, sago grow on mineral soil on the hills slope that are moist. The 2,000,000 hectares of sago in Papua and Papua New Guinea are alluvial marsh land, they are not really peat.

(11) The struggle and success of Sarawak to grow sago on peat would be of the world record. In Rhiau, though effort had been made to grow sago on peat, but their peat are much matured, as compare to Sarawak which are much woody and raw. Nonetheless, with proper soil treatment, water management,and improve agronomic practices, Sarawak one day, hopefully in the next 3-5 years we would be able to show the way.

(12) To me sago is a strategic crop. A crop that must be seen as a complementary to oil palm and rice. Sago has the potential to assist the nation, one day, to resolve our energy crisis through the real renewable energy of the ethanol production. The world climate had been uncertain. The food and energy crisis will be coming. We have to sediakan payung sebelum hujan.

(13) That are the fundamentals, why we are and must be pushing hard to make the Sago Plantation a real success. Now added with the development of the smallholders into the Satelite Estate, I believe, by the next 3-5 years, sago industry would be totally be different. My only hope and pray, let all those responsible be determined and persistence in the struggle to make sago our next State Golden Crop. As I said, Kalau tidak dipecahkan ruyung, masakan dapat sagunya, our struggle definitely is painful, but worth rewarding thereon. We must hold to that as we hold to the spirit of genggam bara api biar sampai jadi arang.

Johor Baharu, Malaysia
30 Jan., 2011