Lucrative pepper farming

Grunsin (centre) checking on pepper vines during a field visit.

KUCHING: The transformation of the pepper industry has seen many smallholders in Sarawak expanding their farms and boosting their family incomes.

The catalyst for them to cultivate these plants is undoubtedly the strong domestic and global white and black pepper prices, which have soared to historical highs since the upswing in 2009.

New farms, including commercial estates, have sprouted up not only in Sarawak but also Peninsular Malaysia states such as Johor, as investors are lured into the commercial ventures in anticipation of the lucrative returns from this golden crop.

More replanting activities are going on and some farmers have shifted to pepper planting from cocoa while others were reported to have opted out of tapping rubber because of the collapse of the rubber price.

Sarawak’s two large pepper estates in central Sarawak, which have 22,000 vines in total currently, are expected to double their holdings by December 2016.

In recent years, landowners and investors in Kedah, Perak and Malacca have ventured into pepper planting. Sabah is a traditional pepper producer, albeit in small volume.

Sarawak remains Malaysia’s key pepper producing state, contributing more than 95% of the country’s output. There are currently between 18,000 and 20,000 pepper farm families in Sarawak, with 68,000 to 70,000 people involved in pepper cultivation, according to Malaysian Pepper Board (MPB) figures. Pepper farm land covers a total of 16,000ha.

“More than 1,000 smallholders are now planting more than 2,000 pepper vines per hectare. There are some who have increased their holdings to 5,000 vines each,” said Datuk Grunsin Ayom, who retired as MPB director-general yesterday.

According to him, a family with 1,000 matured vines could earn a net income of RM100,000 per harvest of black pepper at current price (gross income of RM140,000). The same family could earn more if it produces the higher-priced white pepper.

Kuching Grade 1 black pepper currently trades around RM48,500 per tonne while black pepper RM28,000 per tonne, off from their historical peaks of RM50,000 and RM30,000 per tonne respectively months ago.

In 2009, the white and black pepper fetched around RM12,000 and RM6,500 per tonne respectively.

Unlike oil palm plantations which rely heavily on foreign workers, the pepper industry employs few migrants.

Grunsin, who joined the Malaysian Pepper Marketing Board (MPMB) as a market promotion officer in 1979, had witnessed the transformation of the pepper industry in his 37 years of serving with the agency.

He graduated as an agriculture economist at University of Reading, UK at the age of 22.

On his return to Sarawak, he was a temporary teacher for a year before joining MPMB.

Grunsin diligently worked his way up the ladder and had served in different positions, including as MPMB Sarikei branch manager. He has the distinction of being the first Sarawakian appointed as MPMB general manager.

Following the dissolution of MPMB in 2006 to pave the way for the birth of MPB, Grunsin was made its first director-general, the top post he served until retirement.

What had been the most significant changes to the Malaysian pepper industry over the past decades?

Grunsin cited the success of Malaysia in capturing a sizeable international market via direct sales of the spice to dozens of consuming countries instead of going through Singapore as one example.

“Back in the 1980s, more than 80% of Malaysian pepper was exported overseas via Singapore. The situation reversed in mid-1990 via licensing conditions and promotional efforts when over 80% of our pepper was shipped direct to the terminal markets (now over 30 countries),” he told Metro Sarawak.

In the past five years, Malaysia earned about RM1.7bil in foreign exchange in the export of pepper berries, crushed pepper or pepper powder and sterilised pepper.

He said years of promotional and marketing activities had significantly boosted domestic pepper consumption, which jumped to about 9,000 tonnes a year now from merely 500 tonnes. He attributed the surge to the growing usage of pepper as an ingredient in food processing and manufacturing as well as the government’s efforts to make Malaysia a halal hub.

During his tenure as director-general, Grunsin established PMB regional offices in Sarawak, Sabah and Peninsular Malaysia. PMB, which saw its total staff strength doubled to some 400, had also set up a sterilisation plant in Sibu while extending its warehouse facilities to make it possible to obtain hazard analysis and critical control points (HACCP) certification. (HACCP is a systematic prevention approach to food safety from biological, chemical and physical hazards in production processes that could cause the finished products to be unsafe.)

At the farm level, Grunsin said the family income of pepper planters had increased tremendously over the years.

“If pepper prices are maintained at current levels, each farm household can achieve an income of at least RM4,000 per month by 2020,” he added.

Grunsin was optimistic that the strong prices could be sustained as global demand for pepper had outpaced supply for years now, and this trend was likely to continue.

Describing the medium term outlook for the pepper market as still “very bullish”, he said based on the International Pepper Community (IPC) 2016 forecast, global consumption for the year is about 463,000 tonnes against production of 414,000 tonnes, resulting in a shortfall of 49,000 tonnes.

Furthermore, only 312,000 tonnes by the producing countries are expected to be made available for export.

In 2015, global consumption was estimated at 439,282 tonnes against production of 407,158 tonnes.

Malaysia, the world’s fifth producer among IPC members, recorded an output of some 28,000 tonnes last year against Vietnam (world’s No 1 producer and exporter, estimated at 130,000 tonnes). Other top producers are Indonesia (71,500 tonnes), Indonesia (65,000 tonnes) and Brazil (41,500 tonnes).

Among non-IPC producers, China’s estimated output last year was 29,000 tonnes and newcomer Cambodia had 11,000 tonnes. China’s production was unable to meet its domestic consumption and it has been importing mainly from Vietnam to make up the local demand.

Grunsin said the growth of the industry had put pressure on the supply of fresh pepper cuttings (planting materials) and support poles for pepper vines.

This year, MPB has provisions to supply free pepper cuttings to some 450 farmers, including recipients of 1Azam (poverty eradication programme).

It also provides farm inputs, such as fertiliser and technical expertise as well as training to farmers. New planters could buy fresh pepper cuttings from dozens of farms registered with MPB.

During his tenure, Grunsin said his only regret was being unable to visit all the key pepper planting areas nationwide although he had toured most of the farms.

To beef up pepper research and development works, MPB signed a memorandum of understanding (MoU) with Swinburne University Technology Sarawak on two research projects last month.

Project One is on “De novo assembly of the black pepper transcriptome and molecular characterisation of pepper defence genes” and Project Two on “Transcriptomic analyses and molecular characterisation of flower and fruit development in black pepper”.

Both projects, which are expected to take three years, aimed for varietal improvement through the use of biotechnology in order to increase yields.

Under the current 11th Malaysia Plan, Grunsin said a proposed national pepper development and extension centre would be built in Semenggok. The proposed centre will house research laboratories, administrative buildings and an agriculture extension unit.

A proposed field research station in Semenggok is currently in the works.

“I would like to see more Bumiputras go into pepper cultivation and more youths involved in pepper planting and pepper value-added activities.

“I would like to see some farmers move up the value chain and get into the retail packaging business. This would, however, require technological know-how, quality control and marketing expertise,” said Grunsin.

He hopes that the new leadership in MPB would not only continue with its good work but also inject new ideas to spur the continued growth of the pepper industry.

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