Malik Abdul Jabbar Zen, Ade Irma Diana & Khoirul Zadid Taqwa

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  • ISBN 978-967-394-230-5 [PROCEEDINGS OF IDMAC2015]

    9th ISDEV International Islamic Development Management Conference

    (IDMAC2015) 654

    SUPPLY CHAIN MANAGEMENT BASED ON ISLAMIC MICROFINANCE

    FOR SUSTAINABLE FEEDING

    Malik Abdul Jabbar Zen1, Ade Irma Diana

    2, Khoirul Zadid Taqwa

    3

    1 Veterinary Medicine Faculty, Airlangga University

    Mulyorejo, Surabaya 60111, phone (031) 5992785 2 Veterinary Medicine Faculty, Airlangga University

    Mulyorejo, Surabaya 60111, phone (031) 5992785 3 Business and Economics Faculty, Airlangga University

    Airlangga, Surabaya 60111, phone 1 malik.abdul-13@fkh.unair.ac.id 2 ade.irma-13@fkh.unair.ac.id

    3 khoirul.zadid-12@feb.unair.ac.id

    Abstract

    Sugarcane is one of the strategic agricultural commodities which provide many on

    farm and off farm side products. In 2014, sugarcane plantation area in Indonesia

    reaches 477.881 hectares, increasing about 1,84% over the previous year. That

    number is expected to continue to increase with the passage of the national sugar

    self-supporting program. Sugarcane byproducts that have not been utilized is dried

    sugarcane leaves, reached 30,8 tonnes/hectare. In the other side, the growth of cattle

    farms in Indonesia reached 15.494.290 cows. The problem is that scarcity of

    fertilizers and the availability of feed in dry season. From the problem, we need for a

    guarantor system availability of feed to prevent losses for farmers based on

    integrated cooperation. Islamic insurance is an insurance business based on the

    principle of helping (ta'awuni) and protecting (takafuli) each other among the

    participants through the creation of a collecting of funds (Tabarru' funds) that are

    managed according to Islamic principles to deal with spesific risks. Data collection

    method in this paper through literature studies using secondary data. The steps in the

    process is done as a foundation for developing the basic idea in providing solutions

    to problems that are formulated, included formulated themes and problems,

    collecting data method, analysis, conclusions and recommendations. Data analysis

    techniques using inductive analysis conceptual. Therefore this concept shows the

    supply chain management for sustainable feeding integrated with Islamic sugarcane

    plantation microfinance institutions (IFI's) has high chance to develop in Indonesia

    supported by public sector, private sector and third sector.

    Keywords: Islamic Insurance, Dried Sugarcane Leaves, Cooperation, Cattle faeces

  • ISBN 978-967-394-230-5 [PROCEEDINGS OF IDMAC2015]

    9th ISDEV International Islamic Development Management Conference

    (IDMAC2015) 655

    INTRODUCTION

    Indonesia is agricultural state which has many variations of agricultural products.

    Sugarcane (Saccharum officinarum L.) is one of the strategic agriculture

    commodities which provide many on farm and off farm products. Based on Angka

    Sementara (ASEM) 2011 from General Directorate of Plantations, sugarcane

    plantation area in Indonesia increased between 2000-2011 (Picture 1). Perkebunan

    Rakyat (PR), dominated most of the sugarcane plantation areas, followed by

    Perkebunan Besar Swasta (PBS) and Perkebunan Besar Negara (PBN). In 2011, the

    wide of sugarcane plantation areas in Indonesia up to 457.615 hectares or increasing

    0,77% than the previous year (Data center and Agriculture Information, 2013). With

    the governments program, sugar self-sufficiency 2014, one of the effects is

    sugarcane plantation areas become wider. So, the side product from sugarcane

    plantation will be increased. The side products are the dried sugarcane leaves,

    bagasses and molasses. If this side products do not recycle well it can be polluted to

    the environment.

    Cattles is one of the livestock. As a livestock animal, cattle divided into two types,

    beef cattle and dairy cattle. Cattle are herbivores, they have mastication behavior.

    Mastication behavior is the behavior that ruminants do to chew the feed again after

    the feed turn on to the rumen, from the rumen, the feed will be back to the mouth to

    doing mastication behavior. This behavior caused by cattles feed contains high crude

    fiber so to break the components of crude fiber, they doing mastication behavior.

    Figure 1: Graphic for Sugarcane Areas

    Source: Data Center and Agricultural Information 2013

    The prominent cows feeding is forages, bye products of agriculture, legumes and

    concentrates. The productivity of cattle depend on feed which given to them, so

    feeding must attended to quality, quantity and availability. Forages usually consist of

    grass and bush. On the rainy season, the availability of feed will be abundant, but in

    dry season the availability will be limited. If we save it in dry conditions, the forages

    can be used in dry season (Kuswandi et al, 1990). When the harvest time, the dried

    sugarcane leaves will be overflow, so we need to cultivate that by make a silages

    with fermentations process. Fermentation process can increase proteins, palatable

  • ISBN 978-967-394-230-5 [PROCEEDINGS OF IDMAC2015]

    9th ISDEV International Islamic Development Management Conference

    (IDMAC2015) 656

    and saving time. In the other hand, if we make fermentations feed, we can use

    probiotic microbiology to increasing palatable and to repair cattles gastric intestine

    system (Rusdi, 1992).

    With the availability of agricultural potential areas, it is good enough to develop as a

    cattles farm. There are many positive effects for the people, it can be a business

    opportunity to the people and increasing the income for the surrounding people who

    lived there. So, we need a systems which has mutualism symbiosis between

    sugarcanes farmer and cattles farmer to recycle any bye products from sugarcanes

    farm and guarantee for the availability of cattles feeding in dry season. . Supply

    Chain Management Based on Islamic Microfinance for Sustainable Feeding is a

    solution that can be options to face the problem above. Animal feeding insurance

    based on Islamic Microfinance which given to the member as a claim if they doing

    premium payments. If they doing premium payments cattles faeces they will get

    dried sugarcane leaves fermentation as animal feed. It can applied as a new

    innovation to reach the sustainability animal feed in Indonesia.

    SUPPLY CHAIN AND SUPPLY CHAIN MANAGEMENT

    Supply chain and supply chain management have played a significant role in

    corporate efficiency and have attracted the attention of numerous academicians over

    the last few years. Connecting and informing. Connecting and informing on Supply

    Chain, Supply Chain Management and distribution Management characteristics have

    contributed to the Supply Chain integration. This integration has generated the

    approach of extended corporate and the supply chain is nowadays manifested as the

    cooperative supply chain across intercorporate borders to increase the value across of

    the whole supply chain

    Ayers,J. B.(2001) defines Supply Chain as life cycle processes involving physical

    goods, information, and financial flows whose objective is to satisfy end consumer

    requisites with goods and services from diverse, connected suppliers. Mentzer, J.,

    Witt, W. D., Keebler, J., Min, S., Nix, N., Smith, D. & Zacharia, Z.(2001) defines

    Supply Chain as a set of entities (eg. organizations or individuals) directly involved

    in the supply and distribution flows of goods, services, finances, and information

    from a source to a destination (customer).

    According to Grant, D., Lambert, D., Stock, J. and Ellram, L. (2006), Supply Chain

    management refers to corporate business processes integration from end users

    through suppliers that provides information ,goods, and services that add value for

    customers.. The Supply Chain Management Professionals Council (2009) asserts

    that Supply Chain management (SCM) includes the designing and management of all

    activities involved in sourcing and purchasing, transformation, and all logistics

    management activities. Principally, it also includes coordination and partnership with

    network partners, which can be suppliers, mediators, third party service providers

    and customers. Fundamentally, Supply Chain management (SCM) coordinates

    supply and demand management within and across corporate

    Actually the theoretical framework of SCM is large. Yet, it is still about how to

    manage goods, services, or information in order to have added value. Therefore the

  • ISBN 978-967-394-230-5 [PROCEEDINGS OF IDMAC2015]

    9th ISDEV International Islamic Development Management Conference

    (IDMAC2015) 657

    crisis of feed for cattle can be solved by the Supply Chain Management Model

    integrated with Islamic Insurance (Takaful) based on Islamic Microfinance (Baitul

    Mal Wattamwil).

    ISLAMIC INSURANCE (TAKAFUL)

    According to ushl fiqh, the original legal position on any matter is halal until there is

    evidence prohibiting it. Cooperative insurance should thus be allowed since it is

    intended for a good cause and cannot be declared unlawful based on a mere

    presumption that is, without any specific injunction in the Quran. The academy

    further elaborated that the Shariah permits shareholding of capital, as Islam

    encourages movements of capital for the benefit of society as a whole. The Quran

    states that all resources must be put to optimum use, that all men are equal partners

    and must receive fair benefits from the use, and that everyone must help others who

    suffer from a misfortune. Insurance mechanisms founded on the basis of charity and

    cooperation is thus a means to bring equality to the participants of the mechanisms,

    as they alleviate the losses of the unfortunate through the pooling of member

    contributions.

    According to Indonesian Halal Council Fatwas,(DSN-MUI) 21/DSN-MUI/X/2001

    Islamic Insurance (Tamin, Takaful, or Tadhamum) is a medium to help each other

    between personal or party by investment in asset or tabarru which provide a return

    scheme to face a particular risk by Islamic Contract (akad).

    The word, takaful, originates from the Arabic word al-kafala, meaning joint

    benefit or shared responsibility. To confirm to the Shariah, tahakaful insurance

    must be policyholder-oriented, not shareholder-oriented. The contract must be of

    certainty; that is, the lenghth of the policy period is finite, and the amount of

    exchange. The contract must possess not only an element of mutual cooperation

    (shared responsibilities) among participants in dealing with losses but also an

    element of sharing investment income between the insurer and its policyholders

    according to a predetermined ratio (Kwon: 2007).

    According to Kwon (2007) Takaful operations in the primary insurance market can

    be broadly classified into one of the three models: a mudharabah model, a wakala

    model and a hybrid model. This paper will purpose mudharabah model without

    using money. The scheme will be explained below.

    ISLAMIC MICROFINANCE

    Since inception, Islamic seen as an important phenomenon in the process of

    development, especially in the context of globalization and liberalization whereby

    subsidy and grant based programs/schemes are losing their importance. Islamic

    microfinance sector is seen as the best option based on saving mobilization of the

    poor people and its linkage with income generating activities. The goal of Islamic

    microfinance is to target the poorest who worked in the informal sector of the

    economy. The marginal farmers, labors who sell locally grown foodstuffs; make

    brooms, tailoring in their little shops, etc. are coming under the jurisdiction of

    informal sector. Historically, these workers in the informal sector have been excluded

  • ISBN 978-967-394-230-5 [PROCEEDINGS OF IDMAC2015]

    9th ISDEV International Islamic Development Management Conference

    (IDMAC2015) 658

    from formal banking due to several possible factors. First they lack of the literacy

    and necessary connections to get loans. Second, such tiny loans is seen as financially

    unsustainable due to the high transaction costs that the bank has to face. In order to

    meet those costs, many conventional bankers believed that interest rates would have

    to be high. Third, workers in the informal sector were perceived as having credit

    risks because they do not possess physical collateral

    According to Hassan (2014), in holistic perspective, Islamic microfinance is a

    process of social intermediation and building social capital. Process of social

    intermediation is an investment that is made for development of both human

    resources and institutional capital to make marginalized groups to be self-reliant in

    preparing them to engage in formal financial intermediation. According to Elaine and

    Barton (1998), social intermediation is a financial intermediation with a capacity

    building component, aimed at those sectors of society that lack access to savings and

    borrowing facilities. It can be understood by transformation of beneficiaries into

    clients or customers and creation of local institutions that bridge the gap between the

    formal financial institutions and marginalized groups Islamic Microfinance which

    included Islamic Insurance makes this institution can develop the village in Malang,

    Indonesia. Islamic insurance ensures the cattle feed. Islamic microfinance gives

    added value in cattle product.

    PRODUCTION PROCESS FEED FERMENTATION AND ORGANIC

    FERTILIZERS

    "And verily in cattle that are important lesson for you. We give you to

    drink of milk in his stomach, and (also) on the animal there are many

    benefits for you, and some of it you eat". (al- Mukminun, 23:21)

    Waste dry sugarcane leaves can be used as ruminant feed quality. According

    Pangestu (2003), there are some advantages if sugarcane waste into a source of

    choice for the development of ruminant feed, which is tolerant of summer, resistant

    to pests and diseases, as well as readily available during the dry season when other

    forage is not available. But, dried sugarcane leaves also has the disadvantage of low

    levels of protein and dry matter digestibility. So it is necessary to find a solution

    efforts, among adding concentrate feed source of protein, energy, vitamins, minerals.

    Because the material is damaged, it should be done one way preservation wafer

    formation (Trisyulianti et al, 2003).

    According to Setiawan (2011), dried sugar cane leaves are used as a wafer, has a

    texture that is not too dense. According to Setiawan (2011) also, the content of

    nutrients present in the dry sugarcane leaves wafer better and in accordance with the

    standard nutritional needs of ruminant feed compared with the cane shoots wafer,

    wafer elephant grass and concentrate. In terms of nutritional content, the results

    obtained through the proximate analysis are as follows on table 1.

    Nutrient Content Percentage (%)

    Water Content 13,21

    Crude Protein 10,45

    Crude fat 4,31

  • ISBN 978-967-394-230-5 [PROCEEDINGS OF IDMAC2015]

    9th ISDEV International Islamic De...

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