An Experimental Project (EP) and on-farm demonstrations (Pilot Project /PP) are carried out before sericulture is promoted to potentially participating farmers. EP tests the sericulture production in project areas, including mulberry cultivation and silkworm production.
On-farm demonstrations increase participation of farmers due to easily comprehensible training courses. The farmers can see and learn practically how sericulture production is
executed and how it positively affects their income. Participation often increases when farmers have conceived thoroughly how to carry out sericulture.

The Experimental Project is planned for one year and a Pilot Project is prepared for two years (see figure 8, page 64).

For mulberry cuttings required by participating farmers the Non Government Organization has planted sufficient supply of mulberry trees. To cultivate an area of 1 ha mulberries an amount of 20,000 mulberry cuttings are needed. Mulberry cuttings can be cultivated from the branch of the mulberry tree itself. The Non Government Organization cares for distribution and supply of mulberry cuttings from the Experimental Project so that farmers get cuttings on time to begin cultivating. After one-year growth farmers can transfer mulberry cuttings again to other farmers.

Training has to be conducted after farmers display interest in joining sericulture activities. Training courses give practise oriented know-how. After the training, the farmer’s land is surveyed. This survey is needed to investigate and gain certainty of the availability of such production factors as the following: size of land for cultivation; height of location levels and availability of family labour. The training courses are conducted in the raining season (from October to March) because farmers can successfully cultivate mulberry trees. The water is available, they can plant mulberry cuttings.

Extension services are an important element within the array of market and non-market entities and agents that provide human capital enhancing inputs, as well as flows of information that can improve farmers` and other rural peoples` welfare; an importance long recognised in development dialogue (Leonard 1977; Garforth 1982; Hazell and Anderson 1984; Jarret 1985; Feder, Just and Zilbermann 1986; Roberts1989 in Anderson and Feder 2003).
The Goal of extension services in this project is to give information or solutions to farmers involved in sericulture. With thisservice the farmers are to be controlled and supported.

The investment required for a sericulture production unit amounts to about USD 404 for small land, USD 600 for medium and USD 823 for larger land (see table 7). Because the target
group is defined as small farmers in the rural area the farmers' financial capacity is not given. The farmers would have to be provided with an adequate credit program (Henny, 2002)

Credit supports farm development in at least three ways:

• Credit programs with low interest rates help small farmers to solve the capital problem.

• Credit programs help small farmers to get farm inputs to the farm.

• The farmers, who join a credit program, also get the training and consulting service. (Hermanto, 1992).

The following activities need to be organised:

For sustainability of the sericulture project, silk products need to be sold. The silk products are dried cocoons, silk yarn and clothes. The products can be sold at domestic markets and export market.

Export markets need large quantities and high qualities. Table 12 shows cocoon grading for international markets.

Source: Veda, K. (1997) p. 300, modified.

• Results of cocoon filament length

Cocoon filament length (metres)

Less than 800

From 891 up to 960

From 961 up to 1030

From 1031 up to 1100

From 1101 up to 1170

From 1171 up to 1240

From 1241 up to 1310

From 1311 up to 1380

From 1381 up to 1450

More than 1451

Points

38.0

38.5

39.0

39.5

40.0

40.5

41.0

41.5

42.0

42.5

• Results of reelability

Reelability (%)

Less than 39

From 40 up to 46

From 47 up to 53

From 54 up to 60

From 61 up to 65

From 66 up to 70

From 71 up to 76

From 77 up to 80

From 81 up to 85

More than 86

Points

47.0

47.5

48.0

48.5

49.0

49.5

50.0

50.5

51.0

51.5

• Cocoon quality grading

Grades

4 ^th grade

3 ^rd grade

2 ^nd grade

1 ^st grade

Excellent

Points

Less than

87.5

88.5

88.0

90

89.5

89

91.0

90.5

More than

91.5

Table 12: Cocoon grading

The price for an excellent cocoon quality is the highest cocoon price. The excellent cocoons have a filament length of minimum 1171 metres and a reelability of a minimum of 61 percentages. The lowest quality is the 4th grade. Standard quality is commonly defined as a grade of "2A".

To achieve the above named activities the NGO requires special personnel. The persons that should be employed are:

1. Project Manager

Projects are recommended to designate or hire a project manager with a background in sericulture production and project management to coordinate the team effort. The level of effort required is to be determined by local needs. Duties include coordination of all project activities thus, tracking and reviewing progress and ensuring that efforts are directed towards the project goals and coordinating project report preparation. The structure of the project organisation is presented in figure 7 below.

Figure 7: The Structure of project organisation

A project manager organises three sections: Sericulture, administration and processing of cocoons section.

The sericulture section comprises responsibilities for training the farmers, young worm cultivation and distribution, extension services for the farmers. A responsibility concerning the administration section is for administration works, credits and purchasing of cocoons. The processing section includes responsibilities for cocoons processing, silk yarn and clothes.

2. Technical Support Manager of sericulture production

Future projects should employ core staffs that are informed in detail about the project activities of participating agencies. Assigning personnel to the project for a specified time period of two to three years during implementation helps to ensure they give the project proper attention, are accountable for progress and feel a sense of ownership in the project. Participating agencies must ensure that adequate staff time is allocated for each aspect of the project, including follow-up and report preparation, both key components of effective technology transfer.
The project's Technical Support Manager is responsible for mulberry section, young silkworm cultivation at "nucleus"-area and cocoon production at "plasma"-areas. He/she will be supported by field staff.

3. Trainer and field staff

Specialised agents commonly are employed after completing advanced formal training in their area of specialisation. To be effective, however, they also need competencies in the extension education process. In addition, they must understand the human development of learning, social interaction processes and they must become knowledgeable about the organisation within which they work.

4. Technical assistance

In order to produce high quality cocoons, the whole silkworm cultivation process must be done with care. One of the important factors is for farmers to cultivate the silkworms with using the methods given in the training course. The Banyumas Sutera Alam`s supervisors should be providing assistance to farmers. Because the silkworm cultivation is a new activity, the availability of technical assistance is perceived as valuable because it can give farmers success in the project.

5. Administration and accounting personal

Scopes of work for these positions are to manage activities administration and the bookkeeping of all cash flows in the project.

1. Target groups

The target groups are small farmers in rural area in Central Java, who have their own land for planting mulberries and have family labour available.
The Project will impact directly on the disadvantaged farmers; -they are the villagers who are the underprivileged group of society eking out a subsistence level of living. They were born on the land. Their parents have no education, are illiterate, -their children often dropout of school at primary level due to lack of motivation.
The whole family can be involved in the cultivation of silkworm, grand parents, parents and children can all participate in the harvesting of the mulberry leaves and feeding the silkworms which is a task carried out 3 times per day and in the cleaning and disinfecting of the silkworm shed.

2. Promotion of Women

This project will also improve the life of women in the following ways:

• The cultivation of silkworm is not physically demanding work so village women who need to supplement the family income can carry it out.

• Women will be involved in the administration of the project especially in the running of the cooperation.

• In the cocoon sorting stage female labor is more suitable as it demands patience, - also in the spinning and weaving of the Silk, 90 % of the labor force is women.

• By offering working opportunities to the women it will increase their income and also create an incentive to avoid young marriages which is still a social problem in the villages.

3. Beneficiaries

As more farmers realize the potential in silkworm farming they will change from seasonal dependent crops to mulberry plantation. Within the first 5 years of the project 2500 farmers will be targeted with the training and support programs. Potentially 10.000 people can improve their conditions.
Employment will also be available in the spinning and weaving and garment making when they come on line in 3-5 years from the start.

4. The activities of farmers

Mulberry cultivation

The processes of planting mulberries are: preparing of land, planting of the mulberries cuttings, harvesting mulberry leaves and cutting of branches.
The cuttings of mulberries must be free from diseases, be aged from three and half months olds and must come from prime seeds. Farmers directly plant the cuttings in the cultivated and fertilized land.
The first harvest of mulberry leaves is up to six months after planting and leaves can be harvested every day for one month. The next harvest is three months after cutting of the branches.

Cultivating silkworm

Because of the high risks and the quite expensive tools and know how included, farmers start to rear silkworms in the 4th instar. Banyumas Sutera Alam does the silkworm rear until 3rd instar.
Before the rearing of the silkworms, farmers empty and clean the rearing shed.
Feeding the silkworms with fresh mulberry leaves is done three times a day: morning, noon and evening
It takes around 20 days from 4th instar until the cocoons can be harvested. The silkworm rearing can be done for 8-10 periods per year.

The complete project is divided into four overlapping phases:

1. Experimental Project (EP)

2. Pilot Project (PP)

3. Nucleus Project (NP)

4. Industry Project (IP)

The Overview of the project plan is shown in figure 8.

Figure 8: The Silkworm project plan BSA

Source: BSA (1998), modified

1. Experimental Project (EP)

The project duration is 18 months. The project area is situated in Kaliori Village, Banyumas, Central Java and covers 2 hectares.
This Stage is to experiment in both the cultivation of various varieties of mulberry plants and breeding of silkworms to the stage of producing cocoons. In other function this stage is as source of mulberry cuttings for the next project stage (Pilot Project).

The materials from of these plants will be used for further planting of ten hectares on the assumption that this planting will provide:

1 Hectare block

: 20,000 Mulberry plants

1 Mulberry plants

: 10 cuttings

1 Hectare (Production)

: 200,000 cuttings

From 2 hectares we will produce 400,000 cuttings.

Our quota for the pilot stage (10 hectares) is 200,000. The remaining 200,000 cuttings will be divided between the farmers who attend our training courses.

The progress of the Experimental Phase will be carried on at the same time as Phase II (Pilot Project) and Phase III (Nucleus Project).

2. Pilot Project (PP)

The project is planed for duration three years with the area 50 hectares in five locations of 10 hectares each. The reason for choosing 5 locations is to attract more farmers who will be able to see the progress of the project in their own locality.
The overall goal of this project is to improve the living standard of the targeted farmers by enabling them to increase their income through silkworm farming. Each farmer family will manage approximately 0.02 hectare of mulberry plants. At the same time, using the now-grown mulberry, the farmers will also start rearing the silkworms, which eggs will be supplied by the project partners on low interest credit system. The project partner will buy the cocoons from the partners and sell them to Indo Jado company.

The Objectives for this stage are:

• Training program 600 catalysts for the cultivation of both mulberry plants and silkworm to the stage of producing cocoons.

• Preparation of land

• Supplying mulberry cuttings for the farmers for planting

• Supplying fertilizer, pesticides,

• Supplying materials for the farmers to construct simple sheds and racks for the silkworm.

• Supplying the early instar silkworms to the farmers

• Receiving the cocoons and sorting and drying them

Training courses will be carried out 10 times each year with 20-25 farmers per course. 200 farmers will be trained each year. The training centre will be at Kaliori as the infrastructure is already available, including meeting and accommodation facilities.

After the farmers complete the course they will practice their training in their own locality.

3. Nucleus Project (NP)

Duration of the project is for 5 years with an area for 2,500 hectares in 5 locations of 500 hectares each.
In this phase the BSA acts as the catalyst and the farmers as the nucleus.
Cooperation between the two is as follows:

Banyumas Sutera Alam’s Role :

• Continuing the training program

• Supplying the mulberry cuttings

• Supplying the materials for farmers to cultivate land and build silkworm sheds.

• Supplying the early instar silkworms

• Receiving cocoons, drying and processing to the stage of marketing.

Farmers Role:

• Preparing their land, planting mulberry cuttings as the source of food for the silkworms

• Rearing silkworms to the stage of cocoon production, which will then be processed by the Banyumas Sutera Alam.

• Building silkworm sheds.

4. Silk Industry Project

This stage is the added-value production of Silk garments by use of the traditional methods of spinning and weaving, -thus encouraging the home industry. This stage can be done in the 3^rd/4^th year when the supply of cocoons is sufficiently stable.

The project is designed for ten years, started from 1998 and will be completed in 2008. Duration of each sericulture period cycle at the project is one month. The number of period’s cycle in a year is ten periods.

1. Investments

Table 13 (page 48) shows the detail of investment by three size of farm. The small size of farm requires USD 400, medium size of farm USD 593.82 and larger size of farm USD 822.94. Proportion of mulberry section in the budget for small size of farm is at 21 percent, middle size of farm at 34 percent and larger size of farm at 49%, graphically detailed in figure 9.

Figure 9. Mulberry and silkworm section proportion in budget of sericulture investments. The silkworm section shows higher proportion than that of mulberry sections, particularly by rearing-sheds and accessories (e.g. seriframe). Due to these investments, credits for smallholders are required.

Note:
* Price of rearing sheds: small size of farm = 176.47 USD; middle & larger size of farm = 235.29 USD
# Price of storage: small size of farm = 41.18 USD; medium & larger size of farm = 58.82 USD

Table 13: Investment of sericulture production for the farmers with three sizes of farm (USD)

2. Cash flow

Due to grow of mulberry, the leaves can be used for the feeding of worms up six months after they are planted, so that the first cocoons production in first year starts on seventh month. In the first year of cocoons production the small size of farm can cultivate only a quarter box of worm per period, middle size of farm a half box of worm, and larger size of farm 0.75 box of worm. Total of box in the first year small size of farm can cultivate 1.25 boxes of worms; middle size of farm cultivates 2.50 boxes of worms, and larger size of farm 3.75 boxes of worms.

These sum of worms box increase in the second, third year and reach in the forth year. Complete of mature worms requiring is presented in Appendix 2.

Assumed, that one box of worms can produce 25 kg fresh of cocoons, with the price of fresh cocoons 2.08 USD per kg in the first and second year, and 2.38 USD up third to tenth year, so that income in first year for the small size of farm: 1.25 boxes x 25 kg x USD 2.08 = USD 65; middle size of farm: 2.50 boxes x 25 kg x USD 2.08 = USD 130; larger size of farm: 3.75 boxes x 25 kg x USD 2.08 = USD 195.

Besides of fresh cocoons the farmers can sell mulberry branch as cuttings. Assumed, small size of farm can produce 10,000 pieces of cuttings; middle size of farm 15,000 pieces of cuttings and larger size of farm 20,000 pieces of cuttings. The price of cuttings was assumed USD 0.002 per pieces, so that small land has additional income in worth of USD 20, middle size of farm USD 30 and larger size of farm USD 40. Total of revenue for small size of farm = USD 85; middle size of farm USD 160 and larger size of farm USD 235. Complete of revenues are presented in Appendix 3.
In the first year cost for the small size of farm USD 39.12; middle size of farm USD 88.52 and larger size of farm USD 154.88. The majority of sericulture costs are labour costs (± 60 %) and rearing of silkworm (± 30%). The costs are detailed in Appendix 4 to 6.

3. Investment Analysis

Investment analysis used the data with the basis of costs and revenues from three sizes of farm. In the calculation was assumed reference interest 13 % p.a. and ten year for duration. Results showed that all of three sizes of farm are profitable. The internal of return (IRR) for small size of farm is at 48.42%, middle size of farm is 54.26% and larger size of farm is 72.70%. Net present worth (NPW) for small size of farm is USD 1,148.42, middle size of farm is USD 2,526.06 and larger size of farm is USD 3,534.86.

The values of Benefit Cost Ratio (BCR) for the three sizes of farm are more than 1.00. The complete of result is shown in table 14.

Table 14: Investment Analysis of sericulture production (USD)

Sensitivity analysis

Sensitivity analyses are carried out on two groups of variables: income variables and production costs variables. Six models are simulated with variation of values 20 % to 30%. Each model simulates a situation of sericulture production.

1. Frequency of production cycles per year: 7 periods

2. Fresh cocoon production per box: 20 kg

3. Total of grownup worm boxes

   • Small size of farm: 0.75 box

   • Middle size of farm: 1.5 boxes

   • Larger size of farm: 2.25 boxes

4. Price of fresh cocoons: 1.90 USD

5. Price of mature worm: 12.86 USD

6. Hired labour per day: 1.19 USD

Model I, II and III represent the unfavourable of environments for sericulture production e.g.: long dry season, diseases of mulberry and silkworms etc. Model IV, V and VI represent the economically influence e.g.: increase of costs, and decrease of sell price of cocoons
Results are shown in table 15 to 17.

Small size farms

No

Model

IRR (%)

NPW(USD)

BCR

1

I

24.28

199.31

1.29

2

II

35.38

515.24

1.38

3

III

30.58

357.28

1.34

4

IV

16.65

347.98

1.31

5

V

45.25

1,013.91

1.51

6

VI

37.68

738.25

1.39

Table 15: Result of sensitivity analyses for small size farms

Middle size farms

No

Model

IRR (%)

NPW(USD)

BCR

1

I

41.26

627.90

1.29

2

II

46.31

1,259.76

1.39

3

III

43.91

943.83

1.34

4

IV

28.99

951.90

1.31

5

V

51.44

2,257.10

1.52

6

VI

44.56

1,668.61

1.39

Table 16: Result of sensitivity analyses for middle size farms

Larger size of farm

No

Model

IRR (%)

NPW(USD)

BCR

1

I

54.34

687.54

1.21

2

II

61.90

1,635.33

1.31

3

III

58.40

1,161.43

1.26

4

IV

41.92

1,136.21

1.23

5

V

69.58

3,131.35

1.43

6

VI

61.30

2,192.85

1.31

Table 17: Result of sensitivity analyses for larger size farms

The results (table 15, 16 and 17) showed that all of three sizes of farm still are profitable, even values 20 % to 30% changed.
The Frequency of production cycles per year (model I) is more sensitive than other variables, but such the value has changed from 10 to 7, 30% decreased, results were rentable.
The price of mature worm (model V) had the best results, even the price increased from 10.71 to 12.86 USD.
In compare between the unfavourable of environments variables (Model I, II and III) and economically influence variables (Model IV, V and VI), unfavourable of environments variables had more influenced to the profit.

Critically value

Table 18: Values minimum of key variables