Fertilizer prices and farmers' woes<\/p>\n
Prijono Tjiptoherijanto, Jakarta<\/p>\n
Mubyarto's article (Kompas, Jan. 12) again reminds us of a
\nbasic farming problem yet to be resolved. The agronomics
\nprofessor of Gadjah Mada University invites Indonesian economists
\nto examine and review the idea of granting a form of subsidy to
\nfarmers for fertilizers.<\/p>\n
Beginning his analysis by criticizing economists of the
\nconventional free-market school, Mubyarto again presents his very
\nfundamental view, which is frequently overlooked as various
\nissues are mostly approached in a superficial way.<\/p>\n
Fertilizer is indeed a life-and-death issue to families and
\nthose who we could call \"true farmers\" who really work on the
\nland -- not the white-collar or \"windfall\" farmers who often act
\nas leaders of agricultural organizations or attend overseas
\nconferences to discuss farming matters and farmers' living
\nconditions. To these true farmers, fertilizer prices have become
\na headache they are unable to overcome -- rather they have to
\nrely on the government's policies and its attitude toward
\nfarmers.<\/p>\n
The government's reaction shows whether it is really
\ninterested in protecting the livelihoods and welfare of farmers
\nor is content just to talk about the problem.<\/p>\n
For a long time, especially after the 1997 economic and
\nfinancial crisis, many farm workers and small farmers have served
\nas laborers or cultivated their own small plots of farmland while
\nraising cattle as a side job. The main problem facing cow
\nbreeders is the availability of grass as cattle feed. If properly
\nraised, in three or four months their cows will turn profits from
\n50 percent to 100 percent of their purchase prices. The earnings
\nof about one to one and a-half million rupiah per head of cattle
\nis significant to these poor farmers. However, it is increasingly
\ndifficult for these farmers to find grass to feed their cattle,
\nor if there is any grass, the quality is not good.<\/p>\n
To these small farmers fertilizer prices continue to be a
\nheadache.<\/p>\n
Meanwhile, rice prices have dropped as rice imports enter the
\nmarket and sales are not enough to even cover production costs,
\nlet alone the need to set aside rice in the husk for seed.
\nTherefore the ever-rising fertilizer prices make rice farmers'
\nlives harder too. The problem is compounded because the use of
\nmanure in domestic production is not extensive.<\/p>\n
The problem of Indonesian farmers is difficult to solve by
\nmeans of a conventional economic approach. Though James Roumaset,
\na U.S. researcher from Hawaii University, once concluded that
\nfarmers in Asia are risk-neutral, meaning that they will use new
\ntechnology products including fertilizers and high-yielding
\nvarieties if their welfare is improved, what can they do if
\nfertilizer prices keep soaring?<\/p>\n
They have been bound by and are dependent on pesticides and
\nmodern technology since the \"Green Revolution\" in the 1970s and
\ntheir condition should be balanced by government policymaking
\nthat will directly benefit them.<\/p>\n
Under critical and less-normal circumstances, measures and
\nideas that are not restricted by conventional rules and axioms
\nare frequently needed. In the business sense, we should be able
\nto get away from the \"thinking box\" usually limited by theories
\nand assumptions for normal circumstances only.<\/p>\n
However, this attempt to \"abandon normalcy\" does not mean we
\nrule out standard principles of economics.<\/p>\n
Basically economic policy is like a surgical knife in the
\nhands of a physician. Its use depends on the ability and skill of
\nthe surgeon but it also depends on the patient's condition. Any
\nmistake in diagnosis and in treatment is highly likely to produce
\na detrimental effect. And doing nothing can also be fatal.<\/p>\n
The writer, an economist, is a former secretary to the Vice
\nPresident.<\/p>",
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