Redesign farm policy<\/p>\n
President Megawati Soekarnoputri's widely criticized current
\ntour of Europe could still go a long way in serving national
\ninterests if her attendance at the second World Food Summit in
\nRome leads her to full awareness of how vital food security is
\nand how urgent is the need to restore agricultural development on
\ntop of her government policy agenda.<\/p>\n
Heartening indeed is that an early sign of reckoning is
\nalready on the horizon. Agriculture minister Bungaran Saragih,
\nwho is accompanying Megawati, asserted that the President has
\napproved a plan to increase import tariffs on food commodities
\nand other farm produce to protect Indonesian farmers.<\/p>\n
The Indonesian delegation to the Food Summit seems to have
\nincreasingly realized that like air and water, food is too vital
\na commodity to be left entirely at the mercy of the market
\nmechanism.<\/p>\n
It is an irony that at a time when the International Monetary
\nFund has been flexing its financial muscle to pressure Indonesia
\ninto opening wide its agricultural market, food producers in the
\nUnited States and Europe are enjoying huge subsidies that enable
\nthem to dump their cheap produce on the international market,
\nincluding Indonesia.<\/p>\n
Only last month U.S. President George W. Bush signed a US$170
\nbillion farm bill that grants heavy subsidies and other forms of
\nfarm support to such export crops as wheat and soybean, whereas
\nfarmers account for only about 2 percent of the American
\npopulation.<\/p>\n
The World Bank has estimated that farm-support policies in the
\ndeveloped countries grouped in the Organization for Economic
\nCooperation and Development cost about $330 billion a year, or
\naround 1.3 percent of their gross domestic product, even though
\nagriculture accounts for less than 5 percent of their national
\nincome. The financial support is more than five times higher than
\ntheir average spending on overseas development assistance and
\ntwice the value of farm exports from developing countries.<\/p>\n
The governments that generously grant such huge farm subsidies
\nare the very ones which have staunchly preached to developing
\ncountries that government intervention distorts market and
\nresource allocation and spreads benefits unevenly. When the
\nUruguay Round implementation in agriculture is supposed to have
\nbeen completed for developed countries, their subsidized food
\nexports have been undermining the markets and farm development in
\nthe least developed countries.<\/p>\n
The Indonesian government is, however, well advised to realize
\nthat trade policy (tariff protection) is only one element, and in
\nfact not the most important one, of a comprehensive agricultural
\ndevelopment program needed to enhance food security, reduce
\npoverty and protect the environment.<\/p>\n
Even the tariff measure alone would pose a dilemma in view of
\nthe country's heavy reliance on imports for such food commodities
\nas rice, sugar, corn and soybean and meat.<\/p>\n
First of all, high tariff barriers would be rendered
\nmeaningless without an efficient and honest customs service and
\nwould instead increase margins for smugglers.<\/p>\n
Sharply increasing import tariffs at a time when dependence on
\nimports is still very high would steeply raise food prices and
\nstrengthen inflationary pressures until domestic production can
\nexpand to reduce the domestic deficit.<\/p>\n
Since high food prices would inflict the heaviest burden on
\npoor households as food usually accounts for more than 60 percent
\nof their spending, well-managed social safety net programs are
\nneeded.<\/p>\n
Most important is that there should be a national political
\nconsensus to support the policy and to make consumers willing to
\npay high food prices. It is such political consensus that has
\nenabled governments in developed countries to allocate huge sums
\nof taxpayers' money to support their farmers. It is also a
\nsimilar political commitment that has made consumers in Japan and
\nSouth Korea willing to pay unusually high prices for their food.<\/p>\n
However vital food security is, the blunt reality is that
\nfood-crop farmers never find themselves among the highest earners
\nin the rural areas, especially in Java where the average farmer
\nhousehold ownership of farmland is very small. Food security
\ntherefore should only be part of a broad-based rural development
\nprogram because the ultimate goal is to increase rural household
\nincomes from farm and off-farm activities.<\/p>\n
It is indeed high time to revisit our rural development
\nprogram, notably its agricultural component, even though it is
\nnot an easy task given the severe state budget restraints.<\/p>\n
But if the government is really serious about its commitment
\nto placing rural development, notably food security, on top of is
\npolicy agenda, that policy should be translated into the
\npromotion of a conducive regulatory and economic environment to
\nencourage farm production.<\/p>\n
Most important too is that the government should improve
\nministerial coordination and cooperation with local
\nadministrations in mobilizing resources into such basic
\ninfrastructure as irrigation, transportation and processing
\nfacilities, rural financial networks and farm research stations
\ndesigned to meet area-specific conditions.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/redesign-farm-policy-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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