When agribusiness benefit farmers?<\/p>\n
Agribusiness has yet to benefit the Indonesian farmers even
\nthough it has been cited as one of the main agendas of
\nagricultural development. The issue was the central theme of this
\nyear's Agricultural Day over the weekend. H.S. Dillon, an
\nagricultural policy analyst and international commodity
\nnegotiator based in Jakarta, examines the issue.<\/p>\n
JAKARTA (JP): In the past five years Indonesia has been
\nmesmerized by the magic of agribusiness. Several academics have
\ntouted it a \"paradigm shift\", with agricultural bureaucrats
\nfalling over each other to jump on the bandwagon. They have
\njoined academics in chanting the agribusiness mantra, and
\nattributing it to the power to cure all rural ills. In short,
\nthey regard agribusiness as a panacea. But how far off the mark
\nare these people?<\/p>\n
What is being termed a paradigm shift is actually more a
\nreflection of myopia on the part of bureaucrats and academics.
\nThe farmer or owner of a farming business has always had to adopt
\na systems approach -- he or she has to secure inputs, manage the
\nproduction process, and market the produce. Only academics and
\nbureaucrats have been wearing blinders, due either to narrow
\ndiscipline, overspecialization or to the compartmentalization and
\nprotection of turf.<\/p>\n
What is the logic of traditional Indonesian agriculture? With
\na proliferation of small farms -- despite the existence of
\nmarkets, the distribution chain is controlled by middlemen and
\nsmall-scale processors. With low productivity in most of the
\ncommodities, few forward or backward linkages to other rural or
\nurban enterprises exist.<\/p>\n
Juxtapose this to the first form of agribusiness introduced to
\nIndonesia -- the plantation. This was, and continues to be, a
\nsingle enterprise performing a sequence of activities, from
\nprimary production to marketing. Plantations, either private or
\ngovernment-owned, have been virtual enclaves, with relatively few
\ngrowth linkages to the small farm sector. The employment they
\nhave generated is more akin to indentured labor, filled mostly
\nfrom outside the local communities. They have not transferred any
\nnotable skills and technology to small farmers in their
\nsurroundings.<\/p>\n
What drives modern day agribusiness? First and foremost, the
\ncorporations are in business to garner returns and not for
\ncharity -- profit is the survival rule. Second, their overriding
\nmission is to provide safe, high quality food at competitive
\nprices. Of course, many of them specialize in providing inputs
\nsuch as machinery and support services somewhere along the food
\nchain.<\/p>\n
Third, they will source globally, not only for commodities,
\nbut also for inputs and services such as finance, technology, and
\nhuman resources. Finally, Indonesian agribusiness is geared more
\ntoward meeting the demand of middle-class consumers than to
\nenhancing the productive capacity of small farmers. Indonesian
\nagribusiness has continued to rely upon imports to meet the
\nstrong surge in demand for quality food during the last four
\nyears. In other words, Indonesian agribusiness is passing the
\nsmall farmer by.<\/p>\n
But before the Indonesian farmer benefits from a market-driven
\nagricultural system, the constraints on the small farmer have to
\nbe broken. The farmer's produce has to meet the specifications,
\ntimeliness, and the volumes demanded by agribusiness. This
\nrequires access to credit, inputs, and technical advice --
\nresources which should be provided by the government, not by
\nagribusiness. Therefore, the Indonesian farmer will only begin to
\nbenefit from agribusiness when the agricultural bureaucracy will
\nbe able to:<\/p>\n
a) meet the farmers' demand for more sophisticated technology,
\nnot just for rice, but for livestock, fisheries and tree
\nplantations, and for the effective delivery of such technologies,
\nand,<\/p>\n
(b) fulfill the farmers' expectations that agricultural credit
\nmarkets will work reasonably, that their land will be properly
\ntilted, that agro-inputs will be available at kiosks, that rural
\nroads will be built, irrigation systems maintained and that
\ngovernment oversight will ensure that their produce manages to
\nreach the consumer's table efficiently.<\/p>\n
When will all of this come about? Not until leadership of the
\nagricultural bureaucracy -- given to rhetoric, and pontificating
\nin meetings, seminars, and conferences than working with the
\nfarmers -- starts treating the Indonesian farmer as an equal
\npartner rather than a subordinate, and champions the cause of the
\nsmall farmer against all vested interests.<\/p>\n
The fact the agricultural bureaucratic leadership has not
\nmanaged to get its act together to formulate and implement bylaws
\nprotecting the Indonesian farmer based on the Bill on Crop
\nCultivation Systems passed five years ago, is nothing short of
\nscandalous. In other words, not before this agricultural
\nbureaucracy leadership transforms itself from being part of the
\nproblem to becoming part of the solution.<\/p>",
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