Corporate farming concept not feasible

Corporate farming concept not feasible

Minister of Agriculture M. Prakosa is designing a corporate
farming concept, under which small farm areas will be
consolidated into corporate farming units. H.S. Dillon, director
of the Institute for Agricultural Policy Studies, thinks the plan
will not work.

Question: Do you think the government's plan for corporate
farming is feasible for Indonesia?

Dillon: No. Prakosa's concept is not based on the thorough
knowledge of the reality of our people and their aspiration of
value systems. The reality is that about 11 million of our
farmers have no land and that about 80 percent to 85 percent of
people living in rural areas have attended schools for only up to
six years. Furthermore, such an idea, which was implemented in
Europe after World War II, has been left behind by two
generations. He must have read outdated textbooks and his way of
thinking is too focused on farming organization.

If implemented next year as planned, what consequences may
result from the concept?

It may cause farm labor layoffs and concentrated urbanization.
Yes, urbanization is an unavoidable process and we cannot fight
it, but what we want is dispersed urbanization which can be
obtained by providing economic incentives, creating adequate
infrastructures and decentralizing power through the
strengthening of a civil society in the regions.

The concept is likely to create projects in which farmers will
have to take part. Do you think its implementation will encourage
abuse?

Such a project-oriented concept is contradictory to the
nation's current paradigm shift, under which we want to have less
government involvement, while activities must be determined by
the civil society.

How could a minister make such an unrealistic plan?

Because he does not know how to frame questions. If he cannot
frame a question (on agricultural development), he will get the
wrong answer.

That is the fault of Coordinating Minister for the Economy,
Finance and Industry Kwik Kian Gie and Vice President Megawati
Soekarnoputri, who promoted him to become a minister. But the
fact that President Abdurrahman Wahid approved the promotion
indicates that they are all not well-informed.

What is the right question then?

The right question is how can we build a sustainable future
for our country. Because the majority of our people are still
dependent on agriculture, we must enhance our agricultural
productivity, but not agricultural productivity per se.

Through our history of agriculture, we have increased
productivity, but its benefits have been seized by consumers
because the real prices of food have steadily decreased for
decades.

Any proposed increase in agricultural productivity, therefore,
must be closely related to increases in farmers' income and
payments for farm laborers. The technology to be adopted, for
example, must have linkages with employment. So our focus of
attention in developing agriculture is not on agriculture itself
but the farmers.

Then how do you prescribe your own proposal?

What is the most strategic is that we must create incentives,
so that everyone in rural areas feels invigorated to continue
increasing his/her productivity. We must give him/her
opportunities to improve his/her own ability.

Can you give us examples of your proposed incentives?

We must provide adequate physical infrastructures, such as
roads, bridges and electricity for villages, not only on Java but
also on other islands in the country. We can also establish a
working rural capital market as an institution to mobilize funds
for agricultural development. Everyone in rural areas who needs
capital to enhance himself/herself, must be given access to
obtain credit from it. Such credit should no longer be tied to
any certain scheme or commodity development. State Bank Rakyat
Indonesia, which has offices in rural areas, has thus far
mobilized funds from villages but the investments are mostly not
for rural development. So the bank is actually extracting capital
from rural areas.

We must also take measures to enhance the quality of rural
education. We, for instance, can establish universities on
coastal areas, highlands and lowlands with locally specific
curricula, giving adequate recognition to differences of
agricultural-economic circumstance.

What makes it possible for the government to introduce such
incentives?

The government must have a solid economic team whose members
will respect each other. The Ministry of Agriculture, the
Ministry of Forestry and Plantations, the State Logistics Agency
(Bulog) and the organization responsible for the development of
the agro-industry must be merged into one simple, leaner, more
effective and more accountable institution under the management
of one minister. We cannot start seriously enhancing agricultural
productivity and providing food security for our people unless we
have coherent policies related to agriculture, forestry, agro-
industry and foodstuff logistics.

If that is the case, should we wait for another four years
when the current government ends its term?

Not necessary. We hope Abdurrahman will reshuffle his Cabinet
in August and will recruit some members of the National Economic
Council (DEN -- to which Dillon also belongs). (Rikza Abdullah)