Experts urge government to create pro-farmer policy

Adianto P. Simamora, The Jakarta Post, Jakarta

The government's program of expanding the country's acreage of paddy fields to raise rice output and reduce reliance on imports will not be effective unless it is coupled with a pro-farmer policy aimed at raising farmers' incomes and thus encouraging them to plant rice, experts said over the weekend.

"Opening new paddy fields is not the only solution for solving our rice problem. The most important thing for the government to do now is reform the agriculture policy in order to give more benefits to farmers," noted agricultural expert H.S. Dillon, who is also head of the Center for Agricultural Policy Studies, told The Jakarta Post.

Earlier, the Ministry of Agriculture said it had launched a program to expand the country's paddy fields by 100,000 hectares per year over the next eight years in order to prevent the possibility of a rice crisis by the end of the decade.

Achmad Suryana, head of the ministry's Community Development and Food Security Agency, warned that without the program, the country's rice shortage could, by the end of this decade, soar to a level that even imports could not cover.

The program had been presented during a Cabinet meeting but thus far no decision on it had been made.

Dillon said the program was actually not new.

"The ministry launched a similar program some years ago, which was funded by the state budget. Unfortunately, the program failed and until today, there has been no accounts presented over the use of the funds," Dillion said.

Dillon noted that unless farmers see the prospect of better earnings, they would not be interested in planting rice in the new fields.

In order to increase farmers' earnings, he said, the government needed to ensure price stability and help increase land productivity.

"The present price of Rp 1.500 (about 16 U.S. cents) per kilogram set by the government for unhusked rice is not acceptable. It should be reviewed to take account of rising production costs, including fertilizer and pesticide costs," he said.

The government price is the floor price for procurements by the State Logistics Agency (Bulog).

An official of the Ministry of Agriculture, who wished to remain anonymous, explained that rice production costs stood at Rp 800 per kilogram.

Based on the government's price of Rp 1,500 per kilogram for unhusked rice, a small farming family in Java, which typically has 0.3 hectares of paddy fields, can still earn Rp 700 per kilogram. With an annual production of three tons of unhusked rice, the farmer gains a total profit of Rp 1.8 million per year, the official said

Ibrahim Warsinta, a farmer in Karanganyar village, Cirebon district, West Java, dismissed this calculation as failing to reflect reality. He told the Post that farmers' incomes were much lower due to price instability.

He said farmers were happy about the government's price provided that it was stable. In fact, during harvest season, they could only sell their produce at a price of Rp 800 per kilogram to traders, because Bulog refused, or had no money, to buy it from the farmers.

Some analysts blame corrupt Bulog officials, who collude with traders, for deliberately suspending purchases during the harvest season so as to depress prices.

Indonesia achieved self-sufficiency in rice production in 1984, for which then president Soeharto received an award from the United Nation's Food and Agricultural Organization.

However, the country's rice production has since continuously declined, forcing Indonesia to import millions of tons of rice every year.

Rizal Ramli, former coordinating minister of the economy, welcomed the paddy field expansion program as it would raise the country's rice output and lower its dependence on imports.

He noted, however, that the government should prioritize raising the productivity of existing paddy fields.

"Our paddy field productivity is still very low at about 4.2 tons per hectare compared with other countries where productivity reaches up to 7 tons per hectare," Rizal told the Post.

He said that in order to boost productivity, the government should help local farmers by providing good fertilizer and seeds.

"If the land productivity increases, farmers will receive higher incomes and will be encouraged to continue planting rice," Rizal, who is also a former Bulog chairman, said.

Rizal recommended that the government approve the paddy field expansion program and finance it.

The Ministry of Agriculture refused to reveal the total funding needed for the program but data from the Indonesian Farmers' Association (HKTI) says that the cost of opening up one hectare of paddy field is between Rp 4 million and Rp 12 million. This means the ministry would need between Rp 400 billion and Rp 1.2 trillion to open 100,000 hectares of land per year.

Sri Adiningsih, an economist from Gadjah Mada University, laid her weight behind the paddy field expansion program, but she urged the government to involve the private sector in carrying it out.

"The program is okay but the government would be wise to collaborate with the private sector in realizing the program," Sri told the Post.

Indonesian paddy field productivity ---------------------------------------------------------------------- Year Production Harvest Area Productivity % Growth

(million tons) (million ha) (ton/ha) ---------------------------------------------------------------------- 1990 45.2 10.5 4.3 1995 49.7 11.5 4.3 1996 51.1 11.5 4.2 1.5 1997 49.3 11.1 4.4 0.3 1998 49.2 11.7 4.2 5.3 1999 50.0 11.9 4.2 1.3 2000 51.9 11.7 4.4 3.5 2001* 50.0 11.4 4.3 0.1 ----------------------------------------------------------------------

* Projected

Source : Central Statistics Bureau (BPS)