Focus on farmer income

The blueprint the government is finalizing for the revitalization of agriculture, including fisheries and forestry, is raising new hope that this time the government is really serious about redesigning its agricultural policy to become an integrated development concept.

Yet more encouraging is that the government seems to fully understand what integrated development is really about, as can be noted from the involvement of more than a dozen ministers in the designing of the blueprint, under the coordination of the chief economics minister, Aburizal Bakrie.

Different from past agricultural development policies that were very much piecemeal, the new integrated five-year policy is being designed to address all of the problems that directly and indirectly affect the sector.

But details of the blueprint were not immediately available at Aburizal's news conference last week, and, as the adage goes, the devil is in the detail.

The concept is essentially embodied in the broad objectives of empowering the farm economy and rural communities through the development of rural and farm infrastructure. This is strategic, as more than 60 percent of the total population still make their living from farming.

However, the implementation of this concept sorely requires ministerial coordination, and also cooperation with local administrations in mobilizing resources into such basic infrastructure as roads, market places, transportation, processing facilities, rural financial networks and farm research stations.

Farmers' access to basic services and markets has sharply deteriorated as an acute lack of maintenance since 1998 has left most rural road networks in poor condition. Better access to markets is vital, and not only because much farm produce is highly perishable. Smooth transport also facilitates linkages between farm and off-farm activities and between rural and urban areas and stimulates the development of small and middle-scale businesses.

As the primary objective of the blueprint is to empower farmers, the focus should be on farmers' income. This in turn requires a balancing act of securing food security and at the same time ensuring a steady rise in farmers' earnings.

Overemphasis on staple crops such as rice, soybean, sugar, corn doesn't provide much room for additional employment and income growth because productivity gains in these food crops have diminished, especially in Java where most farmers have less than half a hectare of land.

Farmers therefore need to shift to higher-value crops such as horticulture and other cash/industrial crops, fisheries and livestock, but these farming concepts require inter-ministerial cooperation to develop infrastructure, marketing and processing facilities, cooperatives, farmer organizations and other instruments of trade facilitation.

Significant improvement is needed in research capacity to develop high-yield strains, and more capable institutional extension services should be established to adapt technology to local farm conditions and disseminate it to farmers.

According to the World Bank, research accounts for only about 4 percent of total government expenditure on agriculture, as compared to more than 10 percent in Thailand and Malaysia.

Extension services, however, need to be decentralized as national 'standard package' extension services cannot be applied to the widely varying farm conditions in the various provinces. However, as severely-limited resources make it impossible for the government to provide such extension services, the business climate should be made conducive for investment in the propagation of high-yield seedlings. Since the marketing of seedlings or strains requires technical support, investors will also have a great interest in themselves providing technical extension services to farmers.

The new concept of agricultural development also requires the ministry of agriculture to redefine its role, especially since most state budget appropriations for agriculture have been put under the management of local administrations since the implementation of local autonomy in 2001.

The ministry of agriculture should focus its attention and resources on facilitation and on the enforcement of national standards for farm produce and for such inputs as seedlings, varieties and pesticides which affect farm productivity.