Government should give incentives to farmers
The food situation appears to be deteriorating even further, with increasing reports of farmers invading plantations and golf courses all over Java to grow their own food. At the same time, the number of poor has increased manifold. In an interview with The Jakarta Post, H.S. Dillon, a Cornell-trained agricultural economist and executive director of the Center for Agricultural Policy Analysis, provides an insight into the forces shaping these events.
Question: Why have farmers staked out land belonging to plantations and golf courses, and why are they force-harvesting coffee plantations?
Dillon: This is a national tragedy, that so many law-abiding citizens are being forced into doing such things. Many factors are at play, but one thing is sure: they are doing this out of sheer desperation.
In many instances, they were forcibly evicted off these lands. In other cases, such as throngs walking away with shrimp harvests, they feel the rich are not sharing their wealth with those in dire need.
The recent riots, where the government appeared to allow gangs of marauders, rapists and arsonists a free hand, have not done much to reinforce respect for law and order among the general public.
Reverse migration has also seen a great number of landless return to the countryside. They seem to have exhausted their meager savings and are now forced to eke out a living one way or another. It would be irresponsible for us to condemn them, without providing viable alternatives.
Q: Does this mean that you condone these illegal actions?
D: I do not condone them, I deeply regret them. However, this crisis is exposing all the faults of the Soeharto regime, and it would serve us well to properly identify the underlying causes before offering any prescriptions.
People see plantation managers living ostentatiously, while farmers -- and plantation laborers -- work hard just to survive. No wonder plantation laborers have also reportedly joined farmers staking out plantations.
They have seen government officials -- the district heads, heads of local agrarian offices, and the like -- backed by security personnel, dispossess their neighbors. Such officials have invariably lined up with corporate interests.
We should not be surprised that such pent-up frustrations, a sense of sheer helplessness in the face of gross injustice, gave vent to these actions. Especially now that the farmers have learned that the state minister of the empowerment of state enterprises plans to sell off the state plantations.
Q: What would you suggest the government do?
D: It should recognize that bad policies have led to this. The government, and also our development experts, should carefully study the agriculture development/poverty alleviation/economic growth nexus.
In the short term, every incentive should be provided to farmers. For a start, the government should abandon all planned sales of plantations. Instead, it should parcel out 60 percent of all plantation land and distribute it to the plantation laborers.
The laborers would not be getting all that land for free though -- they could definitely pay the rates at which former minister of agriculture Sjarifuddin Baharsjah handed out plantation land for real-estate speculation to his cronies during his five-year term.
We have seen former plantation laborers in Labuhan Batu, North Sumatra, pay off their World Bank loans ahead of schedule. Such a move would quickly increase food supply on Java, and provide a livelihood for hundreds of thousands.
Q: What do you think of the massive food subsidies?
D: Provision of rice to those facing food insecurities is a must. They have been reduced to such straits by corrupt government officials and rapacious businessmen who continue to enjoy their spoils unperturbed.
Now that the official figure for those living beneath the poverty line has reached 80 million, subsidies are required to stave off the threat of extreme deprivation and food riots.
However, price subsidies should be replaced by effective targeting as soon as possible. Furthermore, not all essential commodities need to be subsidized. What is most fundamental is creating an environment conducive to reinvestment.
It is high time that emphasis be placed on kick-starting the recovery process. During economic crises, real prices of nontradables rise the slowest. The major nontradables are land and labor, thus, it follows that the most reasonable area of expansion would be that which employed abundant land and labor. This again points to agriculture, even with very high real interest rates.
Q: Could you elaborate further?
D: Certainly. This is a theme I have been harping on about for a long time. The rupiah's depreciation presents an opportunity to increase our share in international markets, but a number of nonmarket factors constrain our ability to capitalize on this opportunity. These factors which continue to impinge upon Indonesian agroindustrial growth range from the very basic availability of planting material all the way to export regulations.
They are poor infrastructure, inefficient land markets, underdeveloped supporting institutions, protection, scarcity of middle-level managers, and a general lack of policy focus and poor coordination among many different agencies and arms of government.
It would serve the current administration well to focus on rectifying these shortcomings. I am confident that with greater access to market information, commercial credit, and appropriate technology, more than a million small agroindustries will take off.
You must surely have seen reports of the windfall being enjoyed by our cocoa farmers, and those cultivating coffee and spices, mostly off-Java. Government policy under the previous regime discriminated against these farmers.
Their superior performance can be summed up as a market-led response by an unfettered private sector. This episode confirms my suspicion that if government was to get out of their hair, the farmers would be able to launch a very strong response by increasing their productivity.
Q: What do you think of the moves undertaken by the current Minister of Agriculture Soleh Solahuddin?
D: He has done well compared to his predecessors, but he still has a long way to go. He has told his bureaucrats to come clean, and provide him with correct data. But he still has hosts of sycophants around, the self-same officials who encouraged Sjarifuddin Baharsjah to enrich himself and his cronies from sales of plantations and crude palm oil.
They are those responsible, at least in part, for Baharsjah's claims to have been generating an annual rice surplus, while we have actually been relying on imports to feed ourselves.
These officials are still up to their old ways: they are pushing him to fight to retain control over the Directorate General of Plantations. Not because they have any plans to increase smallholder productivity, but more to be able to serve on the boards of government plantations and continue to garner rents.
Q: What advice would you render the Minister now?
D: To continue pushing his plans to increase production and productivity of rice, maize, and soybeans. He should inculcate meritocracy into the system, and dispense with the corrupt and inefficient officials around.
He should also keep an arm's length away from agribusiness interests touting specific fertilizers and pesticides. In brief, he should not fall into the same traps which ensnared those who served as agriculture minister before him.