Govt claims farming sector fully recovered

Zakki P. Hakim and Johannes Simbolon, The Jakarta Post, Jakarta

Despite the lingering effects of the economic crisis, the nation's farming industry has grown over the past four years at a faster rate than during the previous decade's economic boom, according to a senior government official.

The farming sector, which includes agricultural and livestock industries, grew at an average of 1.83 percent annually from 2000 to 2003. During the period from 1993 to 1997, when Indonesia was at the peak of its economic development, the sector grew an average of 1.57 percent annually.

The sector contracted 0.74 percent at the peak of the economic crisis in 1998, before recovering slightly to record growth of 0.88 percent in 1999.

"The farming sector has escaped the trap of the 'low growth spiral' that occurred in 1998 and 1999.

"As of 2003, with an annual growth of about 2.62 percent, the farming sector is in the phase of accelerating growth, which is a transition to the (phase of) sustained growth," Minister of Agriculture Bungaran Saragih said last week during a discussion with The Jakarta Post.

The food crop subsector grew by an average of 0.58 percent annually from 2000 to 2003, compared to 0.13 percent growth during the 1993 to 1997 pre-economic crisis period.

The plantation subsector recorded 5.02 percent average annual growth from 2000 to 2003, compared to 4.30 percent during the 1993 to 1997 period.

Of all the subsectors in the farming industry, only the livestock subsector recorded lower growth over the past four years compared to the pre-economic crisis period. This subsector grew at an average of 3.13 percent annually from 2000 to 2003, compared to 5.01 percent from 1993 to 1997.

Rice farming, in particular, has recorded impressive growth over the past four years, to the point where Indonesia, one of the world's largest rice importers until recently, has achieved rice self-sufficiency this year and might even export some of its output.

The last time Indonesia reached self-sufficiency in rice was in 1984.

Bungaran said the multidimensional crisis sparked by the monetary crisis in 1997 pushed the country's poverty incidence to 26 percent, or 32 million people, in rural areas, and 22 percent, or almost 18 million people, in urban areas in 1998. In 2002, the poverty rate had dropped to 21.1 percent, or 25 million people, in rural areas, and 14.5 percent, or 13 million people, in urban areas.

The drop in poverty was credited in part to growth in the farming sector, particular the food crop subsector, Bungaran said.

Bungaran has proposed a new five-point, five-year program to maintain and improve the growth in the farming industry. This program would include: renovating and developing infrastructure, especially irrigation, transportation, telecommunications and electricity systems in rural areas; revitalizing agricultural systems; developing institutions to promote agribusinesses; reconstructing investment policy for production and investment; and managing the import and export market.

Bayu Krisnamurthi, director of the Center for Development Studies at the Bogor Institute of Agriculture, said it was too soon to call the ministry's programs a success because population growth was still outstripping growth in the food crop subsector.

"There is a reasonable improvement in agriculture, but population growth is still higher than food crop growth," he said.

Population growth stands at 1.48 percent, while food crop growth is 0.58 percent. Rice has a growth rate of 0.98 percent.

"This means that we are seeing a trend of declining food supplies," Bayu said.