Indonesia's food imports escalating

JAKARTA (JP): Indonesia could become the world's largest importer of foodstuffs by the turn of the century if the government refused to change its agriculture policies to create an enabling environment for farmers to work in the agribusiness field, an analyst has said.

Executive Director of the Center of Agriculture Policy Studies H.S Dillon argued on Thursday that Indonesia, which is blessed with rich natural resources, must improve the productivity of its farmers so that the country can feed not only its own people but also those in other countries.

"The government should focus on improving the productivity of farmers, otherwise we may become the world's largest importer of foodstuffs by early next century," he said in a seminar on Indonesian food policy in the 21st century hosted by the Center for Strategic and International Studies (CSIS).

Dillon noted that Indonesia is already one of the world's largest wheat importers, bringing in about 4.2 million tons in 1998.

The country also imported 500,000 tons of corn, 607,000 tons of soybeans, and 1.7 million tons of sugar in 1998, he said.

Indonesia claims to have been self-sufficient in rice, a staple for most Indonesians, since 1984. However, it has been importing the commodity since the early 1990s.

Prolonged drought which resulted in a sharp drop in domestic production of rice last year forced the State Logistics Agency (Bulog) to import 4.6 million tons of rice during the 1998/1999 fiscal year, a 780 percent increase over the 523,776 tons it imported during the 1997/1998 fiscal year.

Rice consumption for the country's population of more than 200 million is expected to reach over 33 million tons this year. The country is expected to produce 52 million tons of unhusked rice, or about 32 million tons of milled rice.

Dillon said that the government's past and present agriculture policies have shown that the government does not have a long-term view needed to create better policies to increase crop production.

He warned the government that the supply of foodstuffs traded on the world market is very tight, making it very difficult to rely on imports in the future.

"So we have to make all-out efforts to supply ourselves with sufficient foodstuffs."

Dillon also said that the rupiah's depreciation has presented an opportunity to increase Indonesia's share in international markets, but a number of nonmarket factors constrain its ability to capitalize on the opportunity.

The factors, he said, are poor infrastructure, inefficient land markets, underdeveloped support institutions, protection, scarcity of middle-level managers, a general lack of policy focus and poor coordination among many different agencies and arms of government.

Dillon said that most Indonesian farmers are poorly educated, making it very hard for them to increase the productivity of their crops by adopting new technologies unaided.

"Our farmers need research and extension. They need better infrastructure. They also need liquidity, not heavily-subsidized credit, but credit available when vital. The Ministry of Agriculture has to serve farmers and food producers, helping them break all constraints, technological and institutional, impinging upon them," he said. (gis)