Self-sufficiency in soybean supply likely

By Joko Sarwono

BOGOR, West Java (JP): The plunge in the value of the rupiah has forced the government to rethink its strategy of relying on imports to meet the country's ever-growing consumption of soybeans, a vital component of the national diet.

The economic crisis has led to the absence of once popular food items which use soybeans -- particularly tempeh and tofu -- from dinner tables across the country because families can no longer afford them.

In the past, tempeh and tofu were popular fares among poor Indonesians because they were considered the poor man's meat. In recent years, however, they have found their way onto the dinner tables of wealthier members of the community because of their low calorie and high nutritional content, making them superior to meat.

In short, they are inexpensive and good for you.

So important are soybeans to the national diet that it has been singled out, along with rice, for continued government subsidy. At least for the moment.

Even so, tempeh and tofu prices have soared.

At Kebon Kembang market here, a block of tempeh sells for Rp 1,000, double the precrisis price. Similarly, a cube of tofu sells for Rp 100, up from Rp 50.

Part of the problem is that Indonesia is not producing enough soybeans to keep up with demand. The prices of tempeh and tofu, therefore, are susceptible to exchange rate fluctuations.

Up until the First Five-Year Plan (1969/1974), Indonesia was still exporting an average of 36,000 tons of soybeans per year. The country began importing soybeans during the Second Five-Year Plan (1974/1979).

Imports started at an average of 30,000 tons a year in the late 1970s, and rose almost unchecked to 700,000 tons last year.

Production reached 1.6 million tons last year, but consumption is now a staggering 2.3 million tons.

The government has made self-sufficiency in soybeans one of its more immediate goals and priorities.

The task falls on the shoulders of new agriculture minister Justika S. Baharsjah, an agriculture professor from the Bogor Agriculture Institute who has conducted research on soybean farming.

Her appointment has given new hope that, this time, the government is serious in its commitment.

"The government has not been serious enough in developing the agriculture sector," Iswandi Anas of the Bogor Agriculture Institute said.

"Agriculture has always played second fiddle to the development of the industrial sector."

Agricultural research programs are mostly short-lived, lasting one or two years, and they are rarely sustained because there is not enough money, he added.

Iswandi said he has conducted field experiments in soybean farming in Jambi and found that, with proper and intensive care, yield could actually reach 2 tons per hectare.

Compare this with a national average yield of 1.1 tons per hectare from the 1.5 million hectares of soybean farms across the country, mostly in Sumatra, Java and Sulawesi.

Darman W. Arsyad, a soybean cultivator in Bogor, is more moderate in his prediction, saying that the national average yield could be increased to 1.5 tons to 1.7 tons per hectare.

This is in keeping with the 1.8 tons per hectare average yields among the world's largest soybean exporters like the United States, Brazil and Argentina, he said.

Darman said several laboratory gardens in Bogor, Yogyakarta and Malang, have reported yields of 2.5 tons to 3 tons per hectare.

The Ministry of Agriculture's Research and Development Center has produced 27 high-yielding varieties of seeds with fancy names like Orba, Kerinci, Galunggung, and Wilis.

Most of these varieties could have yields of up to 2 tons per hectare in perfect conditions and with proper care, he said.

Yields are unlikely to reach their optimal levels in Indonesia because soybeans are largely planted by small landholders using traditional farming methods.

Soybeans are largely considered a secondary crop after rice, so farmers are not too concerned about techniques and yields.

And there is the lack of price incentive.

Prices normally drop during harvesting, so farmers are not motivated to increase output, Darman said.

In contrast, in the United States, Brazil and Argentina, soybeans are planted by big farmers using fully mechanized methods, giving them a strong competitive edge.

Darman believes that had the government been as serious about soybeans as it was about rice development, Indonesia could have become self-sufficient in the commodity by now.

Bungaran Saragih, director of the Development Study Center of the Bogor Agriculture Institute, said the macroeconomic conditions before the crisis were simply not conducive to the development of the agricultural sector, including soybeans.

He said the rupiah was overvalued against the dollar so it was cheaper for people to import rather than to produce, and this included agriculture produce.

"So we've been importing soybeans, corn, wheat, fruit, milk, meat, you name it," Bungaran said.

The high interest rates have diverted funds that would have been invested in the agricultural sector, he said. Even the government's farming credit scheme was offered with an interest rate of 16 percent per annum, which is too prohibitive for farmers, he added.

The plunge in the value of the rupiah is, in a way, a blessing in disguise, at least for soybean farming, he said.

The higher prices should motivate farmers to increase yields.

"They could actually plant soybeans twice a year. If everyone does this, then we should become self-sufficient within just one or two years."

Darman, however, considers a 12-month to 24-month turnaround too ambitious and probably too costly as farmers have little knowledge about how to increase their yields.

Farmers will not necessarily benefit from the higher prices.

"The fact remains that come harvest time, prices will drop once again."

"It is more reasonable to aim for self-sufficiency in four to five years with intensive efforts, or eight years if we take it slowly."