Self-sufficiency in soybean supply likely

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."