Sat, 28 Jun 2003

Siswono Yudo Husodo Chairman Indonesian Farmers Association (HKTI) Jakarta

Food, as an essential commodity, must be made available in sufficient quantities and good quality, as well as being safe for consumption and widely accessible at an affordable price.

Apart from rice, Indonesia's annual consumption of other food products remains low on a per capita basis. The consumption of non-rice food may increase along with educational improvement, better knowledge of nutrients, welfare promotion and increased population (a present 1.6 percent a year).

Without proper handling of the vast domestic food market, which should serve to strengthen the country's agricultural sector, foreign food producers will reap the most benefits of all.

Currently, to supply food to 210 million people, Indonesia has to import rice totaling two million tons (the largest in the world, as it represents 9 percent of national consumption). Other imported items include sugar, reaching 1.5 million tons (the 2nd largest, or 40 percent of national consumption), corn over 1 million tons, soybeans 1.3 million tons (the largest for human food, at 45 percent of national consumption), wheat 4.5 million tons and beef equivalent to 450,000 cattle head (24 percent of national consumption).

Food imports are driven, first, by a very large domestic need, second, low prices on the international market, third, insufficient domestic production and fourth, import facilities from producing countries.

The low international market prices result from the presence of residual goods like chicken legs from the United States and other animal by-products from Australia. Surplus yields from producing countries are also sold overseas to maintain their high domestic prices, like sugar from Australia and India, rice from Thailand and Vietnam, tobacco from China, oranges from China and Taiwan, etc.

If food prices on the world market become lower (as a result of massive inflow of residual goods) the developing countries will depend more on imported food. Low-priced agricultural commodities serve as a disincentive to production increase. The available instrument permitted by regulations of the World Trade Organization to hamper the import is the import duty tariff.

Our ability in agriculture to meet our food needs is decreasing tremendously given growing dependence on supply from abroad. The vast domestic food market is being eyed enviously by overseas food producers who do not want Indonesia to be independent in food supply.

Without careful planning and consistent strategic steps to enhance food production, Indonesia will continue to be a major net importer of food in ever-increasing quantities, which in turn will threaten our national pride in our ability to persevere.

In view of our large population, extensive amount of agricultural land with adequate an supply of workers and the huge amount of foreign exchange required to import food, while our foreign exchange reserves are very limited, we must meet our food needs independently in a relatively short time. This should become a political decision.

Good planning and appropriate steps are required to meet the great demand for production increase. Improved education and better welfare will raise Indonesians' demand for more nutritious, more hygienic, tastier and safer food.

Apart from efforts to achieve independence in staple food supply, cattle breeding and fisheries also require basic changes, especially to enhance the economic scales of farm businesses to improve their welfare. Improving the welfare farmers and cattle breeders is a must if we want to make their products highly competitive, while farmers need larger land plots per household.

The shrinking acreage for farm businesses and the rising number of petty farmers with limited plots form a significant obstacle to productivity promotion and quality enhancement of agricultural products, not to mention the welfare of farmers.

Continuous land fragmentation will impoverish farmers and cattle breeders and also render their products uncompetitive in terms of quality and price.

Meanwhile, large and relatively wealthy provinces such as East Kalimantan, West Kalimantan, Central Kalimantan, Papua, Jambi, Riau and South Sumatra can develop their own agricultural and cattle breeding activities, which are owned by farmers using modern mechanization techniques.

The low food price policy has, for a long time, adversely affected farmers and created low wages, and has been cited as a hidden cost of subsidy for the industrial sector at the expense of agriculture.

Food sustainability that depends too much on one commodity, namely rice, has the risk of causing vulnerability to household and national food sustainability.

So, we need to develop and promote alternative staples, such as legumes, breadfruit, sago and other grains (corn, sorghum etc.), which can be processed into flour and enriched with vitamins and minerals. The seedling industry must also be strengthened. This is true as well of its supporting industries, namely those of agricultural implements and machines as well as fertilizers and pesticides.

The policies required if agriculture is to survive against foreign competition in this borderless world are thus proposed as follows:

1. Expanding the total area of agriculture, especially on dry land yet to be researched, by at least about 120,000 hectares/year, of which 40,000 hectares are meant as a substitute for land changing its designation into non-agricultural functions.

2. Increasing the land area for cattle breeding and fishery businesses from the average of 0.3 hectares per family in Java and 0.8 hectare per family nationwide in 2001, to an average of 3 hectares per family in Java and 6 hectares in Indonesia in 2030, combined with the development of capital-intensive mechanization.

3. Allocating an adequate budget to agricultural infrastructure development, especially irrigation facilities and roads.

4. Reducing farmers' total number both in percentage of the work force and its nominal figures from 48 percent in 2001 (22.5 million) to 15 percent in 2030 (15 million). This can happen if economic growth is high enough and their employment is well planned and prepared.

5. Adopting a policy that may improve the domestic prices of agricultural products, including through the import duty tariff to provide an incentive for production increase.

6. Determining targets of self sufficiency for rice in 2006, sugar in 2012, beef in 2010 and milk in 2015 by boosting production through intensification, expansion, technological improvement (including genetic engineering) and food diversification.

7. Setting the goal to become a net exporter of food by 2010, by adopting the latest technology.

8. Developing high quality agricultural and food industries, which are efficient and highly competitive from the upstream to the downstream, as well as agro-industries in villages.

9. Developing local products for food diversification.