13 Juli 2010

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Setting the foundations for food safety policies

With a population of about 240 million people, Indonesia continues to face major challenges in providing food security. For the past 40 years, the country has strived in efforts to create and achieve food resilience. For a country as vast and diverse as Indonesia, food security must be realized not only at the national level, but also at the local, household and individual levels.
Let us first look at the positive achievements. Currently, staple food crop production in Indonesia is progressing positively.  Rice and corn productions have already achieved self sufficiency.
The country’s current annual rice production is around 64 million tons per-year with annual growth of approximately 3.2 percent, while the corn production is around 18 million tons per year, with annual growth of approximately 10 percent.

In 2014 Indonesia has the ambition to achieve self-sufficiency in soy beans, with approximately one million tons of production; of sugar, with the production of 2.9 million tons; and of meat, with the production of 0.4 million tons.
With the deadline for the Millennium Development Goals (MDGs) only five years away, the government has laid out four major agricultural targets.
 First is the continuation of self-sufficiency on major food crops production; second, food diversification; third, improve value-added production, increase competitiveness and enhance exports; fourth, increase the farmers’ standards of living.
There are at least four key foundations to achieve these goals:
 First is lowering food prices for consumer across-the-board.  This has been done by policies that promote the lowering or elimination of existing trade barriers.
In addition to help the poor, the government has introduced various subsidies for low quality foodstuffs in the poorest regions in Indonesia.
Greater food consumption and increased purchasing power have contributed to the average Indonesian per capita food availability growing from 1,726 calories per capita per day in 1961 to 2,890 calories in 2003 (FAO, 2009).
Second foundation is production. Agronomists have argued that increasing domestic production does not always increase food security, unless food prices are kept down and measures (policies) are in place to make such production economically efficient.
This may be the case for more highly developed states. But for Indonesia pumping production to the maximum levels is still a viable policy.
However, to make such a policy politically acceptable, it should be followed up by efforts to improve the efficiency of productions processes.  We have also seen that subsidies for farmers, even though relatively economically inefficient, have been able to lower and keep stable food prices.
For Indonesia, growth in the agricultural sector coincided with the “Green Revolution” as seed and fertilizer technologies and substantial government subsidies allowed increased production through crop intensification.
The government prudent policies, mostly learning from the 1998 financial crisis has resulted in an overall economic growth for the past ten years.
Other macroeconomic policies such as trade deregulations and fiscal and monetary balances have attributed to the success of economic growth and more importantly poverty alleviation.
The last foundation is more trade-related.  With an open-and-close policy, the government has been able to control imports on one hand and giving wider consumer choice on the other hand.  This has also allowed for the lowering of food costs for the general population. Trade liberalizing policies and currency devaluation promoted a greater market-oriented economy and allowed Indonesia’s tropical perennial crops to assert their comparative advantage
Even with such a strong foundation, problems remain. A huge population, climate change, land reform, and environmental degradation are just a few to mention.
Indonesia has recorded one of the fastest agricultural transformations in history, trailing only South Korea and Turkey, in shedding 27 percent of agriculture’s share of GDP in 35 years (World Bank, 2008).
Incentives induced through the market reorientation of the mid-1980s and the currency devaluation and market liberalizing policies after the Asian financial crisis may have been the main productivity driver.
With greater income, Indonesians are increasingly urbanized and gains have been made in improving their food security. Looking at the policies Indonesia has put in place, it is a lesson learned that one can come out of poverty and achieve growth with resilient policies.

The writer is secretary to Coordinating Public Welfare Minister. The opinions expressed are personal.

Opini The Jakarta Pos 14 Juli 2010