INDEF: National Food Agency is not The Answer to Agricultural Development

INDEF: National Food Agency is not The Answer to Agricultural Development

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INDEF: National Food Agency is not The Answer to Agricultural Development
Indonesia’s agricultural sector faces daunting challenges (Photo: IO/Rayi Gigih)

Jakarta, IO – In 2020, the agricultural sector in Indonesia grew 1.8%, higher than that of other countries, such as Singapore, Timor Leste, South Korea, Thailand, Sri Lanka, Malaysia or the Philippines, but still below Vietnam (2.7%) and Brunei Darussalam (11.7%). It was the second-largest contributor to GDP after manufacturing.

However, INDEF program director Esther Sri Astuti said there are still many challenges facing Indonesia’s agricultural sector development.

“The contribution of this sector is significant but the added value of key commodities such as coffee, palm oil and cocoa is still relatively small. In addition, its growth remained relatively low from year to year, and imports of basic food commodities such as rice, sugar and soybeans are still ongoing,” she explained at an INDEF-led discussion on Monday (30/8).

To spur development of the agricultural sector, the government recently established the National Food Agency (BPN), as mandated by the Job Creation Law. The agency answers directly to the President, and is responsible to ensure the availability and affordability of basic foodstuffs such as rice, corn, soybeans, sugar, onions, eggs, meat, and chili; and manage food imports.

However, Esther said that BPN is not the solution to the issue at hand. “It won’t be effective if some of the authorities still rest with technical ministries. It is better to optimize those ministries that deal directly with the agricultural sector,” she argued.

In her view, the problems plaguing the agricultural sector today are not only related to diminishing agricultural land, but also low productivity, low wages, farmers’ limited access to bank financing, and the dependence on middlemen (tengkulak). These problems should have been addressed by the relevant ministries and agencies.

Senior economist Faisal Basri also argued that a new agency like BPN is not necessary if relevant ministries and agencies did their job well. “What is happening now is that there is sectoral egos and conflicts of interest among the ministries and agencies in the agricultural sector, even in the founding of BPN itself. These interests also stem from political parties. This is what makes it so complicated,” he said.

Meanwhile, Rector of Bogor Institute of Agriculture (IPB) Arif Satria said he is hopeful that the establishment of BPN can break the impasse in the food sector. However, he added, how effective the agency will be in carrying out its duties will largely dependent on who is at the helm. A progressive leadership figure who can bring BPN into a world class institution is vitally needed, he said.

“In developed countries, it is the system that they build. So it doesn’t matter whether the prime minister or cabinet changes, the system will continue to run. On the contrary, in Indonesia, we tend to rely on top leadership figures to move the organization, not the system itself,” he complained. (Ekawati)