Last month, the FAO (Food and Agriculture Organization) warned of the looming food crisis threat resulting from the COVID-19 pandemic. A policy of social restrictions and regional quarantine scheme (lockdown) has been implemented in various countries as a response to the pandemic. On the one hand, this policy successfully managed to suppress the spread of the virus, but on the other hand it has hit global food production and hampered distribution.
IO – The impact of the pandemic on the agricultural sector is indeed quite large as it covers a number of aspects, ranging from production, distribution, to consumption of food products. Regional quarantine schemes, for example, have hampered the availability of labor and food supply chains. That is why a number of countries that have been known as food producers, such as Thailand and Vietnam, for example, began to restrict exports. They prioritize maintaining their domestic consumption needs. As a result, the volume of food traded in the world market continues to decline.
Of total world rice production, for example, now only 5 percent is being traded on the international market. So, if there are countries that have problems with domestic rice production, we can be sure that imports will no longer be as easy as before. This situation can certainly be even worse if the COVID-19 pandemic is prolonged to an uncertain date.
So, after more than 300 thousand lives have been lost due to the Corona virus today, the next looming threat is the specter of hunger. In fact, the World Food Program (WFP) estimates that 265 million people in the world are now threatened with starvation as a direct impact of the COVID-19 pandemic.
Of course, we must be aware of this looming threat. Moreover, since before this pandemic emerged, Indonesia has been classified as a country with a serious hunger index. According to data released by the International Food Policy Research Institute (IFPRI) in 2019, there are still 22 million Indonesians who suffer from chronic hunger. Unsurprisingly, referring to 2019 Global Hunger Index (GHI) data, Indonesia ranks 70th out of 117 countries in the matter of hunger problems. Indonesia’s GHI score is 20.1, meaning that it has serious problems with food.
For the record, GHI uses a rating scale of 0 to 100, where 0 is the best score (no hunger) and 100 is the worst score. From this scale, there are five categories used by GHI to measure a country’s position, namely low (score <9.9), moderate (10-19.9), serious (20-34.9), worrying (35-49 , 9), and very worrying (> 50). To obtain this score, GHI used four indicators, namely (1) the level of child (under five years old) mortality, (2) the level of malnutrition in the entire population, (3) the number of stunting cases in infants, and (4) wasting, or nutritional problems, in infants.
Although, when speaking in terms of trends, Indonesia’s score has continued to improve in the last two decades, namely 25.8 (2000), increased to 26.8 (2005), and again dropping to 24.9 (2010), this country’s position is still considered quite bad in the context of countries in the Southeast Asian region. In Southeast Asia, Indonesia’s position is even worse than Myanmar. Indonesia is only better than Cambodia and Timor Leste.
The issue of Rice Field Plowing Program
FAO’s warning about the threat of food crisis has been addressed by President Joko Widodo by instructing State-Owned Enterprises, local governments, and the Ministry of Agriculture to carry out a joint operation of massive land extension by preparing new rice paddy fields. The object is 900 thousand hectares of peatlands in Central Kalimantan. The order was conveyed in a Closed Meeting on the Continuation of the Anticipation of Staple Food Needs at the Bogor Palace, last April.
During the meeting, the President also pointed out that a food deficit had been reported for the supply of rice, corn, chili, shallots, chicken eggs, sugar and garlic. For rice, supply deficits have already occurred in 7 provinces. For maize products, deficits occurred in 11 provinces, large chili in 23 provinces, onions in 1 province, chicken eggs in 22 provinces, sugar in 30 provinces, and garlic in 31 provinces.
The order to create new fields, is unfortunately not the response the public expected. The plan even gave rise to more criticism than appreciation. There are several reasons why the plan received a lot of criticism.
First, the government has not been consistent with the peatlands restoration agenda. In fact, it is an agenda that was declared by the government itself. Through Presidential Regulation (Perpres) No. 1 In 2016, President Joko Widodo has even established a Peat Restoration Agency (BRG) whose main task is to accelerate the recovery and to restore the hydrological function of peatlands previously damaged by fire and drying.
The program to create paddy fields on top of the drying peatlands is clearly in contrast with the peat restoration agenda. The program is also dangerous, because it will increase the potential for forest and land fires. Moreover, we will soon be in for a long dry season this year.
Second, the government has never learned from past failures. The rice field preparation program was actually carried out in previous years, including in the first period of President Joko Widodo’s administration. However, as we have seen, there has never been any visible result of this program.
During President Soeharto’s era, for example, Indonesia had developed a program of creating one million hectares of rice fields on top of peatlands. The result was not higher rice production, but severe environmental damage, including a bad forest fire in 1997. Likewise, the implementation of the food estate program covering 1.2 million hectares in Papua, held during President Susilo Bambang Yudhoyono’s period, also yielded zero results.
In the first period of his administration, President Joko Widodo also intended to plow 240 thousand hectares of rice fields. However, up until the end of his first term in office, the target was never successfully achieved. Instead of succeeding to increase output, our rice production actually continues to fall. For the record, rice production in 2019 was only 31.31 million tons, down 7.75 percent when compared to the rice production number in 2018, which reached 33.94 million tons. Fortunately, national rice consumption is only estimated at 29.6 million tons per year, so there was a surplus of 4.37 million tons in 2018 and 1.53 million tons in 2019.
Or merely producing show results, is because the Government has never paid attention to supporting infrastructure for the rice fields, both in terms of physical and social infrastructure, in order to produce results. Examples of physical infrastructure support, for example, include the availability of water sources and irrigation channels. So far, these things are not taken into account. A concrete example is the rice field plowing program in Hewa Village, East Flores, in 2018. The government indeed built an irrigation channel there, but there is no water source to fill it up.
How can the paddy fields produce, if the conditions are as such?
Another important thing often overlooked by the Government is that rice fields need farmers who can cultivate them. The problem is, not all people, especially outside Java, are familiar with rice farming. Thus, the rice paddy plowing program, without being accompanied by a balanced supply of new farmers, or the migration of farmers from Java, will certainly not produce any results. As a result, paddy field plowing eventually only generates new land area numbers, but delivers no excess of food production.
Third, the President’s statement that he would plow large-scale rice fields was inconsistent with the Government’s severe cut in the rice field budget. To deal with the impact of COVID-19, the Government has recently been carrying out a massive reallocation of the 2020 State Budget. One of the impacts is the rice field budget. Previously, IDR 209.8 billion was allocated for the paddy and the SID (Survey, Investigation and Design) program, with a target land area of 10 thousand hectares, but after reallocation, there was only IDR 10.8 billion left in the budget.
And fourth, paddy field-plow programs intended to anticipate a food crisis will certainly not be effective. Paddy field plowing is not the answer to the problem of the food crisis, because, even if the program is accompanied by the development of supporting infrastructure, for example, results can only be seen in the long term. The problem is that the threat of a food crisis that we should have overcomed is already in sight.
So, the rice field plowing program without farmers and without regard to agricultural culture, the very thing that is currently being echoed by the Government, will surely be a waste of budget with no visible result at all. Instead of blowing off such a budget, with the risk of failure, the Government should use the existing budget to subsidize farmers. The existence of economic stimulus and incentives will increase the enthusiasm of farmers to produce.
The Importance of Stimulus for Farmers
In Indonesia, increasing farmers’ productivity does not always go hand in hand with improving their welfare. Farmers often do not get adequate economic incentives from their business. In fact, this incentive factor is important for the continuity of food production in the future. According to the Arisoy & Bayramoglu study (2017), changes in prices of agricultural products affect product supply inventory and producers’ decisions in their production. Price instability will impact instability of agricultural product supply.
To stimulate the increase of food production, the Government can actually start by increasing economic incentives for farmers, including increasing investment in the agricultural sector. However, we haven’t seen the inclusion of such stimulus in the Government’s current political budget.
As we know, with the provision of Government Regulation to Replace Law (Perppu) No. 1 of 2020 concerning the Handling of COVID-19, the Government has allocated an additional expenditure of IDR 405.1 trillion to deal with the pandemic and the impact of the crisis. Most of the funds, or around IDR 150 trillion, are claimed to be used for financing incentives for the national economic recovery program, credit restructuring, and financing the MSME. Beyond that, the Government also allocated IDR 110 trillion for social protection programs (social safety net), and IDR 75 trillion for incentives in the health sector. Meanwhile, the remaining IDR 70.1 trillion is to go for tax incentives and KUR (People’s Business Credit) stimulus.
The composition of the additional budget allocation claimed to be allocated to overcome the Coronavirus pandemic, if closely examined, it turns out to be used more to finance economic incentives and to finance the relaxation of corporate taxes.
So, how much of the budget is allocated for farmers?
Late last month, the Coordinating Minister for the Economy said that the government would provide BLT (Direct Cash Assistance) to 2.4 million poor farmers, amounting to IDR 600 thousand. Even then, farmers would only receive IDR 300 thousand, because the rest will be given in the form of Saprotan (Agricultural Production Facility). In total, the Direct Cash Assistance budget allocation plan for farmers is only IDR 1.4 trillion, of which half will certainly go into the pockets of fertilizer, seed and other production facilities companies.
Imagine, this amount is way far below that compared to the budget allocated for 8 start-up industries involved as partners of the Workers’ Card program, whose value reaches IDR 5.6 trillion!
What’s also concerning is that in the midst of a looming food crisis threat, the Government actually continues cut the budget of the Ministry of Agriculture. During President Joko Widodo administration, the highest budget of the Ministry of Agriculture was recorded in 2015, amounting to IDR 32.72 trillion. In the years that followed, the budget was continually cut so that there remained only IDR 27.72 trillion (2016), IDR 24.23 trillion (2017), IDR 23.9 trillion (2018), and IDR 21.71 trillion (2019).
For 2020, the Ministry of Agriculture’s budget is, once again, cut to IDR 21.05 trillion. Tragically, after the pandemic surfaced, the budget was cut again by IDR 7 trillion, so that the total amount now is only IDR 14 trillion. This budget cut proves that the Government is not sensitive to the threat of a food crisis in the midst of the pandemic.
Instead of getting injections as a priority policy and budget facilities from the Government, the food sector is constantly cutting its budget!
As has been reminded by the ADB (Asia Development Bank), to overcome the food crisis and hunger, Indonesia should encourage increased investment in food security and rural areas. The aim is to push productivity, modernize the food system, and improve the efficiency of the food market.
We need to realize that the food availability of the Indonesian people has been supported by 26.125 million farm households (RTP). Thus, they are very deserving of priority in the provision of aid and economic stimulus by the government, rather than the start-up industry, or other tertiary sectors.
So, what should the Government do to face the threat of a food crisis?
Broadly speaking, there are two sides of the issue when we talk about food, the demand side and the supply side. From the demand side, the Government must encourage the diversification of food from rice and wheat to other food ingredients. Indonesia actually has a lot of food sources, both tubers and other plantation products. This pandemic should’ve been able to force us to start utilizing alternative food sources besides rice and wheat. With the diversification of food, it means that we have cut off dependency on only one food ingredient.
Meanwhile, from the supply side the Government must immediately provide incentives and production assistance for farmers. As was the case when we suffered a rice crisis in 1969, good price incentives have proven to double rice production. Provision of aid for production facilities, such as agricultural machinery, seeds, fertilizers, livestock food, veterinary medicines, and other production facilities, must be accelerated.
The recession that is now impacting us should bring us to the realization that the real backbone of our economy is actually agriculture and agro-industry. Thus, the Government’s development spending should be allocated for production infrastructure, and not for consumption infrastructure, as promoted over the past five years.
Still from the supply side, the Government needs to immediately revitalize the role of the National Logistics Agency (Bulog) again as the main chain in the supply chain of National Food Supply. The government must be able to encourage Bulog, SOEs, or ROEs, to participate in absorbing farm production and distributing it to consumers, so that farmers’ access to the market is not interrupted during quarantine and social restrictions.
Once again, besides the health sector, President Joko Widodo’s priority should be the food sector, and not other sectors. (Tarli Nugroho)
Tarli Nugroho, is a graduate of UGM, where he receive his Bachelor in Agricultural Technology and Masters degree in Agricultural Economy. He is currently Deputy Secretary General of HKTI (Indonesian Farmers Harmony Association) and a Senior researcher at Insitute of Policy Studies.