Rice field conversion an alarming trend

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Prof. Dr. Bustanul Arifin
Prof. Dr. Bustanul Arifin, UNILA professor, INDEF economist and PERHEPI general chairman.

IO – In 2021, it was reported that Indonesia’s rice-producing areas decreased by 140 thousand hectares or 2.85%, from 10.66 million hectares in 2020 to 10.52 million in 2021. This decline should be taken seriously, as it may threaten the stated national target of achieving food self-sufficiency. The paddy field expansion program (extensification) or the augmentation of new planting areas will not immediately result in higher production because developing food production centers takes time and involves numerous intricate processes. Obviously, the conversion of paddy fields into other uses has become more common, particularly in the rice-producing centers in Java, Sumatra, Bali, Sulawesi and others. 

The development of large-scale food estates outside Java, such as in Central Kalimantan, North Sumatra, East Nusa Tenggara and others, will also require a certain time frame. Changes in the ecology and production ecosystems from forest or underbrush-based land to intensive food production systems involve a process of transformation along with biophysical and socio-economic environment changes. In general, converting forest and underbrush into food-producing land requires adequate intervention and assistance. The combination of extensification and intensification strategies could contribute to the improvement of food production and optimal land productivity. 

This article discusses the phenomenon of paddy field conversion, a trend that has become more alarming because standing legal instruments or regulations seem to be useless. Thus, a course of action to develop economic incentives and improve land-use policies is also needed. 

Rice Production Performance 

After surviving tough times in 2019 and 2020, rice production performance in 2021 has rebounded to a relatively normal level, after having been disrupted by extreme drought in 2019. The following year, it suffered because of the COVID-19 pandemic, severely impacting the trade and logistics sectors around the nation. The significantly increasing production volume confirmed the recuperation of 2021 rice production, with 55.27 million tons of unhusked rice, locally known as “gabah,” produced, signifying 2.28% growth over 2020 production, at 54.65 million tons. 

In 2021, the weather and climate conditions were relatively amicable for the agriculture sector, much better compared to 2019 and 2020. Rice productivity slowly grew from 5.11 tons/ha in 2019 to 5.13 tons/ha in 2020 and 5. 26 tons/ha in 2021. Technological advancements, particularly the use of high-yielding varieties, certified seeds and a rice production intensification strategy, have contributed to 2021 rice production performance. Rice production is expected to improve further in 2022, provided that production incentive systems and fertilizer subsidies, including changing the subsidy design into direct subsidies to farmers, become more effective. 

Statistics Indonesia (BPS) regularly publishes the size of rice-producing and rice-harvesting areas, using an area sampling frame (ASF) method. This method combines spatial and digital technology, using an Android-based cellular phone connected to the BPS server in Jakarta. BPS field officers will send estimates of production areas in real-time via image recordings from cell phones, which makes it possible to process rice production data more quickly and accurately. The ASF method is widely used in developed countries such as the United States, Japan, the European Union and others. 

Legal instruments for preventing paddy field conversion were enacted a long time ago, but their effectiveness needs immediate strengthening. Law No. 41 of 2009 on the Protection of Sustainable Food Agricultural Land has been in effect for more than a decade. Its four derivative regulations are Government Regulation (PP) No. 1/2011 on Designation and Transfer of Functions of Sustainable Food Agricultural Land, PP No. 12/2012 on Incentives for Protection of Sustainable Food Agricultural Land, PP No. 25/2012 on Information Systems for Sustainable Food Agricultural Land, PP No. 30/2012 on Financing of Sustainable Food Agricultural Land Protection. However, the enforcement of those laws has been ineffective, because it is closely related to formulating land-use policies and planning and spatiality at the regional level, where it involves various agencies and many parts of the community. 

The Economic Policy Instruments 

Law enforcement on its own will not suffice to prevent or reduce paddy field conversion. Other approaches, such as developing economic incentives, improving price policies, enhancing production technology, improving infrastructure, governance and irrigation systems, and establishing land-use policies are also urgently needed. 

The food security and price stabilization policies, for example, have to be maintained, and their implementation needs to be improved. Rice price stabilization has been quite promising, from Rp11,800/kg in January 2021 to Rp11,750 in January 2022. Improvements in productivity performance and stock management seem to be quite effective in suppressing price surges in big cities or areas outside rice production centers. One of the impacts of stabilized rice prices is the increase in rice consumption, by up to 2.14% per year. This increment, however, interferes with the process of consumption diversification, a balanced diet, consumption of vegetables and fruit, as well as protein and vitamins, which are fundamental for food security. 

Incentives for assisting farmers in using certified superior seeds and water resource management are also quite effective in improving the quality of rice production, thereby preventing the risk of plummeting unhusked rice prices at the farmer level. In 2021, the unhusked rice price at the farmer level was relatively high, above the government purchase price of Rp 4,200/ kg. However, cases of prices intended for low-quality unhusked rice were still found in several places, although not too massively. This was because the unhusked rice was harvested during the rainy season, so the moisture content was too high. 

In short, law enforcement to prevent paddy fields conversion needs to be improved, together with developing economic incentives, assisting farmers in using superior seeds and fertilizers appropriately, accessing information, financing and much more. Local governments could also put land and building tax relief on the table as an incentive for food farmers who can reduce the rate of paddy field conversion.