The Mystery of declining rice productivity

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Prof. Dr. Bustanul Arifin UNILA Professor, and INDEF Senior Economist

IO – Anticipating the food crisis through strengthening domestic rice stocks is not an option, but a necessity that must be done for the remainder of the 2020 calendar year. Domestic rice stocks can reach a tipping point at the end of the year. 

The decline in rice production performance in the period 2018-2019 is quite alarming because it is feared to continue until 2020. Using a new method of the sampling area, Indonesia Statistics reported that the rice harvested area fell 6.15 percent, from 11.28 million hectares to 10.68 million hectares. 

The massive conversion of paddy fields, especially in rice production centers, such as the north coast of Java, has significantly reduced the area of paddy fields. Rice production dropped drastically: 7.76 percent, from 59.18 million tons of dry milled rice (GKG) (equivalent to 33.94 million tons of rice) in 2018 to 51.33 million tons of GKG (equivalent to 31.29 million tons of rice) in 2019. So paddy productivity fell 7.60 percent, from 5.20 tons per ha to only 4.81 tons per ha, a serious phenomenon that needs adequate attention. 

President Jokowi repeatedly told his ministers that the World Food and Agriculture Organization (FAO) food crisis warning should not be taken lightly. The problem is access to food (demand side) because many people lost their jobs and purchasing power decreased; this should not be compounded with the problem of availability and production of food (supply-side). 

Rice production in January-May 2020 is recorded at 26.18 million tons of MPD because the harvest season has finished. June rice production is usually smaller than May because farmers prepare for the next planting season. The decline in rice productivity can occur in three dimensions, namely, the theoretical, analytical-methodological substance, and the empirical dimension of agricultural economic policy. 

Productivity Theory 

Theoretically, productivity is measured using the ratio of production or output to input units. For example, land productivity is agricultural production divided by land area, using the size of tons per hectare. Labor productivity is agricultural production divided by labor units, using the size of tons per workforce. 

In the classic literature of agricultural development, Yujiro Hayami (Japan) and Vernon Ruttan (US) build a productivity identity and relate it to the level of development of a nation. Agricultural development can be said to be successful if it can alleviate society from poverty, increase income or labor productivity. 

Meanwhile, the ratio of land to labor is getting smaller because labor continues to grow, while the land area is almost constant. The implication is that efforts to increase land productivity must continue to be greater than the reduction in the ratio of land to labor Agricultural development requires a technological change to increase production, as well as land productivity and labor productivity. The innovation of technological changes in seeds, fertilizers, pesticides, agricultural machinery, cultivation techniques, precision agriculture, intelligent agriculture, water-saving techniques, weather modification, and others can increase productivity. Changes in technology also require an increase in the capacity of agricultural human resources, so that the entire capacity of agricultural production also increases. 

The decline in rice productivity may be due to the decline in Indonesia’s agricultural production capacity. Increased rice productivity began leveling-off at the present condition of production capacity. Indonesia’s rice productivity of 5.2 tons/ha is higher than rice productivity in Thailand (3.1 tons/ha), Myanmar (3.8 tons/ ha), the Philippines (4 tons/ha), and Malaysia (4.1 ton/ha), but lower than Vietnam (5.8 tons/ha), Japan (6.6 tons/ha) or China’s (7.0 tons/ha). In theory, Indonesia still has the opportunity to increase rice productivity and domestic production capacity in general, with superior technological change. 

Analytical-methodological 

A decrease in paddy productivity might occur because the standard size of the paddy fields is too large so that the harvested paddy area is also large. The harvested area in the area sample framework method was built using the basis of the paddy field area, which was estimated with four basic maps, namely (1) earth map, (2) administrative map, (3) paddy field standard map, and (4) land cover map. 

The Geospatial Information Agency and the Ministry of Agrarian Affairs and Spatial Planning synchronize paddy field with data and field verification in several provinces of rice production centers. In 2019, the paddy field area will be set at 7.46 million hectares (Minister of Agrarian & Spatial Decree No. 686 / SK-PG.03.03 / XII / 2019, December 17, 2019) or increased by 358,000 hectares from 7.10 million hectares in 2018 (Decree of the Minister of Agrarian & Spatial Planning No. 399 / Kep-23.3 / X / 2018 dated 8 October 2018). 

The figure of 7.10 million hectares of paddy field area was horrendous at the end of 2018 because there was a very significant decrease from the 2013 paddy field area of 7.75 million hectares (Decree of the Head of the National Land Agency No. 2296 / Kep-100.19 / IV / 2013 April 23, 2013). The phenomenon of converting 600,000 hectares of paddy fields for five years or 120,000 hectares per year becomes very sensitive in a political year. 

In 2019, rice production decreased by 7.76 percent to 51.33 million tons of GKG, more than the decline in 6.15 percent harvested area. As a result, rice productivity remains 4.81 tons per hectare, a very unusual decline. 

Methodologically, the Food Data Working Group at the Statistics Community Forum is also reviewing the selection method for the paddy field segment that is measured further. In principle, the exact sampling is different from the sampling in an arc and a line, because the algorithm is also different. 

The method of reporting the growth phase of rice using Android smartphones in real-time by field officers to the Area Sample Framework server in Indonesia Statistics seems quite accurate. However, paddy segment sampling and measurement methods of sample production may be still methodologically biased. 

Empirical-policy 

In the 2018-2019 period, the government was still intensively carrying out special efforts to increase rice, corn, and soybean production. Almost all levels of the agricultural bureaucracy throughout Indonesia were targeted to increase the added planting area (LTT) of rice, corn, and soybeans. Increasing LTT without improving production systems or good agricultural cultivation decreases productivity. 

Increased rice production can be pursued by intensification strategies, such as the application of superior seeds, a combination of chemical fertilizers, organic fertilizers, and biological fertilizers, the use of effective agricultural machinery, integrated pest and disease management, irrigation and drainage water management, and others. 

The economics of rice production also requires policy support beyond farming, such as agricultural financing, increased market access, the certainty of buying farmers’ grain with adequate price incentives, guaranteeing the selling price to farmers and business certainty. 

Likewise, the rice agribusiness system requires farmer socio-institutional engineering to increase business scale, through the application of mechanical technology, planting tractors, integrated harvesting machines (combined harvester) and post-harvest efficiency, milling and processing of harvest in agroindustry schemes that can increase added value and job creation. In short, the decline in rice production occurs in theoretical, analytical-methodological, and empirical-policy dimensions individually and together. 

The solution is a combination of increasing production capacity, improving the accuracy of sampling the harvested area segment along with measurement of production in samples, and integrating several cultivation techniques, farm management, and needed supporting policies. 

Anticipating the food crisis through strengthening domestic rice stocks is not an option, but a necessity that must be done for the remainder of the 2020 calendar year. Domestic rice stock can reach a critical point in the period from November 2020 to February 2021. Stabilization of rice prices is crucial because rising retail prices can raise the poverty line.