CAPSA–Brighten international conference on agricultural investment calls for policy reforms to boost asset ownership and market linkages for farmers in Indonesia
Lasting food security in Indonesia will come about with increased investment in agriculture. This would require reforms in several key sectors, including land ownership, water resources, agricultural infrastructure and farmer institutions. High-level decision makers discussed these issues in Indonesia, and heard of successful models from Brazil, India and South Korea in a high-level two-day international conference Investing in sustainable agriculture for food security and poverty reduction, held on 27-28 July 2011. The conference was organized by the United Nations' regional institute, the UNESCAP Centre for Alleviation of Poverty through Sustainable Agriculture (CAPSA), in collaboration with the Brighten Institute, a national public policy and development institute, based in Bogor, Indonesia.
Dr. Katinka Weinberger, Director of CAPSA, welcomed the invitees and participants on behalf of the organizing committee. She noted that CAPSA's objective is to bring together international expertise, dedicated policy makers and successful models from other countries to help decision makers to identify and chart the best path for lasting food security in Asia and the Pacific. HE Dr. Ir. H. Suswono, Minister of Agriculture of the Republic of Indonesia delivered the keynote address, "Agricultural Development in Indonesia: Vision and Strategy". Minister Suswono identified three major challenges facing the agricultural sector in Indonesia: less farmland, competition for water use, and climate change impacts. Agricultural lands are being lost as the land is converted to non-agricultural uses. Water resources are depleting as irrigation services decline and competition for water from nonagricultural use grows.
To address these challenges, the government of Indonesia has identified five food security policy areas: sustainable increases in production and productivity; increases in efficiency and effectiveness of food distribution; community farmer empowerment; accelerated food diversification; and food vulnerability management. While emphasizing the need for international efforts through comprehensive, coherent and coordinated policies and actions to mainstream sustainable agriculture, Minister Suswono affirmed Indonesia's commitment to work closely with all other countries and international institutions to achieve food security in an environmentally sustainable manner.
Agricultural experts pointed out that business investment strategies and credit instruments are key tools needed. Dr. David Phiri, Chief of Policy Assistance and Support Services of the Food and Agriculture Organization of the United Nations, delivered special remarks. He underscored the need to recognize farming as a business if agriculture is to be an important source of livelihoods or economic growth. He stressed that governments and partners need to adopt policies and extension methods that help farmers develop their capacity to save, accumulate fixed capital, and continually reinvest in their own farms. Professor Dr. Hermanto Siregar, Vice Rector of Bogor Agricultural University, in his special remarks during the inaugural session, highlighted that access to limited credit for agricultural production, currently at only 6 per cent of all credit extended by financial institutions in Indonesia, is hampering growth in the agricultural sector.
Dr. Joyo Winoto, head of the National Land Agency of the Republic of Indonesia, delivered a keynote address on the second day of the conference on the topic "Land Policy, Farmers' Capital Formation and Welfare". Identifying land as the most crucial asset for the rural poor, Dr. Winoto called for agrarian reforms that include changes to land politics and law, reforms to ownership and access to land and distribution or redistribution of fresh state land as strategies to increase land owned by the poor.
Dr. Saifullah Syed, Prof. Mahendra Dev and Mr. Yong Kyu Choi, presented the experiences of Brazil, India and South Korea, respectively, with examples of agricultural investment policy and institutional reforms that led to agricultural transformation in those countries. Four success factors were common to all three countries: stable financing mechanisms are available; the country's policy makers can identify, formulate and implement appropriate policies; technological advancements complemented by institutional innovations focus on smallholder agriculture; and the policy environment supports the rule of law and property rights.
Presenting a case study of Indonesia, Dr. Siti Jahroh of Brighten Institute emphasized the need to increase farmer smallholdings, improve agricultural infrastructure that supports smallholders and strengthen farmer institutions, access to market to provide greater incentives for farmers to save and invest in their farms. Dr. Upali Wickramasinghe, Regional Adviser of CAPSA-ESCAP, recommended two key improvements: a stronger policy framework that encourages farmers to invest in agriculture including the provision of public goods, and a regulatory mechanism that reduces the transaction costs which farmers currently face.
Assistant Ministers of Agriculture in Indonesia, Professor Dr. Tahlim Sudaryanto and Professor Dr. Pantjar Simatupang, along with senior officials of the Central Bank of Indonesia, Development Planning Agency, Ministry of Agriculture, Ministry of Public Works, Ministry of Social Affairs, National Land Agency, academics and representatives of international organizations, the private sector and civil society groups took part in deliberations to identify salient features of an investment strategy to transform the agricultural sector in Indonesia during the two-day conference.
For further information, please contact:
Dr. Upali Wickramasinghe
Regional Adviser on Poverty Reduction and Food Security
CAPSA - UNESCAP
Jalan Merdeka 145 Bogor 16111, Indonesia
Tel: +62 251 834 3277, 835 6813 Fax: +62 251 833 6290
Emails: Upali.Wick@uncapsa.org or email@example.com