Arifin, Bustanul (2014) The Roles of Input Policies in Transforming Agriculture in Indonesia. In: The Roles of Input Policies in Transforming Agriculture in Indonesia.


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Indonesian agriculture has experienced a significant structural transformation in the past four decades. The growth performance of the agricultural sector remains a moderate 4.0 percent per year in 2012, a significant increase from a 2.9 percent growth right after the global financial crisis in 2010. The performance of agricultural growth is the second lowest after the mining sector’s growth of 1.5 per- cent. Agricultural performance is obviously lower than that of the manufacturing and service sectors, achieving 5.7 percent and 8.1 percent growth, respectively. The estate crops, fisheries, and food crops sectors have contributed to agricultural growth performance, mostly because the world price of such important commodities remains high, contributing significantly to the added value of agricul- tural sectors. However, in view of the quality of growth argument, a 4.0 percent growth is simply not adequate to generate more em- ployment and alleviate poverty. The current administration of President Susilo Bambang Yudhoyono (SBY) has issued several policies affecting the growth and performance of the agricultural sector under a package of “revitalizing agriculture.” It has implemented a quadruple tracks strategy— pro-growth, pro-job, pro-poor, and pro-environment—that is an improvement from the triple-track strategy of the previous administra- tion, adding the last expression of pro-environment. Subsidies on agricultural inputs, particularly fertilizer, seed, and some subsidized credit programs, are among the important policies to improve food and crop production and achieve food self-sufficiency in five strate- gic commodities: rice, corn, soybean, sugar, and beef. Although there has been no significant indication at the field level that these policies have led to radical changes in the market structures of input and industry performance, and hence structural transformation, the policies will continue until 2014, the end of the administration. Some rationales for the input policies include the facts that the agricultural production system in Indonesia is highly dependent on small-scale farmers, who have limited access to capital, and a high diversity of farming systems in the country, implying serious com- plexities for increasing economies of scale and efficiency levels. The majority of small farmers are rice farmers, with about 9.5 million farm households controlling agricultural land of 0.5 hectare or less. These rice farmers make up about 53.6 percent of the total 17.8 million farm households. The second largest farm household in Indonesia is corn farmers, contributing 21 percent of the total, although the two crops of rice and corn are not mutually exclusive. Rice in Indonesia is produced in 11 rice production centers: Aceh, North Su- matra, West Sumatra, South Sumatra, Lampung, West Java, Central Java, East Java, Bali, West Nusa Tenggara, and South Sulawesi. Nearly 60 percent of rice production in Indonesia comes from Java and Bali, islands with large urban populations and well-developed market infrastructures. The use of modern inputs and relevant technology in the agricultural production system is ultimately important for such a large country as Indonesia. This means that relying on agricultural production to increase crop intensity, let alone slow the expansion of new agricultural land, is clearly not the answer for the huge challenge of food security in the future. Indonesia needs more sound input policies and, more importantly, progressive technological change to transform the agriculture for the future. This study will identify and explain the following problems. Subsequent research questions will follow, which will drive the operational objectives of the study.

Item Type: Conference or Workshop Item (Paper)
Subjects: S Agriculture > S Agriculture (General)
Divisions: Fakultas Pertanian (FP) > Prodi Agribisnis
Depositing User: BUSTANUL A
Date Deposited: 04 Jul 2018 07:31
Last Modified: 04 Jul 2018 07:31

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