Senin, 11 Maret 2013

MP3EI endangers Java’s agriculture


MP3EI endangers Java’s agriculture
Budi Widianarko  ;   The founder of the Java Institute,
Soegijapranata Catholic University
JAKARTA POST, 05 Maret 2013


Nearly 200 years ago, in his great work The History of Java, Sir Thomas Stamford Raffles, FRS wrote “The island of Java is a great agricultural country; its soil is the grand source of its wealth. In its cultivation the inhabitants exert their chief industry, and upon its produce they rely, not only for their subsistence, but the few articles of foreign luxury or convenience that they purchase. The Javans are a nation of husbandmen, and exhibit that simple structure of society incident to such a stage of its progress. ... The soil of Java, though in many parts much neglected, is remarkable for the abundance of its production. With very little care or exertion on the part of the cultivator, it yields all that the wants of the island demand, and is capable of supplying resources far above any thing that the indolence or ignorance of the people, either oppressed under the despotism of their own sovereign, or harassed by the rapacity of strangers, have yet permitted them to enjoy”. Java is still the rice bowl of Indonesia.

Java (population 107 million) constitutes 45 percent of the country’s total people (237 million). More than a third (36.5 percent) of the working age, or 41.2 million people in Java, are dependent on agriculture. 

Java’s rice production in 2012 exceeded 10 million tons. On paper, Java accounts for more than half of the the country’s rice production. The superiority of Javanese rice cultivation is not a new story. 

When Raffles was writing, Sumatra, Malacca, Borneo and the Maluku were dependent on rice from Java. Rice was also exported to Ceylon, Coromandel (India) and the Cape of Good Hope (South Africa).

Despite recognition that agriculture is Java’s most precious treasure, ironically, it is now in serious danger. The danger is the Master Plan for the Acceleration and Expansion of the Indonesian Economy (MP3EI), which threatens to the very existence of agriculture in Java. MP3EI is was launched by President Susilo Bambang Yudhoyono’s administration in 2011 to “transform the Indonesian economy into a developed nation recognized by the world community, through high, inclusive and sustainable economic growth”.

The government optimistically stated that with MP3EI the country would take its place as one of the world’s developed country by 2025 with an expected per capita income of US$14,250-$15,500 and total gross domestic product of $4.0-4.5 trillion. As Strategic Asia put it, MP3EI is a very ambitious plan.

MP3EI focuses on eight main developmental thrusts, namely agriculture, mining, energy, industry, maritime, tourism, telecommunications and strategic zones. 

These eight primary programs consist of 22 main economic activities which are claimed to be based on the inherent potential and strategic value of each of the corridors.

The six economic corridors include (1) Sumatra as the center of production and processing of natural resources and as the nation’s energy reserve, (2) Java as the driver of national industry and service provision, (3) Kalimantan as the center of production and processing of national mining and energy reserves, (4) Sulawesi — as the center of production and processing of national agricultural, plantation, fishery, oil and gas, and mining, (5) Bali — Nusa Tenggara as the gateway for tourism and national food support, (6) Papua — Maluku as the center of development of food, fisheries, energy and national mining. Within this framework the main activities of the Java economic corridor are (1) food and beverages, (2) textile, (3) transportation equipment, (4) shipping, (5) ICT, (6) defense equipment and (7) Jabodetabek (Greater Jakarta) Area.

MP3EI promised that Indonesia would become one of the world’s main food suppliers, as a processing center for agricultural, fisheries and natural resources, as well as a center for global logistics, by 2025 or earlier. 

However, to reach the so-called “one of the world’s main food suppliers” MP3EI leaves Java at the fringe.

MP3EI endangers Java’s agriculture in two ways. First, MP3EI will shift the agricultural center from Java to other islands, especially two designated economic corridors, namely Sulawesi and Papua-Maluku, as well as Bali-Nusa Tenggara for animal husbandry. 

Second, and more threatening, MP3EI — in fact — triggers the breakup of the natural linkage between local agriculture and the food processing industry in Java. Recent data indicated that two categories of packaged food predicted to experience the highest growth are snack bars and meal replacement. Neither contain a much local material.

Ironically, instead of promoting the links between local agricultural production and the processing industry, MPE3I considers high import tariffs for raw materials and packaging materials as a regulatory challenge. 

To deal with these challenges, regulation and policy measures are embedded in MP3EI: (1) “reform policies and regulations in order to make foreign investment more attractive, e.g. import duty tariff for raw materials such as for rice flour, potato, milk and chocolate should be made lower than the tariff for their end products ...”, and (2) “review policies to lower the cost of packaging materials in order to increase the competitiveness of the food and beverage packaging products ....”.

With such incoherent conditions, it is clear that the development strategy of the food and beverage industry alienates local content. 

The fact that Java is still Indonesia’s agricultural powerhouse should be considered meticulously before a firm decision on its future is made. Unless the government is willing to revisit the “spirit” of MP3EI, Java’s agriculture tragedy will be unavoidable. ●

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