Integrated Partnerships Being Developed

Kompas

Various food technology products were exhibited at the Jakarta Food Security Summit at the Jakarta Convention Center, Thursday (12/2/2015).

JAKARTA, KOMPAS — Integrated and inclusive partnerships involving government, companies, financial institutions and smallholders are being developed. This strategy also encourages farmers to consolidate, be promoted to the next grade and become sovereign in their own land.

During the Covid-19 pandemic, the agricultural sector faces the threat of a crisis as well as opportunities to develop.

Speaking at the opening of the Jakarta Food Security Summit-5, Wednesday (18/11/2020), President Joko Widodo emphasized that an integrated and inclusive partnership business model could encourage the food sector as an economic force that creates more jobs and becomes a source of community welfare.

The President also encouraged the Indonesian Chamber of Commerce and Industry to continue its commitment to assist independent smallholders through an integrated and inclusive partnership scheme. The reason is, the scheme will create efficiency, improve quality and absorb food commodities produced by farmers.

The government ensures the availability of land, certification, provision of infrastructure, as well as assistance and subsidies for farmers.

Under this scheme, companies assist and buy farmers\' crops, while financial institutions facilitate funding and credit for farmers. The government ensures the availability of land, certification, provision of infrastructure, as well as assistance and subsidies for farmers.

According to data from Statistics Indonesia (BPS), the Indonesian economy grew by minus 5.52 percent annually in the second quarter of 2020 and minus 3.49 percent in the third quarter of 2020. However, the agricultural business field grew 2.19 percent annually in quarter II-2020 and 2.15 percent in quarter III-2020.

Meanwhile, the 2019 global food safety index placed Indonesia in the 62nd place out of 113 countries with a score of 62.2.

Finance Minister Sri Mulyani Indrawati said food security was one of the priorities for the 2021 State Budget. The government has allocated Rp 99 trillion to strengthen food security, including a fertilizer subsidy program for farmers. An agricultural insurance program is also being prepared. "Rp 99 trillion is allocated from spending from various ministries/agencies as well as regional government spending. We have to keep maintaining the agricultural sector," he said.

Kompas/Priyombodo

Palm oil fruits are displayed during the fourth Jakarta Food Security Summit at Jakarta Convention Center in Central Jakarta on Thursday (8/3/2018).

Based on BPS data, of the 128.45 million people working in Indonesia, around 29.76 percent are in the agricultural sector. However, the average monthly wage for agricultural workers is Rp 1.91 million, or below the national average of Rp 2.76 million.

BPS data also shows that there are 15.809 million smallholders in Indonesia, who control less than 0.5 hectares of land.

Economies of scale

Cooperatives and Small and Medium Enterprises Minister Teten Masduki, said that most small-scale farms are managed individually, with narrow land, and without an economic scale with modern management from upstream to downstream.

One of the solutions is the corporatization of farmers through cooperative institutions. Farmers are encouraged to manage their land and business collectively, professionally and economically.

Tokopedia cofounder and CEO William Tanuwijaya said the community could help farmers and fishermen by buying food and beverage products that were sold online. This will have an impact on the food supply chain and agriculture.

The growth of this sector is maintained because food is a basic need of society.

Meanwhile, Bank Rakyat Indonesia president director Sunarso said the agricultural and food sectors were among the focuses of lending. The growth of this sector is maintained because food is a basic need of society.

The chairman of the Indonesian Chamber of Commerce and Industry\'s Permanent Commission for Forestry, Arif Patrick Rachmat, said agricultural and food industry players that had implemented an inclusive partnership business model would recover faster during the Covid-19 pandemic. "Productivity is maintained and farmers get a better selling price," he said.