The Food Crops Sector Grows Minus 24.75 Percent in the First Quarter of 2024

Since the first quarter of 2023, the food crop sector has grown negatively. In the first quarter of 2024, the growth will be -24.75 percent.

KOMPAS/AGUS SUSANTO

Farmers were sifting Inpari 32 rice variety in Cibuntu Village, Pasawahan District, Kuningan Regency, West Java on Thursday (2/5/2024). The Central Statistics Agency notes that the growth of the food crop sector in the first quarter of 2024 has contracted by -24.75 percent annually.

JAKARTA, KOMPAS — The annual growth of gross domestic product or GDP based on the agricultural sector of food crops in the first quarter of 2024 has contracted deeply. This continues the sector's negative growth trend since the beginning of 2023.

The agriculture of food crops includes cultivated plants that produce carbohydrates and proteins for consumption. These plants include rice, corn, and soybeans.

The Central Statistics Agency (BPS) noted that the Indonesian economy in the first quarter (January-March) 2024 grew 5.11 percent on an annual basis. All economic supporting business fields grew positively, only the agriculture, forestry and fisheries sectors grew -3.54 percent annually.

Out of all components in the sector, the growth of the food crop agricultural sector has seen a significant contraction, reaching -24.75 percent annually. This continues the negative growth trend of the food crop agricultural sector since the beginning of 2023.

In the first quarter of 2023 and the second quarter of 2023, the agricultural sector for food crops decreased by 3.01 percent and 3.26 percent respectively. Furthermore, in the third quarter of 2023 and fourth quarter of 2023, the growth rate still contracted, amounting to -1.32 percent and -10.02 percent respectively.

Also read: The Economy is Growing, but Not Yet Stable and Quality

In a press conference on May 6, 2024, Acting Head of BPS Amalia Adininggar Widyasanti stated that the agricultural, forestry and fisheries sectors contracted due to the impact of El Nino. This climate phenomenon has caused a decline in the production of agricultural commodities, particularly food crops.

The Executive Director of the Institute for Development of Economics and Finance (Indef), Tauhid Ahmad, stated on Tuesday (7/5/2024) that El Nino is indeed the main cause. However, there are several other factors that have led to a drastic decline in the growth of the food crop agricultural sector.

He explained that El Nino, which occurred from the second semester of 2023 until its pressure decreased in April 2024, has caused a decrease in national rice and corn production. For example, in 2023, the total rice production was 31.1 million tons, a decrease of 1.36 percent annually.

In the first quarter of 2024, growth in the food crop agriculture sector contracted very deeply, namely -24.75 percent on an annual basis.

Then, in January-March 2024, data from the BPS Sample Framework showed a total national rice production of 5.78 million tons. This production volume decreased by 37.98 percent compared to the first quarter of 2023, which was 9.32 million tons.

"To offset the decline in rice production, the government has decided to import rice in 2023 and 2024. The figure is quite large. "Because national rice production has fallen and rice is imported from abroad, the input food crop sector, especially rice, to GDP is very small," said Tauhid when contacted from Jakarta.

Based on data from BPS, Indonesia's total rice imports in 2023 amounted to 3.06 million tons, a yearly increase of 613.61 percent. Referring to the data from the National Food Balance Projection 2024, rice imports from January to March 2024 have already been realized at 1.41 million tons. Meanwhile, rice imports from April to December 2024 are targeted to reach 3.76 million tons.

Also read: Rice shortages affect national economic growth

Profitable to traders

Tauhid also said that El Nino also caused the rice harvest from the first planting season to be postponed from the usual March to April. This causes the input of the agricultural food crop sector to GDP in the first quarter of 2024 to also be small.

In addition, in the first quarter of 2024, the price of harvested dry paddy (GKP) at the farmer level is very high, with some areas even reaching Rp 8,000 per kg. However, since only a few areas have harvested rice, only a small number of farmers are able to enjoy the increase in GKP prices.

During that period, according to Tauhid, the price of rice also rose quite high along with the increase in the price of GKP at the farmer level. The increase in the price of rice was largely enjoyed by companies and traders who had rice stocks, not farmers.

"The condition indicates that it is actually the companies and rice traders who benefit more from the increase in GKP and rice prices throughout January-March 2024," he said.

Also read: Rice Deflation “Drama”

According to Tauhid, the rice situation from last year to the first quarter of 2024 is a lesson for the government. The decline in rice production due to El Nino and the increase in GKP prices which were not felt by many farmers had an impact on national economic growth.

The condition indicates that it is actually the companies and rice traders who benefit more from the increase in GKP and rice prices throughout January-March 2024.

Climate change will continue to be a challenge in the future. Therefore, the government needs to anticipate it by increasing food production and productivity, especially rice. In addition, the government also needs to ensure that the price of GKP remains profitable for farmers.

"Those efforts need to be accompanied by building the food security of farmers, especially small-scale farmers, so they have their own stocks of rice and paddy. This is because farmers are both producers and consumers of rice," he said.

KOMPAS/AGUS SUSANTO

Farmers harvested Inpari 32 rice variety in Cibuntu village, Pasawahan district, Kuningan regency, West Java on Thursday (2/5/2024). In that area, the farmers' dry grain harvest (GKP) is sold for Rp 5,000 per kilogram or lower than the government purchase price (HPP), while the GKP at the farmers' level is priced at Rp 6,000 per kg.

Farm laborers fell

In addition to the growth of the agricultural sector, the Central Statistics Agency (BPS) also released the employment condition in the agricultural, forestry, and fisheries sectors. Out of 17 fields of work, these sectors absorbed the most workforce in February 2024, with 28.64 million people or approximately 28.64 percent of the total working population of 142.18 million.

The sector's employment rate increased by 0.03 million people compared to February 2023 which was 40.63 million people. However, the number of freelance workers in the agricultural sector or daily or piece-rate farmers decreased by 0.24 million people from 3.54 million people in February 2023 to 3.52 million people in February 2024.

Also read: Farmers are Increasingly Aging and Experiencing Guremization

Head of the Public Relations and Information Bureau Ministry of Agriculture Kuntoro Boga Andri said that labor absorption in the agricultural sector is still the highest compared to other business fields. This shows that the agricultural sector is still the main livelihood for the Indonesian people.

Moreover, the sector also contributes to the absorption of employment in several other fields of business. One of them is the accommodation and food and beverage sector, which saw an increase in employment by 0.96 million people from 10.15 million people in February 2023 to 11.11 million people in February 2024.

"The basic materials or raw materials for food and beverage products are inseparable from the national agricultural sector's ability to provide sufficient and diverse food sources. Fortunately, our agriculture still remains the main source of employment for the Indonesian people," said Kuntoro in a press release in Jakarta.

Even so, the absorption of agricultural labor, especially agricultural laborers, in a number of areas, is not optimal. A farmer figure who is also the Chair of the Indonesian Farmers' Harmony Association (HKTI) in Demak Regency, Central Java, Hery Sugiharto, said that there are a number of factors that have influenced the decline in agricultural workers in a number of areas.

In Demak, for example, a long dry season due to the impact of El Nino last year caused many rice paddies to remain unused or not planted with rice. This condition resulted in many farmers and agricultural workers being unemployed temporarily.

In addition, the increase in farm labor wages has also caused land-owning farmers to reduce the number of workers during planting or harvesting. Similar actions are also taken by traders or farmers' rice reapers during the rice harvest.

"Many of those with large capital have reduced their workforce because they already have a combine harvester or rice harvesting machine," he said.

BPS noted that the average wage for laborers in the agriculture, forestry, and fisheries sectors in February 2024 amounted to Rp 2,236,045 per month. This wage increased by 8.42 percent compared to February 2023, which was Rp 2,062,328 per month.