OECD DEVELOPMENT CENTRE
Working Paper No. 34(Formerly Technical Paper No. 34)
BIOTECHNOLOGY AND DEVELOPINGCOUNTRY AGRICULTURE:
MAIZE IN INDONESIA
by
Hidjat Nataatmadja et al.
Research programme on:Changing Comparative Advantage in Food and Agriculture
January 1991OCDE/GD(91)5
Technical Paper N°34
“Biotechnology and Developing Country Agriculture: Maize inIndonesia”, by Hidajat Nataatmadja et al., Head of Project:Carlienne Brenner, February 1991
The figures are not reproduced in this paper due to technical reasons- Pleaseconsult printed version.
TABLE OF CONTENTS
SUMMARY......................................................................................................................9
PREFACE .....................................................................................................................11
I. PRODUCTION, UTILISATION, AND MARKETING ..................................................13
1. Administration and Population ...........................................................................132. Land Resources.................................................................................................133. Climate ...............................................................................................................164. Regional Characteristics of Smallholdings ........................................................185. Maize Production System ..................................................................................196. National Maize Production .................................................................................237. Maize Consumption and Utilisation....................................................................258. Farm Income, Production Cost, Marketing Margin ............................................27
II. MAIZE RESEARCH, TECHNOLOGY DEVELOPMENT AND DIFFUSION.............31
1. Research Organisation ......................................................................................312. Research Co-Ordination ....................................................................................333. Research Goals .................................................................................................344. Research Results and Contributions .................................................................385. Support Facilities, Manpower and Budget.........................................................446. Technology Capability and Infrastructure ..........................................................467. Diffusion of Technology to Producers................................................................488. Competition and Comparative Advantage.........................................................539. International Technology Transfer Versus Domestic
Generation .........................................................................................................56
III. INTELLECTUAL PROPERTY RIGHTS...................................................................57
1. Seed Classification and Certification .................................................................572. Preference and Promotion of Open-pollinated versus
Hybrid Varieties..................................................................................................58
3. Policies and Attitudes Towards Property Rightsand Patent Protection ........................................................................................59
IV. POLICIES AFFECTING MAIZE PRODUCTION AND CONSUMPTION................61
1. Production Policy ...............................................................................................612. Extension Programme .......................................................................................643. Current Priority Perception.................................................................................674. Competition with Other Crops............................................................................685. Consumption and Related Policy.......................................................................686. Employment and Farm Mechanism...................................................................727. Marketing and Related Policy ............................................................................76
NOTES .........................................................................................................................82
RESEARCH TEAM .......................................................................................................83
BIBLIOGRAPHY ...........................................................................................................84
RÉSUMÉ
Après le riz, le maïs vient au deuxième rang des produitsalimentaires de base en Indonésie. Sa culture s'étage selon des conditionsagro-écologiques très diverses. L'alimentation humaine absorbe plus de lamoitié de la récolte maïs, au cours des dernières années, la demande pourl'alimentation animale -- en particulier -- l'aviculture, a beaucoupaugmenté. Le Plan indonésien de développement fixe des objectifs deproduction de maïs aux différentes régions, avec des conditionstechnologiques variables sur le plan des sem*nces et du niveau d'autresintrants. Bien que le recommandations technologiques prévoient une largediffusion de sem*nces améliorées, une faible partie de la surface cultivéetotale est ensem*ncée d'hybrides. L'industrie commerciale de la sem*nceest d'ailleurs à ses débuts.
A la différence du riz et du soja, le maïs n'est pas l'objetd'interventionnisme actif de la part des pouvoirs publics. Cependant, lerevenu agricole lié à la culture du maïs a augmenté malgré la croissancedes coûts de production à l'hectare. Le prix élevé des hybrides parrapport à celui des variétés à pollinisation libre produites par lesexploitants n'incite guère à l'introduction des hybrides. Il sembleégalement que, à court terme, l'introduction des nouvelles biotechnologiesne suscite qu'une faible demande dans le domaine de la production de maïs.
SUMMARY
After rice, maize is the second most important staple food inIndonesia, and is cultivated under a diversity of agro-ecologicalconditions. While food accounts for more than half total maizeutilisation, demand for maize as livestock feed - particularly for poultry- has been growing rapidly in recent years. The Indonesian DevelopmentPlan sets production targets for maize for different regions, according todifferent technological "packages" in terms of the type of seed used andlevel of other inputs. Although the recommended technology packages implywider diffusion of improved seed, only a small share of the total areacultivated is sown to hybrids and the commercial seeds industry is onlyjust emerging.
Unlike rice and soybean, maize is not a major focus of policyintervention. Nevertheless, farm revenue in maize production has beenincreasing despite growing production costs per hectare. Given the highprice of hybrids compared to open-pollinated varieties so far obtainedunder farmers' conditions, there is little incentive to introduce hybridseed. There would also appear to be little demand for introducing newbiotechnology in maize production in the short term.
PREFACE
This case study of Indonesia has been undertaken as part of a research project on"Biotechnology and Developing Country Agriculture: the Case of Maize", carried out in the context ofthe Development Centre's research programme on "Changing Comparative Advantages in Food andAgriculture". The project, which assesses the prospects for selected developing countries ofincorporating new biotechnologies in competitiveness, focuses on the institutional aspects oftechnological change.
Maize was selected as an eminently suitable subject for examining how newtechnological developments in industrialised countries "interact" with the situation in developingcountries. One of the world's major cereal crops, in many developing countries maize is an importantfood and/or feed crop for which demand continues to expand, particularly for use as livestock feed. Maize is also a crop on which major biological research effort has been focused. This effort resultedin the innovation of hybridization in the 1930s and shows promise with respect to new biotechnolgies.
Dr Hidajat Nataatmadja and colleagues have contributed this case study of Indonesia. Ittraces production and consumption trends, examines Indonesia's maize research, technologydevelopment and diffusion system and concludes that at present there a few incentives to producersto adopt hybrids rather than open-pollinated varieties. In addition to the case of Indonesia, the projectincludes case studies of Brazil, Mexico and Thailand. It also analyses trends in research on theemerging maize biotechnologies and in the supply, demand and trade of maize internationally. Thecountry studies together with the analysis of technology trends (entitled "Emerging MaizeBiotechnologies and their Potential Impact") are all being published in this Technical Paper Series. The Conclusions and policy implications to be drawn from the project will be published by the OECD ina separate volume by Carliene Brenner.
Louis EmmerijPresident
OECD Development CentreDecember 1990
I. PRODUCTION, UTILISATION AND MARKETING
1. Administration and Population
Indonesia is the world's biggest archipelago nation, comprising 13 677islands stretching 5 110 km from east to west and 1 888 km from north to south. The total area is 4 497 241 km2, of which 2 019 380 km2 are land. This bigness hasgreat potential but lack of thought and planning can make it a great burden.
The population (Table 1.1) is very unevenly distributed. Java, with aboutseven per cent of total land area, has more than 60 per cent of the population. Thecountry has 27 autonomous provinces.
2. Land Resources
Indonesia's agricultural potential depends on several major factors:
- topography, geology, and soils- climate and water resources- agricultural enterprise, organisation and technology- socio-economic conditions and infrastructure.
Topography will determine land use and climate the possibility of developing
a crop or farming system. Soil will determine the inputs needed for the growth andcontinuity of the agricultural system adopted. The level of technology will determinethe good utilisation of resources. Socio-economic conditions will influence growth ofa farming system. Table 1.2 shows areas of land capability, which have beenclassified as follows:
I-III: for food or perennial cropsIV: for mixed farming (food, perennial crops,
grass/sylvipasture)V: for perennial and estate cropsVI: for perennial crops and forest farmingVII-VIII: for forest
Areas of swampland and dryland, which have agricultural potential inSumatra, Kalimantan, Sulawesi and Irian Jaya are shown in Table 1.3. We can seethat such dryland in these four major islands totals 37 996 000 ha., while theswampy land is 28 863 000 ha. Of the dryland, only 1 710 000 hectares can beclassified as in land capability classes I-III. So the four islands have only verylimited dryland suitable for food crop cultivation. The swampy area could be usedfor food crops but only with major investment. Prospects for new dryland includemixed farming, perennial or estate crop cultivation and animal husbandry.
Table 1.1POPULATION 1
Area Population Population Population PopulationProvince 1974 Density 1974 1980 Density 1980
km2 (X 1,000) Persons/km 2 (x 1,000) Persons/km 2
Estimated EstimatedD.I. Aceh 55 392 2 210 40 2 633 48North Sumatra 70 787 7 079 100 8 686 23West Sumatra 48 778 2 950 59 3 661 74Riau 94 562 1 769 19 2 152 23Jambi 44 924 1 118 25 1 318 29South Sumatra 103 688 3 813 37 4 514 44Bengkulu 21 168 578 27 680 32Lampung 33 307 3 163 95 3 640 48Sumatra 473 606 22 679 48 27 278 58D.K.I. Jakarta 590 4 712 7 986 7 531 12 764West Java 46 300 22 525 486 25 762 556Central Java 34 206 22 879 669 26 052 762D.I. Jogyakarta 3 169 2 580 814 2 965 936East Java 47 922 26 309 549 30 399 634Java and Madura 132 187 79 004 598 92 709 701Bali 5 561 2 217 398 2 677 481West NusaTenggara
20 177 2 321 115 2 781 138
East NusaTenggara
47 876 2 397 50 2 899 61
Bali & NusaTenggara
73 614 6 935 94 8 357 114
West Kalimantan 146 760 2 201 15 2 579 18Central Kalimantan 152 600 772 5 894 6South Kalimantan 37 660 1 803 48 2 169 58East Kalimantan 202 440 797 4 936 5Kalimantan 539 460 5 574 10 6 578 12North Sulawesi 19 023 1 842 96 2 191 115Central Sulawesi 69 726 997 14 1 166 16South Sulawesi 72 781 5 368 74 6 618 91South EastSulawesi
27 686 757 27 911 33
Sulawesi 189 216 8 964 47 10 886 58Maluku 74 505 1 187 16 1 375 18Irian Jaya 421 981 1 007 2 1 167 3INDONESIA 1 904 569 125 349 66 148 349 78East Timor is not included.Source: B.P.S. Statistical Pocket Book 1975, "Social Indicators 1975".Population density 1974 calculated. From Manfred Woelke, 1978, Statistical Information on Indonesian Agriculture. GermanAgency for Technical Cooperation.1 In 1989, the population was some 176 million, growing at 2.1% a year.
Table 1.2
ESTIMATED AREA AND DISTRIBUTION OF LAND CLASSES, BY ISLAND (000 HECTARES)
Land Java/ Bali Suma- Kali- Sula- Irian Nusa Maluk TotalClass Madura tra manten wesi Java Tenggarra
I 275 - - - - - - - 275II 344 19 - - 275 - 94 - 723III 969 - 631 - 806 - 138 25 2 569IV 3 369 144 7 781 1 319 1 869 1 144 2 069 1 113 18 809V 2 314 125 26 306 23 281 2 106 17 756 2 200 3 425 77 543VI 3 312 206 5 206 13 263 3 425 6 688 481 1 206 33 787VII/VIII 2 606 62 7 439 16 137 10 614 16 612 2 056 1 708 51 232
Total 13 219 556 47 363 64 000 19 095 42 200 7 038 7 475 190 946
Source: A. Affandi, Agricultural Development in Indonesia, 1986.
Table 1.3
ESTIMATED POTENTIAL AREA WITH 0-15 per cent SLOPE SUITABLE FOR AGRICULTUREIN THE FOUR MAJOR ISLANDS
(000 HA)
Flat- Flat-Island Swampy 0-3% Rolling Rolling Total
3-8% 8-15%
Sumatra 8 500 6 679 4 056 2 015 21 250Aceh 500 412 530 385 1 827North Sumatra 625 673 660 450 2 408West Sumatra 625 595 445 210 1 875Jambi 937 595 915 232 2 679Riau 1 750 1 265 915 277 4 207South Sumatra 2 938 2 245 271 296 5 750Bengkulu 188 69 160 75 492Lampung 937 825 160 90 2 012Kalimantan 9 196 4 445 5 944 4 035 23 620West Kalimantan 3 038 1 260 630 1 107 6 035Central Kalimantan 2 863 2 110 3 232 1 630 9 835South Kalimantan 1 100 82 916 537 2 635East Kalimantan 2 195 993 1 166 761 5 115South Sulawesi 162 746 551 705 2 164Southeast Sulawesi 0 221 118 113 452Central Sulawesi 0 300 133 363 796North Sulawesi 0 40 39 126 205Irian Jaya 11 506 4 825 3 026 969 20 326
Total 29 364 16 695 13 577 7 724 66 360Source: Repelita V, Ministry of Agriculture.
Table 1.4 shows land use for agriculture, where food crops occupy about 11.3million ha (columns 1, 2, and part of 5), or about 74 per cent of the total land foragriculture. The 15.2 million ha was about 7.5 per cent of the total national landarea. Yet when only soil classes I-IV are considered, it was about 47 per cent.
Table 1.4
LAND USE PATTERN FOR AGRICULTURE, AGRICULTURAL CENSUS 1983 (000 HA)
Island Wet Dry Fish Estate1 Others TotalLands2 Lands Ponds Crops
1 2 3 4 5 6
Sumatra 1 247 1 319 231 1 317 58 4 172Java 2 882 2 361 577 324 40 6 184Nusa Tenggara 321 572 7 139 15 1 054Kalimantan 507 548 8 682 60 1 805Sulawesi 469 654 28 366 22 1 540Maluku + Irian 6 216 2 225 8 456
Indonesia 5 432 5 670 853 3 053 203 15 211
1 Only for smallholders, large estates excluded.2 Wet land under various irrigation types.Source: Agricultural Census 1983, CBS.
3. Climate
In 1975 Oldeman, a Dutch expert, came up with a new climate classification,supposedly better than the Schmidt & Fergusson classification and more suitablefor food crops. He defines a dry month as when rainfall is lower than 100 mm and awet one when it exceeds 200. 200 mm is the minimum for a food crop to growwithout irrigation.
Much of the east coast of Sumatra has a drier climate than the western andmiddle parts of the island it is wetter. Parts of east coast Aceh and North Sumatraare irrigated. Other parts of this zone especially Riau, Jambi, South Sumatra andLampung are swamp and tidal swamp. Except for the province of West Sumatraitself, the western part of the island is much less developed because of mountains. The high rainfall also seems to produce highly acid soil (pH 4 - 5) and liming isdesirable, particularly for soybeans. Aluminium toxicity also limits food crops.
In Java much of the northern coastal area is drier, but these are the bestirrigated areas, particularly in West Java. In general, rainfall decreases from west toeast. Without irrigation, food production seems to follow rainfall, especially in thedrier part of Central Java. East Java is the centre of palawija (secondary crop)production, such as maize, cassava and soybean. West Java produces least
palawija, but is both the biggest rice producer and consumer, which makes its ricesurplus lower than that of East Java.
The higher palawija production seems linked with East Java's relatively highpH, which is very close to neutral (pH 6-7). Higher rainfall in West Java producesacid soil (pH about 5-6) less suitable for palawija crops. Southern Java is lessdeveloped than the north because of mountains and limestone. Large rivers flow tothe northern coastal region, generating a vast alluvial soil suitable for agriculturalproduction, hence the saying that "Java is the most fertile land in the world." This isnot wrong, because there are so many active volcanoes, suggesting a young andfertile soil.
Kalimantan is wet except in the east and the south-eastern tip. Much of thecoast is swamp and tidal swamp. The island is said to have "the poorest soil in theworld". Yet East Kalimatan produces much oil and natural gas and the provincehas a big urea factory.
Sulawesi is wetter in the centre, yet rice production is concentrated in thesouth, which is known as the rice granary of eastern Indonesia. High rainfall alonedoes not ensure high yields: mountainous central Sulawesi has poor transport.
In eastern Indonesia, we have Maluku, Irian Jaya, Nusa Tenggara (west andeast) and Bali. Bali is not really wet but water conservation is relatively good.Lombok and Sumbawa island of West Nusa Tenggara stand between the drierparts of the east, such as Sumba, Flores and Timor. East Nusa Tenggara is mainlysavannah and livestock production is high there.
In many places, maize and cassava are the main staples. Nusa Tenggara ispoor with limited agricultural potential and population density is too high in theseislands. Their dryness comes from the nearby Australian continent, to which NuraTenggara belongs climatically. Irian Jaya is wet and swampy, particularly in thesouth. The government has begun developing this virgin island's infrastructure, butlittle has been done in the short term.
4. Regional Characteristics of Smallholdings
Food crop farming is usually a combination of many crops, within a region ora single farm. Only in irrigated areas can we see rice planted as monoculture. Mixed cropping is shown in Table 1.5.
Table 1.5
PERCENTAGE DISTRIBUTION OF AGRICULTURAL HOUSEHOLDby Type of Agricultural Enterprise 1983
Type of Agricultural Enterprise
Region/Island Rice & Vegetables Small- Fish Fisher Live Degree ofPalawija Fruit holder Culture -Man stock/ diversi-
Estate Poultry fication
Sumatra 80.2 32.3 68.6 3.3 2.6 17.7 204.7Java 86.4 50.8 63.4 4.5 0.9 22.4 228.4Bali/NTT/NTB 85.5 52.3 65.4 1.2 3.6 41.8 249.8Kalimantan 88.0 45.3 54.1 1.6 3.5 18.4 210.9Sulawesi 82.2 44.9 66.2 1.7 8.5 27.4 230.9Maluku/Irian 84.4 63.2 66.0 0.6 11.1 25.9 250.2East Timor 96.3 62.3 79.6 0.9 1.8 28.6 269.5
Source: Agricultural Census, 1983. Book A.2. CBS, 1985.
Landholding size and distribution is shown in Table 1.6. There are manysmall farms below 0.5 ha outside Java, in more sparsely-populated areas. Sincethe farmer relies exclusively on manual labour, for food crop farming the maximumpracticable area per household is about 0.7 ha however great the land potential.
So smaller landowners are needed to help bigger farmers. The AgriculturalCensus of 1983 also showed about 18 per cent of rural households in Sumatrawere landless and about 20 per cent in Kalimantan, 15 per cent in Sulawesi andsome 30 per cent in Java. Not all the landless are farmers however.
Table 1.6
PERCENTAGE DISTRIBUTION OF AGRICULTURAL HOUSEHOLDSby Class of Landholding and Region/Island, 1983
Region/Island 0.5 ha 0.5-1 ha 1-2 ha 2-3 ha 3 ha Total %
Sumatra 28.3 23.3 26.2 12.1 10.1 100Java 63.1 21.5 10.5 2.7 1.6 100Nusa Tenggara 34.0 23.1 23.5 10.4 9.0 100Kalimantan 20.3 15.4 23.8 15.1 25.4 100Sulawesi 27.1 23.7 26.9 12.3 10.0 100Maluku/Irian 30.3 17.5 22.3 13.6 16.3 100
Source: Agricultural Census, 1983, Book J1.
Table 1.7 shows the importance of maize farming in relation to other foodcrops. Maize is second in importance after rice. Rice easily dominates, except inMaluku and Irian Jaya, where sago palm is the main rural staple.
Table 1.7
PERCENTAGE DISTRIBUTION OF AGRICULTURAL HOUSEHOLDS BY FOOD CROPCULTIVATED AND REGION/ISLAND IN 1982/19831
Region/Island Lowland Rice2 Upland MaizeCassava Sweet Peanut SoybeanWS DS Rice Potato
Sumatra 48.6 30.3 30.7 15.3 27.8 5.5 4.6 2.4Java 60.3 38.3 18.1 4.3 42.1 9.1 10.0 11.0Bali & NTT/NTB 42.0 24.5 23.5 46.0 39.4 19.2 8.0 7.0Kalimantan 39.7 34.5 47.1 23.2 31.8 6.1 4.2 1.4Sulawesi 30.6 30.2 16.7 46.5 34.9 10.7 8.4 2.8Maluku/Irian Jaya 1.4 0.4 14.6 30.8 61.7 55.6 11.5 3.3
Source: Agricultural Census, 1983, CBS Jakarta.1 per centage of total food crop households, animal husbandry and inland fishery.2 WS = wet season. DS = dry season.
5. Maize Production System
Maize production in Indonesia is exclusively a smallholder activity. Privatecompanies enter only into production and marketing of seed, fertiliser, andpesticide. Stephen D. Mink in The Corn Economy of Indonesia mentions the"tremendous diversity" in maize production methods, between farms as well asregions. Often maize is grown as a supplementary crop, occupying less than 10 percent of the total area. In shifting cultivation, maize and rice are always mixed, withmaize harvested first and then rice. Cassava, maize and rice is a common crop mixin much of Indonesia. Cassava may be harvested late in the year, acting asstanding food storage in the field.
This diversification and complexity of production is illustrated by the UplandAgriculture and Conservation Project, in East Java. The project was in a "criticalarea," where erosion was high and the slope above 15 per cent. Crop productivitywas particularly low before and during the first project year. The governmentprovided a subsidy for land conservation, plant materials, fertiliser and insecticide. In the first year the subsidy was Rp180 000/ha. In the second, it was Rp 80 000/hafor further improvement.
The project was then evaluated for the four years shown in Table 1.8. Thedata was collected from five farmers participating in the project (1, 2, 3, 4 and 5). The year 1984/1985 was the start of the project. The second year subsidy wasused to buy goats which were given free to farmers. The table shows that:
- farm size ranged from 0.26 - 1.0 ha.
- fertiliser and insecticide use increased beyond the subsidy year.
- there was a shift from rice to maize.
- no farmer grew cotton in the first year, but later all did.
- gross revenue increased from Rp122 200 in 1984/1985 to Rp1 419 900per hectare in 1987/1988.
- rice was mixed with maize; cassava was planted after the maize/rice harvest, sometimes only at the border; cotton was planted before maize was
harvested.
- besides annual crops, farmers also planted citrus, expecting to receive higher income the following year.
- for feed and terrace strengthening they grew elephant grass.
- some farmers experimented with growing soybeans.
So when properly carried out, even on eroded soil, maize production canreach 2.9 tons/ha under mixed cropping. Fertiliser use per hectare reached a high526 kg/ha in 1987/1988. Within a year, the gross income was comparable to anirrigated rice field. But such results were not achieved in all villages of the project. Infrastructure and leadership were decisive for success.
Table 1.8
PRODUCTION PERFORMANCE IN UPLAND AGRICULTURE AND CONSERVATION PROJECT,BRANTAS WATERSHED, EAST JAVA,
1984/86 (Sumberjo Village, Blitar)
1984/1985 1985/1986
Input & Production1 2 3 4 5 X 1 2 3 4 5 X
Area (ha) ofFarm Sample .26 .54 .35 .32 1.0 0.5 .26 .54 .35 .32 1.0 0.5
Inputs
Fertiliser (kg) 50 100 75 50 100 152 150 175 220 123 250 375Manure (qt) 15 15 25 10 30 38 20 25 30 12 45 53Pesticide (lt) - 2.5 - - - 0.2 1 1 1.5 1 2 2.6
Production (qt)
Rice 1.3 1.5 - - - 1.3 7 21 - 12 38 32Maize 0.4 1 1.5 3 12 7.2 1 2.3 8 - 10.5 8.8Cassava 12 11 23 10 22 32 12 6.3 18 4.5 18.8 16.5Cotton - - - - - - 1.5 4 0.5 1.5 11.8 7.7
Gross Revenue R = 13 000 R = 320 00061 200 96 80048 000 66 000
RP 122 200 308 000RP 790 800
Table 1.8 (continued)
PRODUCTION PERFORMANCE IN UPLAND AGRICULTURE AND CONSERVATION PROJECT,BRANTAS WATERSHED, EAST JAVA,
1987/88 (Sumberjo Village, Blitar)
1986/1987 1987/1988
Input and Production 1 2 3 4 5 X 1 2 3 4 5 X
Area (ha) offarm sample .26 .54 .35 .32 1.0 0.5 .26 .54 .35 .32 1.0 0.5
Inputs
Fertiliser (kg) 200 250 325 175 300 506 200 250 325 225 300 526Manure (qt) 25 25 30 12 15 55 30 25 30 12 45 57Pesticide (lt) 1 1 1.5 1 1 2.2 1 1 1.5 1 1 2.2
Production (qt)
Rice 5.5 24 - 15 - 18 8 24 - - - 12.4Maize 1.1 3.1 8.2 - 42.5 22 1.5 3.6 8.5 15 44.529.6Cassava 13 6.8 19 4.5 19.2 21 13 6.8 19 4.8 19 25Cotton 1.6 4.5 0.7 1.5 12 8.2 2 5 0.9 2.5 12 9
Gross revenue R = 360 000 R = 396 700 275 000 503 200
84 000 125 000369 000 495 000
Rp 1 088 000 Rp 1 419 900
X = average or per hectare R = average gross revenue/ha (current price)Source: UACP, Bangdes Tingkat II, Blitar, 1988.
6. National Maize Production
National production of maize is presented in Tables 1.9 and 1.10. Table 1.9 shows aggregate production and Table 1.10 average yield by region. Since 1976,yield has increased significantly everywhere, showing the impact of technology.
Java accounted for about 71 per cent of national maize production in 1986. East Java is the main maize exporting region. Maize surplus also comes fromSouth Sulawesi, Nusa Tenggara and Sumatra (Lampung and North Sumatra).
Table 1.9
MAIZE PRODUCTION IN SELECTED YEARS, 1968-86, BY REGION/ISLAND (000 tons)
Region/Island 1968 1973 1978 1983 1986
Sumatra 120.2 186.1 127.1 288.2 587.7Java 2 352.7 2 690.8 3 025.1 3 656.2 4 250.9Bali + Nusa Tenggara 243.2 251.6 304.3 351.8 380.4Kalimantan 11.5 8.6 13.4 33.0 44.8Sulawesi 420.7 533.5 536.8 742.7 654.2Maluku + Irian Jaya 17.6 17.5 21.9 15.5 13.2Indonesia 3 166.0 3 688.1 4 028.6 5 077.0 5 931.1
Source: Statistical Yearbook of Indonesia.
Table 1.10
MAIZE PRODUCTIVITY IN SELECTED YEARS, 1968-86, BY REGION/ISLAND (tons/ha)
Region/Island 1968 1973 1978 1983 1986
Sumatra 0.86 1.29 1.19 1.58 1.95Java 1.02 1.14 1.40 1.81 2.15Bali + Nusa Tenggara 0.89 0.90 1.09 1.32 1.42Kalimantan 0.69 0.60 0.76 1.11 1.17Sulawesi 0.89 0.87 1.23 1.52 1.43Maluku + Irian Jaya 1.05 0.97 1.02 1.12 1.22Indonesia 0.98 1.07 1.33 1.69 1.94
Source: Statistical Yearbook of Indonesia.
National aggregate production, yield and harvested area are shown in Table1.11, together with estimated growth rate. Very high growth was achieved by
soybean, because the government tried hard to reduce imports of some 400 000tons a year. Imports were reduced to less than 200 000 tons, but in 1989 thedemand for imports rose again.
Maize production grew 2.4 per cent a year from 1983-87, much slower thanduring Pelita (five-year development plan) III (8.4%). The low growth was due to adrop in harvested area (-1.4%), which was compensated by a yield increase of3.8 per cent.
Table 1.11
HARVESTED AREA, YIELD AND PRODUCTION OF PALAWIJA CROPS, 1983-87 (PELITA IV)
Crop/Item Growth Rate Growth ratePelita III 1983 1984 1985 1986 1987 % Year
Harvested area (000 ha)Maize 2.9 3 002 3 086 2 440 3 143 2 626 -1.4Cassava 2.O 1 221 1 350 1 292 1 170 1 222 0.2Sweet pot. 0.3 280 264 256 253 229 -4.8Soybean 0.9 640 859 896 1 254 1 101 16.6Peanut 0.8 481 538 510 601 551 4.0Mungbean 4.4 293 289 286 293 227 -5.6Yield (qt/ha)Maize 5.0 16.94 17.13 17.74 18.84 19.63 3.8Cassava 0.5 99.00 105.00 109.00 114.00 117.00 4.3Sweet pot. 1.7 79.00 82.00 84.00 83.00 88.00 2.8Soybean 0.5 8.48 8.96 9.70 9.88 10.55 6.8Peanut 1.9 9.57 9.95 10.35 10.60 9.68 0.4Mungbean 3.2 6.01 6.47 6.90 7.26 7.35 5.2Prod. (000)Maize 8.4 5 087 5 288 4 330 5 920 5 155 2.4Cassava -1.2 12 103 14 167 14 057 13 312 14 356 4.7Sweet pot. 2.6 2 213 2 157 2 161 2 091 2 013 -2.3Soybean -1.8 536 769 870 1 227 1 161 23.1Peanut 0.9 460 535 528 642 533 5.6Mungbean 14.2 176 187 200 213 204 7.5
Source: Pelita V, Ministry of Agriculture, 1989.
7. Maize Consumption and Utilisation
Most maize produced is for human consumption, estimated at 59 per cent in1984. This was much smaller than the estimated 71 per cent in 1976 (Table 1.12). Yet, in absolute terms, human consumption of maize increased.
Table 1.12
MAIZE PRODUCTION, CONSUMPTION BALANCE, 1976/80/84
Growth000 Tons Rate/Year
Utilization/Suppply 1976 1980 1984 1980-1984
Total Supply 2 623 3 942 5 289 7.3Feed Industry 514 899 1 491 12.4Seed 66 65 76 3.9Industry 118 259 378 9.3Losses 52 197 204 0.9Human Consumption 1 873 2 522 3 140 5.6
kg/cap/yearHuman Consumption 14.02 17.25 19.63 3.2Rural 16.69 21.32 24.49 3.5Urban 2.18 2.70 3.07 3.2
Source: Rosenthal et al., 1987.
Based on the growth of livestock population, Simatupang made a smallerestimate of maize utilisation for feed (Table 1.13), showing also that the feedindustry grew 6.6 per cent a year between 1983 and 1988. In 1986, there were 71feed mills in nine provinces (Table 1.13) registered with the Directorate-General ofLivestock. Most are in West Java (33), East Java (10), Central Java (8) and NorthSumatra (7). Although there were only three in Jakarta, the province ranked third inproduction.
Total capacity was 304 280 tons a month. The five largest productioncapacity regions are East Java, West Java, Jakarta, North Sumatra and Lampung. But capacity utilisation was very low everywhere except Jakarta, where the figurereached 75 per cent in 1986. Elsewhere, it ranged from 10 to 50.5 per cent.
Table 1.13
FEED MILLS DISTRIBUTION, PRODUCTION CAPACITYAND ACTUAL PRODUCTION, 1986
Production (Tons/Month)Capacity
Province Number Capacity Actual Utilization %
Jakarta 3 18 450 13 850 75.0West Java 33 120 300 46 758 38.8Central Java 8 9 150 4 538 49 0Yogyakarta 2 750 190 25.3East Java 10 126 450 48 580 38.6North Sumatra 7 16 960 8 580 50.5West Sumatra 3 1 020 420 42.2Lampung 4 10 900 3 140 19.6Riau 1 300 30 10.0
Total 71 304 280 126 148 41.5
Source: Pantjar Simatupang, 1989.
The very low capacity utilisation indicates over-expansion of the feed millindustry and is reflected in the excessive average size of factories (Table 1.14). Smaller factories had a much higher capacity utilisation rate. In North Sumatra, forexample, utilisation for a small factory with capacity below 1 000 tons/month was96.7 per cent, whereas for a large factory with capacity above 3 000 tons/month itwas only 57.9 per cent. The same was true in Central and East Java. Capacityutilisation for small factories was more than twice that of the large ones.
Table 1.14
CAPACITY UTILISATION RATES FOR DIFFERENT FACTORY SIZE (%)
Production Capacity (tons/month)Provinces 1000 1000-3000 3000
Central Java 71.6 61.8 27.5East Java 42.3 24.2 21.6North Sumatra 96.7 50.0 57.9
Source: ADB consultants' team.
Over-expansion and over-size in the feed mill industry was partly caused bygovernment policies. In the early 1970s, the industry received various incentives,such as low interest rates, an overvalued exchange rate, easy credit, and freeimport of raw materials. The demand for feed also grew quickly and the industryover-expanded.
Poultry production and demand for feed then slowed down. Yet the price of feedincreased as the price of eggs and chicken fell. This probably explains the slowergrowth of maize production. Estimated growth of livestock and demand for feedare shown in Table 1.15.
Table 1.15
DEMAND GROWTH FOR MAIZE BASED ON GROWTH OF LIVESTOCK POPULATION
Livestock 1983 1986 1988 Rate of Growth %
000 Tons
Poultry 642 784 878 7.4Layer 280 358 409 4.6Pullet 70 89 102 9.1Broiler 70 89 102 9.1Local chicken 222 248 265 3.9Hog 75 67 96 5.1Dairy cow 16 27 34 22.5
Total 733 898 1,008 7.5
Source: Pantjar Simatupang, 1989.
There is little information on other industrial uses, although the InternationalFood Policy Research Institute (IFPRI) estimated an appreciable 378 000 tons wereused in 1984.
8. Farm Income, Production Cost, and Marketing Margin
The farming cost structure for East Java is shown in Table 1.16. Note the bigchange in cost components such as seed, fertiliser and wages, evidence ofincreasing adoption of technology.
The data suggests cost changes were reasonably in line with production andproductivity. Yield increased by 5.7 per cent a year, prices by 10.8, and costs by16.8 per cent. The resulting surplus (net farm income) grew 15.4 per cent a year(current price). If inflation was an annual average 10 per cent, it means incomegrowth of 5.4 per cent. Note also that the revenue/cost ratio declined.
There is no serious marketing problem in East Java, which is considered thenational maize granary and has a direct link to both the deficit and surplus regionsas well as export outlets.
Tab
le 1
.16
PR
OD
UC
TIO
N A
ND
CO
ST
ST
RU
CT
UR
E O
F M
AIZ
E F
AR
MIN
G,
EA
ST
JA
VA
, 197
8-86
Pro
duct
ion/
Cos
t19
7819
7919
8019
8119
8219
8319
8419
8519
86G
row
th%
yea
r
Pro
duct
ion
(kg/
ha)
1299
1483
1530
1601
1677
1799
1827
1984
2051
5.7
Pric
e (R
p/kg
)56
8274
8711
710
810
712
413
510
.8-
Rp.
ha -
Val
ue o
f pro
duce
7 28
7812
205
711
3 03
113
8 58
319
6134
1948
5019
6060
2450
7727
6005
16.4
Cos
t of p
rodu
ctio
n2
5183
2 03
0541
938
45 2
1961
971
6390
349
422
7966
210
0392
16.8
See
d20
4328
554
176
3 83
546
9344
0442
0454
8062
3014
.0F
ertil
iser
6539
5950
10 2
9912
585
1650
016
534
1301
020
529
2354
416
.0P
estic
ide
119
7715
812
620
627
421
063
048
515
.3W
ages
1 41
031
0075
23 5
3324
288
3312
535
710
2625
138
434
5586
216
.5O
ther
s23
7913
483
772
4 38
574
5169
8157
4714
589
1427
120
.9S
urpl
us(2
-3)
4 76
9510
175
271
093
93 3
6413
4163
1309
7414
6638
1654
1517
5613
15.4
R/C
1 2/3
2.9
6.0
2.7
3.1
3.2
3.0
4.0
3.1
2.7
8.32
Cos
t/uni
t 3/1
19.4
13.7
27.4
28.2
37.0
35.5
27.0
40.1
48.9
11.9
Sou
rce:
CB
S, S
truk
tur
Ong
kos
Usa
hata
ni P
adi d
an P
alaw
ija, 1
978-
1986
. 1
Rev
enue
/cos
t. 2
Neg
ativ
e du
e to
hig
h va
lue
in 1
979
.
Table 1.17 shows the cost structure from farm level to wholesale level, aspresented in the IFPRI study for selected regions. When net farm profit is considered,hybrid maize was much more profitable, and for the wholesaler too. Yet the IFPRIteam found hybrid was not specially profitable as an export. This will be discussed inChapter II.
Table 1.17
COST STRUCTURE OF MAIZE PRODUCTION AND MARKETING, 1985 (CURRENT PRICES)
Price of Output Production CostRegion Yield Farmgate Wholesale Current Labour Land Other Total
Input Cost Rent ProdCost
(kg/ha) Rp/kg Rp/ha
Open-pollinated
West Java 1725 137.70 158.98 30645 87303 78721 21613218282Central Java 1999 137.11 166.73 26240 66786 78721 35437207184East Java 1904 128.72 144.31 26171 72968 78721 17636195496Bali + N. Tenggara 1382 130.87 182.90 6478 68675 37056 14108126317Sumatra 1863 113.83 169.55 22032 90790 37056 19152169030Sulawesi 1510 133.19 134.32* 4518 86634 37056 9722137930Kalimantan 1147 153.42 197.26 9796 60788 37056 25029132669
HybridCentral Java 3500 137.11 166.73 47075 128501 132726 11287 319589East Java 3500 128.72 144.31 45507 128501 132726 11018317752Sulawesi 3500 133.19 134.32 46767 128501 71823 14042261133
* The very small difference between farm-gate and wholesale price is difficult to understand, particularly since South Sulawesi is asurplus region.
Processing Total Net Financial ProfitRegion & Marketing Cost Farmgate Wholesale
Cost
Rp/ha
Open-pollinatedWest Java 26 307 244 589 19 250 29 652Central Java 37 142 244 326 66 899 88 967East Java 38 080 233 576 49 587 41 190Bali & N. Tenggara 35 130 161 447 54 393 91 321Sumatra 36 925 205 955 43 035 109 917Sulawesi 42 658 180 588 63 187 22 235Kalimantan 21 507 154 176 43 304 72 081Hybrid Central Java 65 030 384 619 160 296 198 936East Java 70 000 387 752 132 768 117 333Sulawesi 98 875 360 008 205 032 110 112Source: Rosenthal et al., 1987.
Table 1.18 shows the ratio between farmgate and wholesale financial profit andprice, and between wholesale and onfarm cost, based on data in Table 1.17. Themarketing cost is reasonable, ranging from 12.1 to 30.9 per cent of onfarm cost. But
the farmer's profit margin is really low compared with the wholesaler's, except for openpollinated maize in East Java and Sulawesi, and for hybrid maize in Central and EastJava.
Table 1.18
ONFARM AND MARKETING COST RATIO, AND RATIO BETWEENFARMGATE AND WHOLESALE MARGIN AND PRICE
Wholesale/Onfarm Farmgate/WholesaleRegion Cost Ratio Profit Ratio Price Ratio
Open-pollinatedWest Java 12.1 64.9 68.6Central Java 17.1 75.2 82.2East Java 19.5 120.4 89.2Bali & Nusa Tenggara 27.2 59.6 71.6Sumatra 21.8 39.2 67.1Sulawesi 30.9 284.2
* 99.3
*
Kalimantan 16.2 60.1 77.8
HybridCentral Java 20.3 80.1 82.2East Java 22.0 113.2 89.2Sulawesi 37.9 186.2* 99.2
*
Source: calculated from data in Table 1.17.* apparent data flaw.
Note also the relatively large profit with hybrid compared with open pollinatedmaize shown in Table 1.17. This is due to high productivity. But in Table 1.17 we didnot distinguish between traditional and open pollinated modern varieties like Arjuna,the productivity of which differed little from hybrid.
II. MAIZE RESEARCH, TECHNOLOGY DEVELOPMENT AND DIFFUSION
1. Research Organisations
As mentioned in Chapter I, food crops (particularly palawija) are producedexclusively by smallholders. Research is mainly carried out by government institutions,mostly within the Ministry of Agriculture.
Before 1974, research was split up between various directorates-general: of FoodCrops, of Estate Crops, of Fisheries, of Animal Husbandry and of Forestry (now theMinistry of Forestry). Then the Agency for Agricultural Research and Development(AARD) was founded with national responsibility for research.
AARD has 10 research centres (Fig. 2.1), one of which is the Central ResearchInstitute for Food Crops (CRIFC). This coordinates research on food crops in sixinstitutes, which represent the major agro-climatic conditions and each of which has aspecial task:
- Bogor Institute for Food Crops (BORIF), at Bogor, WestJava (pioneer research).
- Sukamandi Institute for Food Crops (SURIF), at Sukamandi, West Java (irrigated land).
- Malang Institute for Food Crops, in Malang, East Java (palawija crops).
- Maros Institute for Food Crops (MORIF), in Maros, South Sulawesi (dry land indry climates).
- Banjarbaru Institute for Food Crops (BARIF), at Banjarbaru, South Kalimantan(swamp and tidal swamp eco-system).
- Sukarami Institute for Food Crops (SARIF), at Sukarami, West Sumatra (dryland in wetter climate).
Maize research is chiefly conducted by AARD, particularly the CRIFC. Othercentres within AARD also research into maize, such as the centres for Soil, Agro-Economic and Animal Husbandry Research.
Beyond AARD, several government agencies carry out research on maize,including the universities, the Centre for Biotechnological Research (under theIndonesian Institute of Science, LIPI), the Agency for Appropriate TechnologyDevelopment (under the Ministry of Research), the National Agency for Atomic Energyand the National Agency for Logistics (BULOG).
Some private companies, particularly Cargill, Pioneer, and Bright Indonesia SeedIndustry (BISI), also conduct field trials for hybrids developed in Thailand and thePhilippines. Pesticide and fertiliser companies carry out trials with CRIFC.
The figure 2.1 (Organization Structure of the Agency for Agricultural Research andDevelopment) is not reproduced due to technical reason. Please consult technicalreason.
2. Research Coordination
a. Coordination within CRIFC
CRIFC and its institutes have improved research methods, planning and resourceallocation and the central institute organised the first workshop on the NationalCoordinated Research Program on Corn and Grain Legumes in Bogor attended by 150people in June 1988. The workshop aimed to:
- update knowledge on maize's status, production systems and cultivation practices.
- agree on main constraints to maize production and on research priorities.
- exchange news about research.
- improve the National Coordinated Corn Research Program (NCCRP) and its organisation.
An annual workshop will review the achievements, constraints and priorities of theNCCRP.
The first workshop produced a booklet, "National Coordinated Research Program:Corn," designed as a guide for institutes, universities and researchers. Researchinstitutes within CRIFC have been asked to draft detailed 3-5-year national and regionalresearch plans. The NCCRP is managed by the National Corn Coordinator (NCC)assisted by the National Inter-disciplinary Corn Team (NICT) within CRIFC andsupervises and evaluates maize research. An ICT at each institute does the same work.
b. Coordination with Universities and Institutes Outside AARD
In addition to AARD's core budget, maize research is backed by special projectsfunded by donor agencies or countries, multilateral aid programmes or internationalresearch organisations. An example is the Applied Agricultural Research Project (AARP)funded by USAID, a project with AARD and the directorate-general for Higher Education. It involves three commodity research projects (upland rice, maize, grain legumes) and aspecial study. For each, a team of researchers from AARD, the university andrepresentatives of the DG of Food Crops evaluates and advises on the projects and theirimplementation. The teams are chaired by the NCC.
c. Ties with Foreign Institutes
Arrangements for training, research cooperation and exchange of information,technology and germplasm have been made with the International Maize and WheatImprovement Center (CIMMYT), IRRI Cropping System Network, FAO/UNDP (ProjectRAS/82/002 TCDC for Research and Development of Food Legumes and Coarse Grainsin the Tropics and Sub-Tropics of Asia), the Dutch government and USAID. There is alsocooperation between the NCCRP and CIMMYT, which provides germplasm not only from
the CIMMYT breeding programme but also from national programmes, particularly inAsian countries. The NCCRP participates in this, especially for testing CIMMYTmaterials, such as in IPTT, EVT, ELVT, OPTT, and Al tolerant materials.
CIMMYT also puts out useful publications and provides training in Mexico andelsewhere. CIMMYT staff visit the country and tour institutes, on- and out-station trials,on farm research, farmers' fields, seed industries and, in the case of on farm research,also conduct field surveys. Sometimes it provides research equipment, such as pollentesters, ear bags and grain moisture testers, as well as some funding for trials.
The germplasm CIMMYT provides is good, but so far none has been directlyreleased as a variety because it lacks one or more important traits, such as downymildew resistance and tight husk cover. Potential germplasm needs to be efficiently usedin the national programme through critical evaluation, adaptation to local conditions orincorporation in the national gene pools. Some CIMMYT germplasm, along with localcollection and materials from national programmes, have been used in development ofIndonesian gene pools, from which high-yield varieties were generated and released in1985. The national programme cannot use CIMMYT germplasm more effectively for lackof cash and facilities.
d. Linkage with Private Sector
National fertiliser factories and foreign companies producing and selling pesticideshave cooperated in field trials because without certification no pesticide can be sold. Technology for intensification is often devised with private companies, especially in thecase of new chemicals, such as growth-stimulating materials.
Maize seed companies began to operate in Indonesia in the 1980s and made linkswith CRIFC. They were Cargill, BISI (Bright Indonesia Seed Industry), Pioneer, Ciba-Geigy, Pacific Seeds, and San Miguel. Their breeding research stations are in Thailandand the Philippines. The promising hybrids developed there are further tested inIndonesia for possible release. Cargill, BISI, Pioneer, and Pacific Seeds have releasedand produced commercially their own hybrids in Indonesia. Ciba-Geigy has recentlystopped seed research and concentrates more on pest management research. SanMiguel has not so far been active while BISI is now producing seeds of open pollinatedvarieties released by AARD and is the only private company that produces them inaddition to their own hybrid.
3. Research Goals
According to the Master Research Plan (1989-94), CRIFC has the following aims:
- strive for food self-sufficiency and improve nutrition. - improve the balance of payments through increased
agricultural exports and reduction of farm imports.- improve use of soils, water and forests.- increase job opportunities and rural income.- promote regional and rural development.
- give guidance to research through a national researchprogram involving:- rice- palawija (maize, wheat, sorghum, grain legumes,
soybean, mungbean, pigeonpea, cassava and sweet potato)- problem soils (low pH, swampy eco-system, deficiency etc)- water management- post-harvest technology- agricultural engineering- farming systems- seed production and technology- socio-economic and environmental impact- biotechnology- germplasm
As noted, the programmes are supervised and coordinated by the CRIFC andcarried out by six research institutes for food crops.
For maize research, the aims are summarized in Figure 2.2, based on the CRIFCMaster Research Plan. Special attention is given to the feed industry (especially poultryand aquaculture), which bolsters domestic demand for maize. The feed industry isgrowing by about 10 per cent a year. Most of its soybean requirements are met byimporting soybean cake, a by-product of soybean oil.
Fig
ure
2.2
RE
SE
AR
CH
PR
OG
RA
MM
E F
OR
MA
IZE
AN
D E
XP
EC
TE
D O
UT
PU
T, 1
989-
94
Mai
n A
ctiv
ities
Prin
cipl
e R
esea
rch
Titl
esJu
stifi
catio
nE
xpec
ted
Out
put
Dur
atio
nE
xecu
ting
inst
itutio
n
Ger
mpl
asm
Var
ieta
l In
trod
uctio
n an
d C
olle
ctio
nG
enet
ic v
aria
bilit
y is
aA
wid
e ge
netic
var
iabi
lity
5 ye
ars
BO
RIF
,SU
RIF
,MA
RIF
Impr
ovem
ent
basi
s fo
r su
cces
sful
of g
enet
ic m
ater
ials
.M
OR
IF,B
AR
IF, S
AR
IF
Hyb
ridis
atio
nH
ybrid
isat
ion
is v
ery
im-
Pro
geny
pop
ulat
ion
con-
5
year
sB
OR
IF,S
UR
IF, M
AR
IF
port
ant i
n co
mbi
ning
goo
dsi
stin
g of
sup
erio
r pl
ans
MO
RIF
, SA
RIF
fere
nt p
aren
t.lo
ped
for
new
var
iety
.
Scr
eeni
ng &
sel
ectio
n fo
r:T
here
is a
nee
d to
hav
eIm
prov
ed li
nes/
varie
ties.
5 ye
ars
BO
RIF
,SU
RIF
, MA
RIF
-
yiel
d po
tent
ial
impr
oved
var
iety
sho
win
gM
OR
IF,B
AR
IF,
SA
RIF
-
pest
s, d
isea
ses
re-
high
yie
ld a
nd r
esis
tant
sist
ance
.to
pes
ts a
nd e
nviro
n--
spec
ific
envi
ronm
enta
lm
enta
l str
ess.
stre
ss to
lera
nce.
- hi
gh q
ualit
y se
ed
Mul
tiloc
atio
nS
elec
ted
lines
nee
d to
Impr
oved
line
s re
ady
for
5 ye
ars
BO
RIF
,SU
RIF
, MA
RIF
be
furt
her
test
ed u
nder
varie
tal r
elea
se.
MO
RIF
,BA
RIF
, S
AR
IF
diffe
rent
env
ironm
ent.
Fig
ure
2.2
(con
td...
)R
ES
EA
RC
H P
RO
GR
AM
ME
FO
R M
AIZ
E A
ND
EX
PE
CT
ED
OU
TP
UT
, 198
9-94
Mai
n A
ctiv
ities
Prin
cipl
e R
esea
rch
Titl
esju
stifi
catio
nex
pect
ed o
utpu
tdu
ratio
nex
ecut
ing
inst
itutio
n
Cro
p an
d re
sour
ceS
oil a
nd n
utrie
ntE
ffici
ent u
se o
f fer
ti-A
ppro
pria
te fe
rtili
satio
n5
year
sB
OR
IF,S
UR
IF, M
AR
IF m
anag
emen
tM
anag
emen
t:lis
ers
and
effe
ctiv
e so
ilan
d so
il m
anag
emen
t to
MO
RIF
,BA
RIF
, S
AR
IF
- ag
rono
mic
asp
ect
man
agem
ent i
s ne
eded
.ha
ve h
igh
corn
yie
ld.
- ph
ysio
logi
cal a
spec
t
Cro
p m
anag
emen
t:B
ette
r cu
ltiva
tion
prac
-Im
prov
ed te
chni
que
in5
year
sB
OR
IF,S
UR
IF, M
AR
Ifa*g
rono
mic
asp
ect
tices
are
nee
ded
for
high
cultu
ral p
ract
ices
.M
OR
IF,B
AR
IF,
SA
RIF
-
phys
iolo
gica
l asp
ect
prod
uctio
n of
mai
ze.
Wat
er m
anag
emen
t(T
o be
des
crib
ed u
nder
MA
JOR
PR
OG
RA
MM
E: W
AT
ER
MA
NA
GE
ME
NT
Cro
p pr
otec
tion:
Pes
ts a
nd d
isea
ses
very
Bet
ter
pest
s co
ntro
l for
5 ye
ars
BO
RIF
,SU
RIF
, MA
RIF
-
pest
s an
d di
seas
esm
uch
redu
ce th
e yi
eld.
seed
fly,
ste
m b
orer
,M
OR
IF,B
AR
IF,
SA
RIF
st
orag
e pe
sts,
dow
nym
ildew
.O
n-fa
rm r
esea
rch
Tec
hnol
ogic
al p
acka
geB
ette
r pa
ckag
e of
tech
no-
5 ye
ars
BO
RIF
,SU
RIF
, MA
RIF
sh
ould
be
form
ulat
ed n
otlo
gy w
hich
has
bee
n te
sted
MO
RIF
,BA
RIF
, SA
RIF
only
bas
ed o
n re
sear
chun
der
farm
ers'
con
ditio
n.st
atio
n bu
t als
o on
farm
ers
field
.
Sou
rce:
CR
IF M
aste
r R
esea
rch
Pla
n, 1
989-
94.
dan
Pal
awija
, 197
8-19
86.
1 R
even
ue/c
ost.
2 N
egat
ive
due
to h
igh
valu
e in
197
9.
4. Research Results and Contributions
a. Improved Open-Pollinated Varieties
Twenty-four open-pollinated varieties have been released by the CentralResearch Institute for Food Crops since the breeding programme started in 1923(Table 2.1).
Table 2.1
RELEASED MAIZE VARIETIES BEFORE 1945 TO 1985
Average Downy3
Variety Base Year Maturity Yield MildewReleased Material (days) (t/ha) Reaction
Kuning Landrace Before 1945 110 1.12 SJawa Timur Kuning Landrace Before 1945 85 1.02 MRMaya Landrace Before 1945 95 1.12 SGenjah Warangan Landrace Before 1945 80 0.82 SBastar Kuning Landrace 1951-60 130 3.3 SKania Putih Introduced 1951-60 150 3.3 -Penduduk Ngale Landrace 1951-60 85 0.82 SMalin Introduced 1951-60 100 3.0 SPerta Introduced 1956 110 1.72 SMetro Introduced 1956 110 3.2 SHarapan Introduced 1964 105 3.3 SBima1 Introduced 1966 140 3.7 SPandu1 Landrace and 1966 130 3.7 S
IntroducedPermadi (Bogor Landrace and 1966 96 3.3 SSynthetic 2) IntroducedBogor Composite 2 Introduced 1969 105 3.6 SHarapan Baru Introduced 1978 105 3.6 RArjuna Introduced 1980 90 4.3 RBromo Introduced 1980 90 3.8 RParikesit Introduced 1981 105 3.8 RSadewa Landrace and 1983 86 3.7 MR
IntroducedNakula Landrace and 1983 85 3.6 R
IntroducedAbimanyu Landrace and 1983 80 3.3 R
IntroducedKalingga Landrace and 1985 96 5.4 R
IntroducedWiyasa Landrace and 1985 96 5.3 R
Introduced
1 Variety for high elevations.2 Unfertilised/fertilised at very low level.3 S = susceptible. MR = Moderately resistant. R = resistant. - = no data from DM nursery, thought to be susceptible.Source: Subandi et al., 1987.
Several conclusions can be drawn from the table:
- before independence in 1945, the released varieties, derived fromlandraces, had low yield and were susceptible to downy mildew.
- from 1950-77, most varieties released showed a higher yield (3.0-3.7tons/ha) but were late maturing and susceptible to downy mildew. Mostderived from introduced materials.
- from 1978, the released varieties were derived from both landraces andintroduced materials. They vary in maturity, have higher yields (3.3-5.4tons/ha), and are resistent to downy mildew.
- earliness, high yield potential and resistance to downy mildew can becombined in one variety.
- between 1964-80, yield potential increased by 36 per cent. This was shownby Arjuna, which was derived from introduced materials.
- through development of a gene pool, combining landraces and introduced materials, between 1980-85, yield potential further increased by 24 per cent.
This was shown by Kalingga.
- between 1964-85, annual increase in yield potential with open-pollinatedvarieties was 2.9 per cent. If maturity is considered, this changes to 3.1 percent.
Comparative performance in yield and downy mildew resistance of varietiesreleased since 1964 is shown in Table 2.2.
Tab
le 2
.2
SU
PE
RIO
R V
AR
IET
IES
FO
R L
OW
ELE
VA
TIO
N, A
FT
ER
196
Yea
rP
erio
dV
arie
tyof
Mat
urity
Rel
ated
yie
ldD
owny
mild
ew in
fect
ion
rele
ase
(day
s)(%
)
Bef
ore
Har
apan
1964
105
100
100
100
100
100
--
--
8878
8170
6970
65P
ELI
TA
Per
mad
i19
6610
010
166
PE
LIT
A I
Bog
orco
mpo
site
219
6910
010
863
PE
LIT
A II
Har
apan
Bar
u19
7810
510
811
118
1513
1513
PE
LIT
A II
Ipa
rikes
it19
8110
511
615
Arju
na19
8090
136
136
136
136
136
1712
Bro
mo
1980
9011
712
214
Sad
ewa
1983
8511
845
Nak
ula
1983
8511
526
Abi
man
yu19
8380
110
PE
LIT
A IV
Wiy
asa
1985
9615
820
Kal
ingg
a19
8596
160
14nu
mbe
r of
tria
ls41
3343
1511
389
724
45
810
103
1
Sub
andi
et a
l., 1
987.
b. Hybrid Varieties
Hybrid development was once just a sideline. A more consistent programme wasset up in 1982, but so far CRIFC has not released any hybrid. The top crosses andsingle crosses developed in the 1950s gave high yield but were no higher than the open-pollinated variety Perta, except that the hybrids had harder endosperm and more uniformgrain colour and size. The top crosses and single crosses developed in the 1960syielded 40 per cent more than Harapan, but conditions did not permit work to continue atthe time. The hybrids (top crosses and single crosses) of lines developed in 1970syielded 20 per cent higher than Arjuna, but still lower than hybrid C-1. Some lines whentop-crossed to C-1 (F2) and Pool 4 could produce 20-35 per cent more grain than hybridC-1.
The CRIFC lines were derived from varieties with yield capacity lower than varietiesreleased later, such as Perta, Arjuna or Kalingga. Nevertheless, CRIFC hybridsdeveloped from these lines did show higher yield capacity compared to the basepopulation. Before the lines were yield tested in hybrid combinations, open-pollinatedvarieties derived from introduction or pool development (Perta, Arjuna, Kalingga with yieldcapacity higher than the base populations of the lines) had been identified and released.When the CRIFC hybrids reached the preliminary yield test, an introduced high yieldhybrid (TC 63.85 from Cargill) was identified and released under the name hybrid C-1.
CRIFC helps in testing hybrids developed by private companies. The first hybridreleased and available in the market was Hybrid C-1, which yielded, on average, 5.8tons/ha at experimental level and 6 tons/ha at demonstration level in various provinces. The release of this hybrid was followed by others from companies and institutes (Table2.3). All the hybrids are late maturing.
c. Varietal Distribution
Table 2.4 shows varietal distribution in 1985/86 and 1986/87. The releasedvarieties were planted on 30 per cent of the reported area. Twenty per cent was plantedto Arjuna. Hybrids, mostly C-1, shared only 2.97 per cent. Because maize is a cross-pollinated species, the germplasm of the released varieties tend to cross with local(traditional) varieties, resulting in impure (and hence increased yield capacity) localvarieties.
Among the released varieties, Metro, Harapan, Harapan Baru, and Arjuna are quitepopular. Arjuna is most widely grown because it is early, high yielding, resistant to downymildew and reasonably promoted in the government intensification programme. Twoyears after their first release and availability in the seed market, the hybrids shared only10 per cent of the improved varieties used by farmers. The low rate of hybrid adoption byfarmers is mainly due to high seed price. Other factors influencing adoption of hybridvarieties are yield potential, stability and maturity of the hybrid itself, seed availability, therisk of growing hybrids, guarantee of selling the product and farmer's profit. The price of
hybrid seeds in East Java in 1988 was Rp 2 600/kg compared with Rp 1 300/kg for open-pollinated seeds.
Table 2.3
RELEASED HYBRID MAIZE, 1983-88
Average Downy1
Variety Type of Company/ Year Maturity Yield MildewHybrid Institute Released (days) (t/ha) Relation
Hibrida C-1 TC Cargill 1983 100 5.8 RHibrida Pioneer-1 TWC Pioneer 1985 100 5.5 RHibrida CPI-1 TC BISI 1985 100 6.2 RHibrida Pioneer-2 TWC Pioneer 1986 100 5.9 RHibrida IPB-4 SC Bogor
Agric. 1985 97 5.4 R UniversityHibrida C-2 TWC Cargill 1988 97 6.3 R
R = resistant.Source: Subandi et al., 1989.
Table 2.4MAIZE VARIETAL DISTRIBUTION1, 1985-87
Seed2
Variety 1985/86 1986/87 Supply (MT)1986/1987
Bastar Kuning - 0.12 35Metro 1.1 0.44 130Harapan 3.1 2.82 833Permadi 0.02 - -Bogor Composite 2 0.001 - -Harapan Baru 2.2 2.53 748Arjuna 18.0 20.36 6,017Bromo 0.2 0.28 81Parikesit 0.1 0.14 41Sadewa 0.01 0.02 6Nakula 0.02 0.17 50Abimany 0.01 0.02 6Kalingg - 0.02 6Wiyasa - 0.0003 -C-1 (hybrid) 1.9 2.44 721CPI-1 (hybrid) 0.00006 0.35 122Pioneer (hybrid) - 0.16 47IPB-4 (hybrid) - 0.02 6Local 73.34 70.11 20 719Total Reported 100 (1 591 900 ha) 100 (1 477 572 ha) 29 5511 Source: Directorate of Food Crops Production.2 Estimated, based on 20 kg seed/ha.
d. Varietal Performance at Farm Level
At experimental level, yields of new open-pollinated varieties range from aroundfour tons/ha to more than five, depending on maturity, compared with six for hybrids. Yields are generally less at field level, depending on the land, season, facilities andmanagement. Some examples of yields at farmer's field level, which could be consideredas potentials, are:
- a special project on maize cropping in 1981 in East Nusa Tenggara, covering40- 50 000 ha of land planted to Arjuna (90 days), was reported toyield an average 3 tons/ha, or 71 per cent of the experimental yield level.
- the Bright Indonesia Seed Industry at Kediri, East Java, produced seeds incooperation with farmers.It was reported in 1984/85 that 760 ha of Arjuna(involving 2 265 farmers) gave an average yield of 4.29 tons/ha, or 100 percent of the experimental yield level (Banjerd Bonsue, personalcommunication).
- one private company at Sukabumi, West Java, produced seeds of Arjuna and Wiyasa in 1988. From 150 ha, the yield ranged from 3.9-5.4 tons/ha.
(Iskandar S., personal communication).
- a survey on the government intensification program in Central Java(Banjarnegara, Blora) and East Java Bojonegoro, Lumajang, Kediri) in thedry and wet seasons of 1984/85 indicated that on dryland, rainfed wetlandand irrigated wetland, Arjuna yielded 3.55, 3.50 and 4.40 tons/hacompared to hybrid C-1's 3.55, 3.85 and 4.70 tons/ha.
- the hybrid out-yielded open-pollinated only by less than 400 kg/ha (about 10per cent) and it was shown only on wetland where the moisture problem isgenerally less severe than on dry land.
This data shows that 70-100 per cent of yield potential at experimental level could
be realised by farmers for open-pollinated varieties, but only 60-80 per cent for hybrids. Thus more effort is needed to grow hybrids. So truly superior hybrids should be furtherdeveloped and planted in highly-productive land with proper management to competewith existing open-pollinated varieties.
e. Increase in National Production and Productivity
Through the government intensification programme, production technology(including use of superior varieties) has been increasingly adopted by farmers. Soresearch has helped boost national production and productivity. Annual maizeproduction grew from 2.73 million tons in Pelita I to 5.10 million in Pelita IV (Table 2.5),while the national average yield increased from 1.08 tons/ha in 1973 to 1.94 in 1986.
Table 2.5
HARVESTED AREA AND PRODUCTION PER YEAR OF MAIZEPELITA I - IV
HarvestedPelita Area Production Yield
(ha) (tons) (t/ha)
I 2 723 629 2 734 354 1.00II 2 559 582 3 131 532 1.22III 2 672 529 4 086 000 1.53IV 2 859 442 5 182 000 1 81
Central Bureau of Statistics (CBS) and Directorate- General of Food Crops.
5. Support Facilities, Manpower and Budget
a. Research Facilities
Breeding facilities are mostly at Bogor and Sukamandi, mainly for rice. BogorResearch Institute (BORIF), which is supposed to handle pioneer research, needs moremodern equipment and facilities. Because most equipment cannot be produceddomestically, foreign grants or loans are important.
Recently, the Japanese International Cooperation Agency (JICA) provided a newbuilding for biotechnology research within CRIFC, but the equipment and manpower areinsufficient, especially where modern biotechnological instruments are concerned.
The six research institutions within CRIFC also have 45 experimental stations withenough facilities for field experiments. The experimental farms total over 2,000 ha.
b. Manpower Resources
Most maize research is done within CRIFC's institutes by about 76 of its ownresearchers. Of these, only 27 are full-time, and of these, five have Ph.Ds, nine MScdegrees and the other 13 Ir degrees (equivalent to BS).
The 49 part-time workers usually spend less than half their time on maize research. In this group, seven have Ph.Ds, 12 MS degrees and 30 Ir degrees.
Indonesia's maize area fluctuates around 2.7 million ha and production systemsvary. Most is planted in low productivity areas by small farmers. If maize is to bepromoted to meet increasing domestic demand for food and to supply the feed industryand increase exports, the number of researchers is inadequate, apart from the questionof quality and support facilities.
In addition to AARD's researchers, scientists from other institutions (such asuniversities) also spend time on maize, but only temporarily. Only a few researchers fromprivate companies are working on maize.
c. Financial Resources
AARD draws its budget from both domestic and external sources. The domesticcomponent comprises routine and development budgets. Before 1985/86, the externalfunding was not used for research and it was hard to break it down into commoditycomponents. CRIFC's 1984/85 external financing was 3 million US dollars. Thedomestic budget was analysed to determine the share of the palawija crop researchprogram. An estimate was made for maize and sorghum research components(sorghum had only a small portion), shown in Table 2.6.
Of $962,000 allocated to maize and sorghum, only 12 per cent was really used forresearch. The rest went for salaries (54 per cent), maintenance of facilities (3 per cent),capital (19 per cent) and other items (12 per cent). So the 1984/85 budget for maize andsorghum that went to research was only $115,440.
Table 2.6
MAIZE AND SORGHUM SHARE IN CRIFC'S AND AARD'SDOMESTIC BUDGET, 1984/85
Amount of BudgetBudget Source, Commodity/Institute US$000 %
RoutineMaize & Sorghum 358 4.5Non-Rice Food Crops 919 11.7CRIFC Budget 2 131 27.2AARD Budget 7 833 100.0
DevelopmentMaize & Sorghum 604 4.2Non-Rice Food Crops 1 548 10.7CRIFC Budget 3 687 25.4AARD Budget 14 493 100.0
Routine and DevelopmentMaize & Sorghum 962 4.3Non-Rice Food Crops 2 467 11.0CRIFC Budget 5 818 26.0AARD Budget 22 326* 100.0
* excluding $10,798 for estate crops and sugarcane.Source: AARD, 1984.
6. Technology Capability and Infrastructure
Technological capability in the research centre, where maize is concerned, isadequate for transfer to the ultimate users, the smallholders. But when policy is moregeared to exports, greater research manpower and capability will be vital. Let us limitourselves to economic infrastructure, particularly transport, farm supplies distribution andthe seed industry.
a. Economic Infrastructure
Adequate roads and transport are prerequisites for economic development. Butinvestment in roads is expensive and long-term, and cannot depend on narrow economicinterests such as maize production.
Infrastructure varies greatly between regions. The highest fertiliser distribution costmargin is about twice the lowest one (Table 2.7).
Table 2.7
UREA DISTRIBUTION COST AND FACTORY PRICE, 1988
Volume Distribution Factory Subdsidized1 RatioFactory (MT) Cost Price Farm Price 2/4
(Rp/MT) (Rp/MT) (Rp/kg)
PT PUSRI 1 108 941 86 354 342 279 135 000 0.64PT KUJANG 450 000 44 812 300 737 135 000 0.33PT KALTIM 650 000 99 688 355 612 135 000 0.74PT PIM 440 000 92 203 348 014 135 000 0.68
1 From October 1988, the subsidised price was Rp 165/kg and since October 1989 Rp 185/kg.Source: Studi/Analisa Penghapusan Subsidi Pupuk dalam Pelita V, Center for Agro-Economic Research, 1988.
The low distribution cost for Kujang Factory is due to it's being in West Java wheremost of its customers are. Distribution costs are about double outside Java. Note alsothe high distribution cost relative to the retail (subsidised) price. Such high costs arereflected as well in the high margin between farm-gate, wholesale and export prices(f.o.b) shown in Table 2.8. International comparisons of margins are shown in Table 2.9.
Table 2.8
MAIZE MARKETING MARGINS (RELATIVE)
South Sulawesi
East Java SouthSulawesi
SouthSulawesi
East Java
Market Point Lampung19701 19712 19663 19684 East Java 19716
19725
Farm Price 100 100 100 100 100 100Middlemen Price 160 131 133 - 151 -Export Price 189 188 250 180 206 189
1 Karim; 2 Harsono et al.; 3 Atje; 4 Abdul Karim Hamid;5 Mubyarto et al.; 6 Moh. IksanSemaoen.Source: Proceeding, Indonesian Corn Commodity System, First Agribusiness Seminar-Workshop, SEARCA-HARVARD Project, 1975.
Table 2.9
MAIZE MARKETING MARGINS (RELATIVE) IN SELECTED COUNTRIES, 1974
Market Point Thailand1 Philippines2 United States3
Farm price 100 100 100Wholesale price 139 119 108Export price 149 (143)4 122
1 SEARCA; 2 SEARCA; 3 USDA; 4 Retail price.Source: Proceeding, SEARCA-HARVARD Workshop, 1976.
The situation seems to improve when we compare the data in Table 1.18, where theratio between farm-gate and wholesale price was 113 percent for East Java in 1986.
Note the very efficient market margin in the United States. Middleman prices in EastJava in 1971 and 1966 were comparable with Thailand (an exporter), but export priceswere very much higher. It suggests the need to reduce port-entry. 1 The government hasbegun deregulation in trade, investment and banking, which greatly helps exportcapability. This will also help when the maize export phase is reached. The highmarketing margin alone probably justifies the high fertiliser subsidy to Indonesianfarmers.
b. The Seed Industry
The seed industry is developing fast in Indonesia, particularly in connection with therice intensification programme. Without seed availability, it is hard to talk aboutagricultural development.
For rice, the government has created a firm, Perum Sang Hyang Seri, in West Java,with a 2,000 ha irrigated seed production farm, part of it shared with local farmers. SangHyang Seri has a large and modern seed processing unit, combine harvesters and largetractors for land preparation.
Indonesia has also set up a National Seed Board chaired by the Director-General ofFood Crops and supported by the food crop research institutes under CRIFC.
More and more private firms are entering the flourishing seed industry, apart fromgovernment agencies and cooperatives such as PT Pertani, KUD, Patra Tani Ltd., PTCargill, farmers as seed growers, and the increasing number of seed shops and seeddealers.
Perum Sang Hyang Seri has contracted with PT Cargill to produce hybrid seeds,while Pioneer and BISI have begun hybrid seed production in East Java for maize. Butthe seed industry for maize is just beginning.
In Table 2.4, which shows the estimated volume of seeds supply for maize, theshare of traditional varieties was dominant (70 percent) in 1986/87. C-1 hybrid had thehighest share among hybrids, while Arjuna had 20 per cent. Farmers generally useArjuna seed from their own farm, especially when they plant maize in wet and dryseasons, or get them from their neighbours. So seed sales may be far below theestimated 6,000 tons a year. Some seed companies push sales in East Java, withincentives to extension workers, seed credit to be paid after the harvest, sponsorship ofbudgets for field verification trials, and cooperation with local agricultural agencies andwith research institutions.
More about the seed industry in Indonesia has been written by Sihombing in theProceedings of the First FAO/DANIDA Seminar on the Design and Implementation ofSeed Programmes, Islamabad, 1985.
7. Diffusion of Technology to Producers
For developing countries in general, diffusion of technology is always a greatproblem - huge production areas, the large number of smallholders to communicate withand poor infrastructure. Yet the problem is not insurmountable, as Indonesia's successfulrice production programme shows. Since independence, Indonesia has been striving forrice self-sufficiency, starting with a massive intensification programme in 1959. Theprogramme worked with small pilot projects, but problems came with large-scaleimplementation.
The first success was in the late 1970s after introduction of IR varieties and betterextension and technological capability of researchers and programme workers. Thenbrown planthopper disease broke out and threatened the "miracle" rice varieties. But itspurred rapid development of research into pest management and plant breeding. By1984, Indonesia was self-sufficient in rice and could boast leadership in rice technologyamong developing nations. The success of the rice intensification programme cannot bejudged on production alone. Much more important is research and managementcapability, together with a viable extension infrastructure. The Bimas ("mass guidance")programme has been a great lesson on how to develop small farming.
a. Extension Infrastructure
In the early 1960s, there was only one agricultural officer in each kecamatan, or sub-district, that might consist of 10 to 20 villages covering some 10 000 ha of farmland. Hehad to deal with all agricultural activities, including extension, administration, programmeoperation and data collection.
By now, the extension infrastructure has become much better. In 1974, along withcreation of AARD, the government founded the Agency for Agricultural Education,Training, and Extension (AAETE). Agriculture Extension Centers (BPP) were set up inthe regions, now serving two or three kecamatans. BPPs are home bases for fieldextension officers working in the villages (PPL). One PPL serves an area of about 600-1000 ha, or about one PPL per village in Java for rice villages. For a non-rice area, thenumber of PPLs is much less, sometimes only one for three villages. The situation isworse outside Java.
A BPP is run by an extension manager and several extension programmers (PPUP). He is a specialist in food and estate crops, fisheries and animal husbandry and aresource specialist.
At the Kabupaten (district) and province levels are Extension Specialists (PPS),supporting the BPPs. This extension structure is separate from but linked with theAgency (Fig. 2.3).
Figure 2.3 Extension infrastructure
(1) (2) (3)BIMAS AAETE D.G.S ...... National Level
| | |BIMAS PPS DINASES ...... Prov. Level
| | |BIMAS PPS DINASES ...... Kab. Level
| | | | | BPP ...... Kec. Level | I |- - - - - - - - |- - - - - - - - |
extension ...... Vill. Levelworkers
The organisational structure in Figure 2.3 is not well-defined in practice. But inprinciple:
- Channel 1 is the administration channel. Extension workers are employees of the Bimas organisation.
- Channel 2 is the technical channel, through which extension materials and training programmes are developed.
- Channel 3 is the operational channel, as field operation of the Bimas is also in the hand of the Dinases.
One channel not in Fig. 2.3 is the Agricultural Regional Office (Kanwil), which issupposed to represent the minister of agriculture in the provinces. Kanwil is a cross-commodity agency at provincial level. A major reorganisation of the Ministry ofa*griculture should be complete by the end of Pelita V.
The field extension worker, serving 600-1 000 ha and in Java some 3 000 farmers, isobliged to divide farmers into groups, each with about 50 ha of farmland.
The service area of a PPL is called a WKPP and the service area of a farmer groupis called a Wilkel. Every PPL is supposed to set up about 16 Wilkels in his service area,each headed by a Kontak Tani, the key farmer for the PPL to contact. The LAKU system(extension visit programme) means communicating with the 16 farmer groups and ismonitored by the BPP manager.
The FIGURE 2.4 (CORN PRICE TRENDS 1974 - 1984) is not reproduced due totechnical reasons. Please consult printed version.
Intensification programmes use the extension grouping of farmers, especially in theINSUS programme (special intensification). Growth of extension infrastructure is shownin Table 2.10, including village cooperatives and banking (BRI village unit).
Table 2.10
GROWTH OF EXTENSION INFRASTRUCTURE IN PELITA III AND IV
ExtensionInfra- Growth Rate Growth RateStructure in Pelita III 1983 1984 1985 1986 1987a 1983-1987
WKPP 11.0 15 840 16 597 17 243 17 594 17 843 3.0PPL 7.1 14 904 18 659 18 874 22 162 27 747 17.2PPS 8.9 592 595 1 034 1 398 1 501 29.5BRI vill.unit 2.0 3 617 3 626 3 646 3 646 3 645 0.2KUD (coop) 7.9 6 141 6 455 6 945 7 126 7 429 4.9Kiosk 9.7 18 322 18 730 20 303 20 303 21 326 3.9
a: provisional figuresSource: Repelita V, Ministry of Agriculture, Jakarta.
b. Incentives and Disincentives to Producers
The success of the rice intensification programme and the enthusiasm of ricefarmers for technology -- even without the Bimas programme -- is the token ofprofitability. See also the growing profitability of maize production in Table 1.16 and themaize price trend in Figure 2.4.
Profitability of intensification for rice and maize farmers presents no seriousproblems, as market forces are reasonable in intensification areas. For soybean,intensification may bring serious problems in areas of low pH and aluminium toxicity. Butthis can be solved by proper liming and soybean production has the highest rate ofincrease in recent years. Soybean intensification failed in irrigated areas where drainagewas a problem.
c. Private Versus Public Roles
As noted, food crops are largely a smallholder activity and commercial firms areinvolved only outside production, in trade and processing.
With success of intensification programmes and establishment of technology,extension and greater farmer skills, private companies are cooperating with researchersand extension workers in field trials for fertiliser, pesticide, growth-stimulating chemicalsand high quality seeds. In East Java, they virtually hired the PPL to market their seedsby giving incentives to extension workers.
Companies may also produce seeds in cooperation with farmers, paying allexpenses and getting the seeds from farmers at an agreed price or offering seeds oncredit, for payment after the harvest.
Since 1985, the government has invited private firms to "adopt" smallholders andrural industry. It has also set up an estate system for industrial crops, called PIR. Thegovernment estates open up a new area, 20 per cent fully managed by the estate and 80per cent managed cooperatively with farmers as smallholders. Much of the system issupported by a World Bank loan.
8. Competition and Comparative Advantage
a. Competition Between Crops
There is no sharp competition between crops at farm level. The cropping system offarmers is necessarily complementary because of the small area managed by eachfarmer.
IRRI's scientists have long seen the need to promote the cropping system ratherthan rice culture and talk of a rice-base-cropping system. Prices may cause somecompetition between crops but crops are interrelated as is the consumption pattern ofrural households.
b. Comparative Advantage in World Markets
Comparative advantage, particularly between developed and developing nations, isthe theme of this study. The main hypothesis is that rapidly-advancing biotechnologyseems to reduce the comparative advantage of developing nations inproduction of some major farm items such as maize and soybean. This is sharplyreflected in the average food balance of developing nations and their decreasing worldmarket share.
The Center for Agro-Economic Research worked with IFPRI in 1986 to study thecomparative advantage of Indonesia in production of various food items, especially rice,
maize, soybean and cassava. Six regions were studied - West Java, Central Java, EastJava, Sumatra, Bali & Nusa Tenggara, and Kalimantan - using mainly secondary datafrom the Central Bureau of Statistics (BPS).
The model distinguishes between potential production and potential deficit, showingpotential trade direction. Each province has the potential for an importing, exporting andinterregional surplus or deficit situation. Three trade regimes were then defined:Interregional Trade (IR), Import Substitution (IS) and Export Promotion (EP).
Domestic Resources Cost (DRC) measures how many rupiahs need to be spent onmaize production to earn one dollar. The ratio between DRC and Shadow ExchangeRate (SER) is called Resource Cost Ratio (RCR), with the following features:
< advantage RCR = 1 neutral > disadvantage
Thus the RCR can be used to evaluate whether a region belongs to an Export Promotionregime (EP).
IS measures how many rupiahs need to be invested in maize production tosubstitute for one dollar's worth of maize imported.
IR is how many rupiahs need to be invested in maize production within the region tosubstitute for one rupiah of maize brought in from another region.
So: < advantage IS = 1 neutral > disadvantage < advantage IR = 1 neutral > disadvantage
Results of the calculation are shown in Table 2.11.
Table 2.11
SUMMARY OF ECONOMIC COMPARATIVE ADVANTAGE OF MAIZEBY REGION AND TRADE REGIME
Region Trade RCR DRC NEB NFPRegime (Rp/kg) (Rp/kg)
West Java IS 0.85641 1408 20.64 18.43EP 1.52588 2509 -49.47 -56.56
Central Java IR 0.64226 1056 50.18 77.07IS 0.53806 885 67.85 98.88
EP 0.93058 1530 7.08 7.52East Java IR 0.79586 1308 21.71 14.64
IS 0.69801 1148 40.85 55.59EP 1.23166 2025 -20.87 -20.46
Sumatra IR 0.55306 909 59.72 56.94IS 0.46642 767 73.96 96.37
EP 0.98264 1615 1.62 17.33Bali & Nusa Tenggara IR 0.44179 726 78.70 93.70
IS 0.41974 690 89.11 107.28EP 0.72184 1187 27.39 16.71
South Sulawesi IR 0.47879 787 75.38 48.55IS 0.84540 1390 91.25 43.01
EP 0.75442 1240 24.88 17.21Kalimantan IS 0.47165 775 81.82 110.91
EP 0.82205 1351 17.67 6.56
RCR = Resource Cost Ratio; DRC = Domestic Resource Cost; NEB = Net Economic Benefit; NFP = Net Financial Profitability. Basedon exchange rate of Rp 1,126 per dollar.Source: Rosegrant et al., 1987.
From Table 2.11 we can conclude:
- it is profitable to produce maize in all regions because all values of IR and IS aresmaller than one.
- maize exports are cost probihitive in West Java and East Java, but reasonablyprofitable for Bali & Nusa Tenggara, and very close to neutral for Sumatra.
In 1986, the rupiah was devalued from 1 126 to 1 644/dollar (in October 1989, itwas 1 780). It is hard to make an instant adjustment, because domestic prices arechanging. Assuming all other things constant, we arrive at the adjusted values shown inTable 2.12.
Table 2.12DOMESTIC RESOURCES COST RATIO OF MAIZE
ADJUSTED FOR DEVALUATION IN 1985
Region IR IS EP
West Java - 0.74 1.02Central Java 0.71 0.63 0.84East Java 0.75 0.65 0.86Bali & Nusa Tenggara 0.57 0.49 0.76Sumatra 0.65 0.58 0.80Sulawesi 0.62 0.60 0.75Kalimantan - 0.60 0.88
Rosegrant et al., 1987.
From these adjusted values, we conclude that maize exports are feasible for allregions except West Java. What does that mean? Unfortunately, the research teamstopped work abruptly. Tables 2.11 and 2.12 do not indicate whether Indonesia shouldexport maize.
Kalimantan produces little maize. The island produced no more than 33 000 metrictons equivalent in 1983, probably enough for its seven million people. Producing, say,200 000 tons of maize would change the whole cost structure.
9. International Technology Transfer Versus Domestic Generation
Technology must be related to income generation, because technological know-howis an investment, an asset we have to buy, in terms of hard cash or shadow prices. Wemust be selective and cost and benefit conscious. We already have a lot of idletechnological resources, expensive assets we have bought without being able to useprofitably or transfer to the ultimate users. One of the most precious and expensiveassets is trained research professionals.
At this stage, domestic generation of technology means the ability of developingcountries to explore and adapt the full potential of technology from abroad. Internationaltransfer and domestic generation of technology is not an alternative, but complementary. Japan is a unique example of success in importing, adopting, mastering and generatingtechnology.
III. INTELLECTUAL PROPERTY RIGHTS
1. Seed Classification and Certification
Seeds are generally classified as breeder, foundation, stock or extension seed.
Extension seed is the seed sold to farmers. Stock seed is given to extensionseed growers by certified seed firms such as Sang Hyang Seri. Breeder seed is onlyproduced by breeders in research institutions. Production of foundation seed frombreeder seed is tightly controlled. The national seed system and seed institutionshave been set up by government decisions as follows:
- foundation of the National Seed Board (1971).
- organisation and function of the National SeedBoard (1971).
- establishment of the Agency (Sub-directorate) ofSeed Production and Development (1971).
- establishment of PERUM Sang Hyang Seri (1971).
- development, market control and seed certification(1971).
- guidelines for varietal certification (1974).
- import permits for plant materials (1977).
- procedure for requesting plant material imports(1980).
- requirements and procedure for varietal release(1977).
The National Seed Board is appointed by the government and by experts. Seed certification and procedures are vital for development of a seed industry.
Here are some examples of how the system works:
- certification is done by the Sub-directorate of Seed Production and Development and its branches in the regions.
- certification will only be considered if it has been approved by the minister of agriculture on recommendation of the National Seed Board.
- certification is based on classification into breeder, foundation, stock and extension seed.
- the area used for certification should be approved by the Sub-directorate.
- field tests should be carried out by staff of the Sub-directorate.
- the seed grower should endorse the request for field control one week before seeding.
- a field test is done at the vegetative, flowering and ripening phases.
- no laboratory test will be conducted if the field test fails.
- storage will also be supervised and the seed grower should endorse the request one month before seed storage.
- sampling for seed certification should be done by Sub-directorate staff.
- laboratory tests should be done in the Sub-directorate's seed laboratory.
- results of field, laboratory and storage tests should be written up in the proper format one week after the test.
- when all quality requirements have been met, a certificate will be issued to the seed grower.
- tags will be provided for the bags of seed produced. On the tag, the seed classification (breeder, foundation, stock or extension seed) will be written, with a specific colour (white for breeder and foundation seed, violet forstock seed and blue for extension seed).
- standard quality for extension seed is determined as follows:
Rice: - purity, minimum 95%- germination rate, minimum 60%- seed of weeds, maximum 2%- moisture, maximum 13% (lab)
Maize: - purity, minimum 95%- germination rate, minimum 60%- seed of weeds, maximum 2%- moisture, maximum 12% (lab)
2. Preference and Promotion of Open-Pollinated Versus Hybrid
Table 2.4 shows the farmer's great preference for local varieties, especiallyopen-pollinated varieties and particularly Arjuna, released by Bogor Food CropsResearch Institute. Preference for hybrid is only beginning.
Farmers seem to be guided by the following factors:
- where home consumption is high, farmers prefer local varieties because they are hardier. In Nusa Tenggara, farmers reported new
varieties were easily attacked by calandra right after harvest.
- when selling is a problem and farmers have to wait indefinitely to sell, perishability is important.
- field tests at experimental stations show hybrid requires good soil, rainfall distribution and cultivation practices, so the gap between realised and
potential yield is greater than with open-pollinated varieties.
- the price of hybrid seed was Rp 2600/kg in East Java (1988), while Arjuna Super was only Rp 1300/kg.
- farmers can use open-pollinated seed from neighbours or their own fields for several generations, without seriously reducing yields.
- hybrid seed is generally long maturing compared with open pollinated varieties and therefore less suited to existing cropping patterns, especially in a semi-arid climate.
So it is easy to understand why hybrid maize is mostly concentrated inirrigated fields. Where irrigation is good, maize cannot compete with rice. But whereirrigation is not so good, maize may have a comparative advantage over rice. InKediri, East Java, many maize farmers use pump irrigation for maize production.
The situation can be changed but it will take time. The production potential ofhybrid varieties is much greater than open-pollinated varieties despite the higher seedprice, so there will eventually have a stronger footing in Indonesian agriculture.
3. Policies and Attitudes Towards Property Rights and Patent Protection
Virtually all breeding research is done in government institutions and there islittle talk about patent and intellectual property for breeders in Indonesia. A patent lawis still in draft stage. It is being discussed by parliament and a law will probably bepassed in 1990.
Trade marks are protected. But for hybrid seed, this is no problem becausethe technology is not reproducible. No-one will want to produce hybrid commerciallyhowever. It is expensive and government institutions would be better off staying out ofit if it means cost and competition with commercial companies.
Also, no breeder would be rash enough to try producing hybrid maize unlesshe could sell it -- on the black market -- to a commercial seed company. So lack ofbreeder's rights means no incentive for the breeder to produce hybrid and meansfarmers must depend solely on private seed suppliers, who may charge a monopolisticprice.
The problem has already been experienced by maize breeders inventingArjuna open-pollinated seed. Because it is "public property," everybody can produceArjuna seed as long as it meets seed requirements. The seed company BISI saw theopportunity and began producing Arjuna Super seed as a trade mark.
A breeders' patent right should be given to government seed producers likeSang Hyang Seri. The firm can produce seed as demanded but can sell it to acommercial seed company and offer the breeder some incentive share.
We must distinguish between "patent right" and "copyright law," which wasestablished in Indonesia in 1982 and improved in 1986.
IV. POLICIES AFFECTING MAIZE PRODUCTION AND CONSUMPTION
1. Production Policy
Agricultural policy in general is directly linked withproduction, particularly through intensification (highertechnology), irrigation (rehabilitation and new projects toexpand agricultural land) and transmigration. This isconfirmed in the National Guidelines for Developmentconcerning the Five-Year Plan for agricultural development. Development has four aspects: intensification, extension 2,rehabilitation and diversification.
Since independence, increased production of rice, themajor staple, has been a priority. Maize is only a secondarystaple. Large-scale rice production began in 1959 andincluded intensification and mechanisation to open up newfarmland outside Java. The intensification programme wasfirst called Padi Sentra and became the Bimas Programme in1964. Farm mechanisation was discontinued.
a. Intensification and the Bimas Programme
Under the Bimas programme, the government providescomprehensive credit, including farm input costs, cost ofliving allowance and an extension service. Bimas enabledIndonesia to develop the extension institutions discussed inChapter II.
From 1972, maize was included in the intensificationprogramme shown in Table 4.1. Arjuna, the new open-pollinated variety, appeared in 1980, followed by hybrid in1983.
In Table 4.2, yield per hectare is presented forintensification and non-intensification areas, showing thatincreasing use of high-yield varieties must be the basis forhigher productivity. But high-yield varieties were not usedin all intensification areas.
We must beware of yield differences between programme andnon-programme areas. Look at the decreasing tendency of thenon-intensification areas. This was not due to falling yieldbut to improved soil in the intensification areas. It meanssoil became poorer in non-intensification areas, hence itsapparent smaller yield.
The intensification areas have generally better soil andinfrastructure and so better yields. The rapid increase ofmaize intensification areas partly reflects the spread of
technology. Increased yields between 1969 and 1973 of about3.8 per cent a year (Table 4.1) cannot be attributed tointensification.
Rice intensification must indirectly affect maizeproduction. Fertiliser for rice can be used for other cropsas well. So maize intensification in the farmer's field musthave begun before the formal intensification programme.
TABLE 4.1
AREA AND YIELD OF MAIZE 1969 -1986
Area of Maize underIntensification
Totalarea
Yield Production
Year (000ha) Percent.Of Total
Harvested Ton/Ha (000t)
(000Ha)
1969 - - 2.435 0.94 2 2891970 - - 2.938 0.96 2 8201971 - - 2.651 0.98 2 5981972 6 - 2.160 1.04 3 7081973 116 3.4 3.433 1.08AveragePelita I - - 2.723 1.00 2 7231974 196 7.3 2.667 1.13 3 0141975 312 12.8 2.445 1.19 2 9101976 443 21.1 2.095 1.23 3 1361977 767 30.1 2.550 1.23 4 0231978 904 29.9 3.025 1.33 .....AveragePelita II 524 20.5 2.556 1.22 3 1181979 979 37.7 2.594 1.39 3 6061980 1 194 43.6 2.735 1.46 3 8291981 1 561 52.8 2.955 1.53 4 5211982 1 387 67.3 2.061 1.57 3 2671983 1 720 57.3 3.002 1.69 5 087AveragePelita III 1 368 51.2 2.669 1.53 4 0841984 1 960 63.5 3.085 1.71 5 2881985 1 863 76.4 2.440 1.77 4 3301986 2 597 82.6 3.143 1.88 5 920
Source: Bimas Secretariat, Jakarta.
Table 4.2.YIELD OF MAIZE (QT/HA) IN INTENSIFICATION
AND NON-INTENSIFICATION AREAS, 1980-85
Province 1980 1982 1983 1984 1985
DKI Jakarta:
-Intensification 11/81 - - - 15/48-Non-intensification 10/29 11/07 11/22 10/61 10/00-Aggregate 10/33 11/07 11/22 10/61 11/11
West Java:
-Intensification 15/22 16/22 15/87 16/54 17/36-Non-intensification 14/03 13/11 14/62 13/61 15/49-Aggregate 14/77 15/73 15/72 16/19 17/25
Central Java:
-Intensification 16/71 18/73 19/34 19/31 20/23-Non-intensification 15/01 15/90 16/80 16/24 16/40-Aggregate 16/12 18/14 18/81 18/99 19/99
DI Yogyakarta:
-Intensification 15/41 15/91 16/06 15/74 15/70-Non-intensification 14/74 12/80 13/73 11/38 12/66-Aggregate 15/00 14/71 15/41 14/60 15/35
East Java:
-Intensification 16/77 17/24 18/28 18/90 19/40-Non-intensification 13/08 15/02 16/70 15/17 16/82-Aggregate 15/30 16/77 17/99 18/27 19/04
Java aggregate:
-Intensification 16/65 17/54 18/47 18/78 19/55-Non-intensification 13/77 15/09 16/55 15/06 16/66-Aggregate 15/54 17/02 18/10 18/22 19/23
Source: Bimas Secretariat, Jakarta.
In Pelita V (1989-93), the government will continue theintensification programme. Production is heavily geared tointensification, which for rice is strongly supported byirrigation expansion and rehabilitation. For dryland foodcrop farming, land development is rare and intensification istherefore slower. Poor land development for dryland farmingalso leads to serious erosion and declining landproductivity.
Until 1986, the price of certified seed for maize wassubsidised by the government at the rate of Rp 750/kg forhybrid and Rp 500/kg for non-hybrid. Now it depends onmarket price, and varies depending on the company. Forhybrid, the price ranges from Rp 2 300 to Rp 2 600/kg, andfor non-hybrid between Rp 1 000/kg and Rp 1 300/kg.
2. Extension Programme
Extension means area expansion for agriculture, particularly:
- expansion of irrigation area through rehabilitation andnew construction.
- transmigration.
In Java, new irrigation schemes are usually through largewater reservoirs which also produce hydroelectric power. Construction is usually closely associated withreforestation. A large area of Java is in critical conditionin this respect and a huge conservation programme is underway there. It is in such critical areas that priority isgiven to transmigration.
In the rest of the island, there are small irrigationschemes (below 1,000 ha), which are believed to be moreefficient in supporting rural development in line withlimited government funds. But the programme seems to have nobig impact on production and productivity, especially outsideJava.
The transmigration programme consists of a generalscheme, fully government-financed, and the "swadaya" scheme,in which migrants are supported only after arrival in thetransmigration site, where they get land from the government.
The number of swadaya transmigrants is growing rapidly(Table 4.3).
Table 4.3
TRANSMIGRATION PROGRAMME, 1983-88, NUMBER OF PEOPLE
Type 1983/84 1984/85 1985/86 1986/87 1987/88
General Scheme 61 431 51 558 79 685 46 351 23 134Swadaya 14 867 50 330 86 665 126 508 140 813
Total 76 298 101 888 166 347 172 859 163 937
Each family is given an area of 2 ha, with the followingspecification:
- 0.25 ha for homeyard- 0.75 ha for food crop- 1.00 ha for perennial crop
The homeyard and food crop area is ready for cultivation. But the transmigrants face many problems, including:
- improper land opening and development, where fertiletopsoil is destroyed by tractors.
- poor soil fertility, due to low pH and aluminiumtoxicity for food crops in much of the dryland openedfor transmigration (Red Yellow Podsolic soil).
- shortage of labour on one hand, and better jobopportunities for the transmigrant outside theirfarms in the short term.
- in tidal swamp areas, water control, salinity, peat,sulphur toxicity and clean water availability are themain problems faced by transmigrants, making theireffective cultivated area much less than their farmsize.
The transmigration programme has failed to create foodsurpluses in the new areas but it does help the poor torecover. However in about 20 per cent of transmigration sites,it is hard for farmers even to reach self-sufficiency inproduction of cereals and grain legumes. In the transmigrationarea in Lampung and South Sumatra, a lot of transmigrants workin the new plantations, especially sugar cane, which isconsidered preferable to developing their own farms.
Other, smaller kinds of transmigration besides the generaland swadaya schemes, are:
- fisherman transmigration
- nucleus estate transmigration
- local transmigration
Nucleus estate transmigration concerns large estates(rubber, palm oil, sugar) in the new area. The working area issubdivided into the nucleus and plasma areas, in the proportionof about 20 to 80 per cent. The plasma area is distributed tofarmers, 2 ha per household, along with the homeyard andadditional area for food crops.
Development of the plantation is carried out by thecommercial estate, with a soft government loan (with or withoutforeign participation). Farmers act as labourers on their ownfarms and are paid by the estate. Once the standing cropsreach production, field management is then transferred tofarmers and the repayment schedule begins.
The transmigration programme in Pelita IV (1983-88) wasslower than in Pelita III and the swadaya programme wasemphasised. In Pelita III, about 300 000 farm families weremoved, involving about a million ha of farm area. Assuming afamily size of four, about 170 000 families joined theprogramme in Pelita IV, which was equivalent to about 340 000ha.
For the whole period of the Pelitas (I to IV), about800 000 families have been moved to the new areas, equivalentto expanding agricultural land by about two million ha.
The new irrigated area is shown in Table 4.4.
Table 4.4
NEW IRRIGATED AREA DEVELOPED IN PELITA III AND IV
Pelita PelitaIVIrrigated Area III 1984/85 1985/86 1986/87 1987/88
Developed 170 184 43 399 55 492 31 493 26 496Cultivated 146 068 49 518 54 758 32 227 26 492
Source: Ministry of Agriculture, Pelita V.
Besides area expansion, major irrigation rehabilitationschemes have been conducted, covering millions of hectares inPelitas I to V. The growth of new irrigated areas was lessthan 50 000ha a year, which is believed to be the conversionrate of land area for industrial use and real estate in Javaand outside.
Farmers outside Java, in areas where land is abundant, haveno strong reason to maximise rice production because it doesnot maximise their income. A team leader in a transmigrationresearch programme in East Kalimantan noted that:
- for people in rice-producing villages, more income canbe earned in other jobs,with rice farm income onlyabout 12 per cent of the total despite abundant land.
- rice farming is very labour intensive and there is ashortage of labour.
- for transmigrants, job opportunities outsideagriculture appear more promising, at least in theshort term, while food crop cultivation is quite riskydue to poor soil and pests.
- in the long term, farmers need to diversify from foodcrops to perennial crops, but much capital is needed.
- cassava could be easily grown, but marketing is poor. So despite the massive extension programme, riceproduction still heavily relies on large-scaleirrigation schemes in Java, where significantsurpluses are generated.
3. Current Priority Perception
At a seminar to mark International Food Day in September1989, participants did not talk seriously about the extensionprogramme. The option of intensification was considered thebest, because a large area of food crops had not been touchedon by Insus or Supra-Insus (high level intensification). Onthe other hand, food diversification, when properlyimplemented, will significantly affect people's consumptionpatterns 3.
The lack of enthusiasm of technocrats in the Ministry ofa*griculture for extension is probably due to the fact that thebudget is allocated among a number of ministries. Theextension program is also the job of the public works andtransmigration ministries. When serious extension isimplemented, much of its budget will not flow through theagriculture ministry but through the other two. It may resultin anti-national policies. The little interest of theagriculture ministry in the programme has led to over-emphasison the intensification programme.
Over-reliance on the small and crowded island of Java forfood surpluses is dangerous because:
- Java will become more and more industrialised. Some30 000 ha of land is being converted annually toindustrial use and real estate, including productiverice areas.
- high population pressure in Java has led to over-exploitation of the soil and serious erosion in theupper part of watershed areas.
- sugar cane was planted by the Dutch in irrigated riceareas in Java, but because of serious competition fromother crops it has been shifted increasingly todryland and new areas have been developed outsideJava. Yet a significant part of the irrigated areahas to be reserved for cane or the feasibility of thesugar industry will suffer. When cane is shifted todryland, pressure on land increases and with itproblems of soil and water quality.
- industrial development will also increase demand forwater, both for factories and the urban population. By the year 2000 much more irrigation water in Javawill be used for industry and fresh water for theurban population. Industrial pollution will be
aggravated by lack of water. Already lack of water inJakarta is causing deep wells to be dug, creating aproblem of sea water intrusion.
The agro-ecosystem outside Java is quite different, andattempts to open the area for transmigration have beeninconsistent. Poor support seems the main reason and sectoralor ministerial budget separation is probably another. Thetransmigration programme was started by the public worksministry. The ministry of transmigration was formerly adirectorate-general under the ministry of labour andtransmigration, with a weak technical staff and organisation todeal with either land and agriculture development, and actedmainly as a contract holder for the transmigration projects. Even now, land development expertise is in the hands of thepublic works ministry, while agricultural development expertiseis under the ministry of agriculture. An interministerialorganisation has been set up.
4. Competition with Other Crops
When the food crop extension program is considered, the mainissue is not rice versus other crops, but rice and the so-called palawija crops, such as maize, cassava and grainlegumes, the main staple mix of the population.
Rice has a high comparative advantage in irrigated areas andthe government encourages farmers to grow rice there and usethe land all year round. In well-irrigated areas, farmers canapply a rice-rice-rice cropping system or rice-rice-palawija. In less favourable conditions, rice-palawija-palawija may bebest. Under the three-crop system, a theoretical croppingindex of 300 per cent can be reached.
But this is difficult to achieve when aggregate area isconcerned. In Java, where labour is plentiful, it is not hardto reach a cropping intensity of 200 or slightly above. Butoutside Java, where labour is scarce, cropping intensity maynot reach 120 per cent. In regions where non-agricultural jobopportunities are numerous and the perennial crop alternativeis strong, cropping intensity in small-scale irrigation schemesmay be less than 100 per cent. It means some areas areabandoned or left fallow.
In Jatiluhur irrigation scheme in West Java, the best andlargest irrigation project so far, drainage is a problem,making palawija production as second or third crop difficult.
In the best-irrigated area, maize has no comparativeadvantage over rice, while in the dryland eco-system it depends
on local consumption preferences and rainfall. In West Java,rice preference is high in family diet and little maize isproduced there. This is also supported by high rainfall inWest Java. In East Java, maize is more popular, a choiceaffected by the lower rainfall.
With rapid development of high-yield maize varieties, itscomparative advantage over other crops seems to increase,especially supported by the fast-growing feed industrydiscussed in Chapter I.
Based on performance in Pelita IV and the expected need inPelita V, the government plans to promote maize production asmuch as rice, which is shown in Table 4.5. The growth targetin Pelita V suggests the government is satisfied with its lowprofile policy of maintaining self sufficiency rather thanexpanding maize production for export.
Diversification through cropping system improvement isconsidered the best bet. There is no serious problem ofcompetition between crops at farm level when aggregate area isconcerned. See also the cropping system discussed in ChapterI, Tables 1.11 and 1.8.
5. Consumption and Related Policy
Over-reliance on rice in Indonesia's diet is the weak pointof the economy and efforts have been made to diversify. Yetbecause marketing support for food crops is focused on rice, itis hard to see how this can be done. One way is throughproduct diversification using innovation in food technology,such as processing cassava into meal as a partial substitutefor wheat. But the well-developed marketing structure for riceencourages townspeople to eat more rice, even in provinceswhere maize and other food are staples among the ruralpopulation.
Protein and calorie consumption per capita from various foodsources are shown in Table 4.6. Note that even for proteinconsumption, cereals come first, reflecting a strong biastowards a carbohydrate diet, which also indicates a low incomelevel.
In absolute terms, calorie intake per capita per day isabout 2 500 (about 600 gr carbohydrate equivalent) and proteinintake about 50 grams. Calorie intake is consideredsufficient, but protein intake is very low. About 80 per centof protein intake is plant protein and 20 per cent animalprotein. Fish is by far the most important animal proteinsource in the diet.
Where diet quality is concerned, maize is better than withcassava and a shift from cassava to maize or rice isrecommended in poor areas where cassava is the major staple,usually in the dry season. Grain legumes are rich in protein,the development of which will improve rural diet.
A large soybean deficit in national production compared withdomestic consumption is one of the most important policy issuesin food production. Import needs may soar beyond a milliontons a year by the end of Pelita V if production growth cannotbe improved. The Pelita V target growth of 3.4 per cent a yearseems too low. Soybean is the major protein source in the dietof the people, in the form of toufu and tempe . Income growthseems to boost demand for these food items much above otherprotein sources. Note the high protein contribution of fattygrains in Table 4.6.
So far, maize has never been a serious policy issue inIndonesian agriculture, except for its strong link with thefeed industry. The major policy issue in food production isrice and soybean. The self-sufficiency in rice since 1984 isconsidered a challenge to maintain.
Table 4.5
TARGET FOR HARVESTED AREA, YIELD, AND PRODUCTION FOR FOOD CROPS INPELITA V
Commodity 1988 1989 1990 1991 1992 1993 Growthrate %
Harvested area (000 ha)Rice 9 943 10 089 10 164 10 253 10 352 10 461 1.0Maize 3 178 3 182 3 207 3 228 3 261 3 337 1.0Cassava 1 200 1 208 1 210 1 220 1 224 1 232 0.5Sweet Potato 262 263 264 266 268 270 0.7Soybean 1 230 1 256 1 269 1 281 1 295 1 309 1.2Peanut 606 608 610 612 615 617 0.4Mungbean 333 333 334 335 337 338 0.4Vegetables 1 089 1 098 1 108 1 118 1 126 1 131 0.7Fruit 640 642 643 651 653 657 0.6
Yield (q/ha)Rice 41.83 44.01 44.63 45.48 45.95 46.56 2.2Maize 19.60 20.16 20.60 21.08 21.49 21.63 2.0Cassava 128.49 129.53 131.23 132.08 133.59 134.68 0.9Sweet Potato 86.72 87.60 88.48 89.06 89.63 90.22 0.7Soybean 10.70 10.83 11.08 11.34 11.60 11.86 2.1Peanut 9.65 9.76 9.88 9.99 10.06 10.21 1.1Mungbean 9 65 7.91 7.96 8.01 8.03 8.08 0.5
Production (000 t)
Rice 41 596 44 399 45 362 46 633 47 566 48 707 3.2Maize 6 229 6 415 6 607 6 805 7 008 7 218 3.0Cassava 15 419 15 647 15 879 16 114 16 352 16 593 1.5Sweet Potato 2 272 2 304 2 336 2 369 2 402 2 436 1.4Soybean 1 316 1 360 1 406 1 453 1 502 1 552 3.4Peanut 584 593 602 611 620 630 1.5Mungbean 261 263 266 268 271 273 0.9Vegetables 4 215 4 255 4 295 4 336 4 377 4 419 0.9Fruit 5 182 5 233 5 284 5 336 5 388 5 441 1.0
Source: Ministry of Agriculture, Pelita V.
Table 4.6
PROTEIN AND CALORIE INTAKE PER CAPITA FROM VARIOUS FOOD SOURCES, 1983-86
1983 1984 1985 1986Food Item Cal. Prot. Cal. Prot. Cal. Prot. Cal. Prot.
%
Cereals 67.3 66.6 66.1 63.1 65.9 62.7 68.1 61.9Fatty Foods 9.3 5.5 9.3 3.8 9.3 3.8 8.0 3.1Sugar 4.4 0.1 4.4 0.1 5.1 0.1 4.3 0.1Fatty Grains/Nuts 8.6 13.6 8.6 19.2 8.9 19.2 7.9 21.8Fruits 1.4 1.4 1.4 0.9 1.2 0.7 1.5 0.9Vegetables 0.6 1.5 0.6 1.5 0.7 1.7 0.8 1.8Meat 0.8 3.0 0.8 2.7 0.9 3.1 1.0 3.2Egg 0.3 1.0 0.3 1.1 0.3 1.1 0.3 1.1Milk 0.3 0.8 0.3 0.6 0.2 0.5 0.2 0.6Fish 0.7 6.8 0.8 6.7 0.8 7.0 0.7 5.6Fat and Oil 7.4 0.2 7.4 0.1 6.6 0.2 7.2 0.2
Source: Indonesia Food Balance, Central Bureau of Statistics.
Table 4.7
FOOD CONSUMPTION PER CAPITA PROJECTION, 1984-2010
Year PopulationRice Maize Soybean Cassava Sweet Peanut Mungbean(000) Potatoes
1989 176 770 137.845 26.316 8.096 59.273 11.639 2.549 1.1291990 180 160 138.318 26.394 8.159 58.414 11.398 2.567 1.1631991 183 616 138.770 26.472 8.217 57.578 11.167 2.585 1.1971992 187 138 139.204 26.549 8.270 56.762 10.944 2.603 1.2301993 190 728 139.620 26.626 8.317 55.966 10.730 2.619 1.2631994 194 386 140.019 26.703 8.358 55.188 10.524 2.642 0.6191995 198 115 140.401 26.780 8.394 54.430 10.324 2.651 1.3271996 201 915 140.766 26.856 8.425 53.688 10.132 2.667 1.3591997 205 788 141.117 26.933 8.451 52.964 9.947 2.682 1.3901998 209 736 141.452 27.009 8.473 52.255 9.767 2.696 1.4201999 213 759 141.772 27.085 8.490 51.562 9.594 2.710 1.4512000 217 859 142.079 27.161 8.502 50.884 9.426 2.723 1.4802001 222 038 142.372 27.237 8.510 50.220 9.263 2.736 1.5092002 226 297 142.653 27.313 8.515 49.569 9.105 2.749 1.5382003 230 638 152.921 27.389 8.515 48.932 8.952 2.761 1.5662004 235 062 143.177 27.464 8.511 48.308 8.804 2.773 1.5942005 239 571 143.422 27.540 8.504 47.695 8.804 2.773 1.5942006 244 166 143.656 27.615 8.494 47.095 8.519 2.795 1.6472007 248 849 143.879 27.691 8.480 46.505 8.383 2.806 1.6732008 253 623 144.093 27.766 8.463 45.927 8.251 2.816 1.6992009 258 488 144.296 27.842 8.433 45.360 8.122 2.827 1.7232010 263 446 144.490 27.917 8.421 44.802 7.996 2.836 1.748
Source: Center for Agro Economic Research, 1989.
Table 4.7 shows food consumption per capita projected for 1984-2010. Only consumption of cassava and sweet potato is declining. Note steadilyincreasing rice consumption.
6. Employment and Farm Mechanisation
Unemployment is probably Indonesia's gravest economicproblem. In Pelita V about 11 million new workers will comeonto the market, four million of them for agriculture. Yet inTable 4.8 we see that jobs in agriculture were shrinking inJava (except East Java). So this new employment should bedirected outside Java.
Table 4.8
STRUCTURE OF HOUSEHOLD INCOME AND GROWTH OF AGRICULTURAL EMPLOYMENT BYPROVINCE
Food CropIncome Share
Agr. Total Household Growth ofIncome Income Income/Year Employment
Province % % Rp.000 1978-1985
D.I. Aceh 44.6 26.9 791 0.1North Sumatra 52.5 29.9 735 0.5West Sumatra 58.8 30.5 735 0.2Riau 17.4 9.9 1 086 3.8Jambi 40.5 28.0 724 8.5South Sumatra 33.8 22.5 878 5.9Bengkulu 37.7 26.1 821 7.0Lampung 39.7 25.1 590 6.5West Java 68.0 28.3 640 -0.8Central Java 61.6 31.0 609 -1.0Yogyakarta 57.1 24.3 750 -2.0East Java 58.4 33.9 593 0.1Bali 39.1 23.0 847 2.1West N. Tenggara 63.4 39.8 523 -1.1East N. Tenggara 45.9 33.3 621 1.6West Kalimantan 42.7 27.2 655 3.8C. Kalimantan 36.9 22.3 853 1.5S. Kalimantan 58.9 29.4 574 0.4E. Kalimantan 35.3 21.6 702 0.1North Sulawesi 43.2 24.4 907 4.4Central Sulawesi 44.1 33.4 836 6.6South Sulawesi 55.8 36.4 634 0.6SE. Sulawesi 42.9 26.1 659 9.2Maluku 29.5 19.7 909 5.5Irian Jaya 30.8 22.7 770 8.6
Source: ILO/UNDP study, 1989. Quoted from Kasryno & Swenson, 1989.
The pressure of the labour force is the main reason forIndonesia to pursue labour intensive policies, wheneverfeasible. It means cautiously - and meticulously - tointroduce farm mechanisation, since such mechanisation willsharply reduce jobs in agriculture. This is why agro-economists protested strongly about introduction of rice millsand the shift from ani-ani (a traditional knife in rice
harvesting carried by women) to sickle harvesting in the 1970s.
Yet current problems seem to work against a labour intensivepolicy. They include:
- low labour productivity in agriculture compared withthe industrial sector (Table 4.9).
- inability to promote agricultural development intransmigration and other areas of scarce labour.
- power tillers are concentrated in Java and are neededto support the Supra-Insus programme, especially toensure timely programme implementation.
- the number of tractors and power tillers in Indonesiais among the lowest in Asia (Table 4.10), suggestingthe need to encourage more mechanisation. This isalso shown in Fig. 4.1.
- reluctance of a better-educated new rural labour forceto work on farms and preference for urban jobs.
Labour intensive policy, when carried out beyond itseconomic desirability, will not achieve its goal and may evenprevent high productivity and full employment.
Table 4.9
DEVELOPMENT OF LABOUR PRODUCTIVITY, EMPLOYMENT AND GDP IN AGRICULTURE,1971-87
Year Employment Agriculture Relative(%) GDP (%) Productivity 1
1971 66.3 44.0 0.401976 61.6 36.1 0.351977 61.5 33.7 0.321978 60.9 32.8 0.311980 55.9 30.7 0.351982 54.7 29.8 0.351985 54.7 24.0 0.201986 55.1 23.7 0.251987 55.0 23.4 0.25
1 Ratio of labour productivity in agriculture and in non-agriculture.Source: Faisal Kasryno and C.G. Swenson, Prospek Penyerapan Tenaga Kerja,
Policy Workshop, 1989.
Table 4.10ESTIMATED INVENTORY OF AGRICULTURAL TRACTORS PER 1000 HA OF ARABLE AND
PERMANENT LAND, ASIAN COUNTRIES 1984-85
TractorsCountry (1984) (1985) Power Tillers
East Asia
Japan 345.2 389.6 594.5Rep. of Korea 4.5 6.0 248.5
Southeast Asia
Burma 1.0 1.0 -Indonesia 0.5 0.6 1.2Malaysia 2.4 2.6 -Philippines 1.7 2.5 6.5Thailand 6.2 6.4 16.8Vietnam 5.9 5.9 -
South Asia
Bangladesh 0.5 0.5 -India 3.3 3.6 0.2Nepal 1.2 - -Pakistan 7.3 7.6 -Sri Lanka 12.1 12.4 9.1
FAO Production Yearbook 1985 and 1986;Japan Agricultural Machinery Association 1987;Korean Agricultural Machinery Association 1985; Bernas 1986; Reyes 1985.Quoted from Bart Duff et al., Agricultural Modernization, Mechanisation and Rural-BasedIndustrial Development in Asia, AESSEA Biennial Meeting, Manila, 1988.
The FIGURE 4.1 (TRENDS IN AGRICULTURAL INPUTS, SOUTHEASTASIA) is not reproduced due to technical reasons. Pleaseconsult printed version.
If mechanical power is needed in the labour surpluseconomy of Java, it is needed much more where labour isscarce. It is wrong though to regard mechanical power as analternative to manual power. It is really a tool to increaseproductivity and capacity of labour. Introducing mechanicalpower also means creating jobs in related sectors or sub-sectors. Jobs are increasing rapidly in towns, wheremechanisation is unrestricted, opening the way for countrypeople to work there. The risk that farm mechanisation willreduce jobs is real, but if done carefully, it can boostrural employment.
Oil is the cheapest form of energy known so far - 2 000times cheaper than carbohydrate energy used in manualactivity. This is the main reason the poor are poor, becausethey have no opportunity to use cheap mechanical power.
Thailand's ability to introduce greater farm mechanisationis probably the reason it is a significant exporter of rice,maize and cassava - all of them labour intensive commodities.
7. Marketing and Related Policy
a. An Overview
Rice and maize are key items in the national economy andthe government has to exert strong market control with afloor and ceiling price policy. Theoretically, when thefarm-gate price drops below floor price, the government stepsin to buy the commodity at the floor price, protecting theproducer. When the price goes above the ceiling price at theconsumer's market, the government steps in by selling some ofits stock of the commodity in the market below the ceilingprice, thus protecting consumers.
To speed up adoption of new technology, the governmentalso controls farm inputs, such as fertiliser, pesticide andseed. A large subsidy encourages adoption of these inputs.
Table 4.11 shows the subsidised price of fertiliser, thefloor price for maize and rice, the consumer index and dollarexchange rate for 1979-90. Note the favourable floor priceover time in relation to fertiliser price, reflecting realsupport for increased production. Note also the rate ofchange in floor prices for maize and rice was higher than therate of change of the consumer index, reflecting thefavourable price incentive over time.
Table 4.11Selected prices, consumer index and exchange rate, 1979-90
Year Fertiliser Floor Price Rp/kg 1 Consumer Rp/US$Rp/kg Rice Maize Index
1979 70 75 - 132.00 6321980 70 95 42.5 156.32 6341981 70 105 67 176.46 6431982 70 120 95 192.09 6921983 90 135 105 214.74 9961984 90 145 105 237.19 10761985 100 175 105 248.40 11311986 100 175 110 262.88 16551987 120 190 110 287.27 16521988 130 220 125 310.37 1680 x1989 165 xx 250 140 - 1740 x1990 185 xx 270 155 - -
Rate of Change xxx(% per year) 8.8 12.3 15.1 10.0 11.00
x = approximate.xx = from 1989, the price of triple super-phosphate is different, Rp 185 for 1989 and Rp 210for 1990. The levels of subsidised price and floor price for 1990 were determined in October1989.xxx = calculated using simple arithmetic: · (x i - x i-1 ) ·
· ------------1 ·100 %· n - 1 ·
Note 1: for rice, it is in the form of "gabah" or unhusked rice.Source: Statistical Yearbooks, CBS.
This simple exposé is far from sufficient, because theconsumer index is based on urban consumption in 17 cities. The index in rural areas may be quite different.
The terms of trade of rice relative to various commoditiesneeded by farmers appeared to decline by 27 per cent between1976-86, an annual rate of -2.5 per cent. Farmers have tosell rice at the low (producer's) price, but have to pay morefor urban commodities than urban consumers because of therural market's higher costs of transport, storage anddistribution. So the rural market consumer index appeared togrow faster 4.
Table 4.12 shows the price of maize relative to selectedagricultural commodities. With regard to cassava and sugar,the price of maize is stable, while relative to peanut,soybean, and mungbean it is falling.
Table 4.12
MAIZE PRICE RELATIVE TO SELECTED FOOD ITEMS,1969-85, WHOLESALE PRICE
Year Rice Cassava Peanut Mungbean Soybean Sugar
1970 0.58 3.78 0.31 0.43 0.53 0.371971 0.60 3.34 0.29 0.36 0.43 0.361972 0.68 2.73 0.25 0.27 0.46 0.321973 0.60 2.51 0.28 0.37 0.42 0.351974 0.77 3.80 0.25 0.37 0.46 0.411975 0.61 3.12 0.29 0.36 0.47 0.421976 0.66 3.68 0.31 0.37 0.56 0.481977 0.60 3.06 0.30 0.33 0.43 0.381978 0.48 4.12 0.20 0.30 0.40 0.341979 0.64 5.40 0.22 0.31 0.46 0.481980 0.53 3.25 0.18 0.33 0.38 0.271981 0.54 3.59 0.17 0.31 0.38 0.271982 0.65 3.61 0.25 0.36 0.50 0.321983 0.56 2.21 0.21 0.32 0.44 0.331964 0.55 2.74 0.19 0.31 0.38 0.311985 0.55 3.48 0.18 0.33 0.41 0.34
Source: calculated from the data of the Directorate of Farm Economics, D.G. of Food Crops,1987.
In Chapter I, we showed that farm revenue in maizeproduction was increasing despite growing cost per hectare. Adoption of high-yield varieties and the associatedintensification programme seemed to be what enables Indonesiato produce enough maize to meet expanding domestic demand.
b. Exports and Comparative Advantage
The ability of the country to meet increasing domesticdemand for maize does not imply ability to sell maize on theworld market as an exporter. In Table 4.13, we see that:
- until 1975, Indonesia was a net exporter with volume ofabout 200 000 tons. Since then it has become a netimporting country, except in 1981 and 1984.
- since 1976, the ratio between world market price anddomestic price (represented by FOB New York and Jakartawholesale respectively) has been between 0.87 to 0.43,suggesting commodity flow must be from New York toJakarta, making Indonesia a net importer.
Table 4.13.
DOMESTIC PRODUCTION, EXPORT, IMPORT & PRICE OF MAIZE (1970-86)
Domestic Total Total World World Domestic Domestic WorldProduction Export Import Price Price Price Price RealPrice/
(Ton) (Ton) (Ton) (Rp/Ton) Real (Rp/Ton) (Rp/Ton) DomYear (Rp/Ton) Price
1970 2 824 593 282 196 - - - 26.100 71.584 -1971 2 605 975 227 979 - 21 840 57 154 25 580 66 941 0 851972 2 254 222 160 723 - 26 040 64 426 33 220 82 190 0 781973 3 989 685 180 271 - 39 480 87 918 45 910 102 237 0 861974 3 010 710 195 492 - 52 452 101 987 60 060 116 780 0 871975 2 902 833 50 723 - 52 204 97 996 74 540 139 924 0 701976 2 572 009 3 900 68 773 47 152 81 968 90 370 157 098 0 521977 3 142 582 13 392 14 401 40 065 66 971 76 710 128 226 0 521978 4 028 986 21 076 46 109 63 823 99 241 75 780 117 833 0 841979 3 605 277 6 830 69 945 72 891 99 134 126 410 171 921 0 581980 4 011 857 14 890 24 628 78 789 95 059 116 900 141 039 0 671981 4 509 065 13 448 35 84 179 87 010 131 910 136 345 0 641982 3 234 618 - 72 934 76 246 76 246 177 340 177 340 0 431983 5 087 106 16 733 21 654 135 267 125 821 183 000 170 221 0 741984 5 287 755 160 264 58 751 146 426 129 931 191 930 170 309 0 761985 4 099 023 3 541 50 542 130 105 116 582 208 340 186 685 0 621986 5 931 157 - 59 932 113 197 93 918 206 540 171 363 0 55
G Rate 4.75% -25.3% -1 4% 11 59% 3 37% 13 80% 5.61% -2.91%
Source:
- Domestic production: DG of Food Crops- Total export & import: CBS and Bulog- World price: FAO- Domestic price: Jakarta Wholesale Price, CBS
Growth rate:
- in columns 2, 3, 7 and 8 from 1970-86.- in column 4 from 1975-86.- in column 5, 6 and 9 from 1977-86.
Real price using a private consumption inflation index, 1982 base.
- World price = USA no.2 yellow FOB Gulf.- Quantity import = Maize + Other Maize (CCCN 10.05.900). - Quantity export = Maize + Other Maize.
Yet Jakarta is not a reasonable market point to compare,because it is a deficit region, and Indonesian maize exportsare not from Jakarta but Surabaya, capital of the maizesurplus province. In chapter I, table 1.17, the wholesaleprice in East Java was Rp 144/kg, compared with Rp 208/kg forJakarta wholesale and Rp 116/kg FOB New York.
Peter C. Timmer has suggested maize exports are possiblewhen done not long after the harvest to reduce storage cost(Fig. 4.2). So to evaluate Indonesia's comparative advantage
in maize production, we have to analyse prices in theproducing regions.
In Chapter II, using the devaluated rupiah in 1986, it wasshown that maize exports were feasible, except for West Java. Thus rupiah devaluation changed Indonesia's comparativeadvantage in maize production (Table 2.14). But (ChapterII), mere low EP value does not necessarily mean exportability, because it only shows "price feasibility" forexport. If Indonesia has maize surplus, then within theexisting price relationship, exports are feasible. But ifthere is no surplus, if surplus should be first created, thenwe have to calculate anew whether the surplus can be producedat the current cost structure or whether we have to changethe cost structure to generate surplus.
If we have to open new land to create the surplus, we haveto insert the new component of cost related to newinvestment. Probably we have to improve port facilities tomake exports possible or build new roads and otherinfrastructure to double maize production for export.
The Figure 4.2 (Role of Storage Cost and Government TradePolicy on Maize Price Formation and Potential for Imports andExports in Same Crop Year ) is not reproduced due totechnical reasons. Please consult printed version.
The IFPRI study calculated EP for Kalimantan, andKalimantan produced only 33 000 tons of maize in 1985. TheEP value calculated by the IFPRI team says nothing about howKalimantan should realize its "comparative advantage" inmaize production for export.
Government policy for maize and other food crop productionis oriented towards self-sufficiency. This contrasts withproduction of export-oriented commercial crops like rubber,oil palm and coffee, whose production level is far in excessof domestic demand.
This attitude is suported by Leon A. Mears for rice and byPeter C. Timmer for maize. Mears' argument is that it ismuch harder to manage a large surplus than a small deficit. Small net surplus or small net deficit is the easiestsituation to manage and so is the low-risk policy theyrecommend.
Indonesia is facing serious unemployment, with the problemof how agriculture can absorb four milion new workers inPelita V, the saturated market for many industrial crops, theproblem of involution in Java and land under-utilization
outside Java. In the long run, industrial development isexpected to resolve most problems, but a more immediatesolution is needed.
In this longer view, the precarious rice self-sufficiencywill be maintained because of over-reliance on Java for itscultivation, but efforts to expand land area for agriculturethrough transmigration and small-scale irrigation appeardoomed when food surplus in a new area is an important aim. Local surplus for the local market may be achieved, but ithas little impact on aggregate supply.
The transmigration programme should really be tied to thelong-term aim of shifting food production out of Java andmade part of regional development.
Pelita I - V should be considered a rehabilitation phasefollowed by intensification. In Pelita VI and beyond - thetake-off phase of Indonesia's economy - the stress should beon diversification and extension.
Diversification should be seen as widening and deepeningagricultural development, involving diversification byregion, in resources, crops and products. Farm mechanisationshould become a priority. Pelita V should also be considereda transition, a time to draft a long-term agricultural planfor Pelita VI and beyond.
A food surplus strategy for export is desirable to providejobs in the countryside, for which proper land preparationtechnology should be applied in the new expansion areas(transmigration). After the take-off stage, agriculture willbe hit by a labour shortage and so move to farmmechanisation.
NOTES
1 ROSEGRANT et al. used a standardised method to evaluate export potential. See the very high difference between the IR and EP regime in Table 2.12.
2 Extenstion refers to extending the area under cultivation.
3 Directorate-General of Food Crops, Kebijaksanaan Ketahanan PanganBerwawasan Lingkungan, Seminar, International Food Day, Jakarta, 1989.
4 See Kompas (daily), Harga Jual Gabah dan Dilema Penyediaan Pangan, October 7, 1989, editorial.
RESEARCH TEAM
Dr. Hidajat Natataatmadja Team Leader/Economist
Dr. Subandi MaizeBreeder/Biotechnologist
Ir. Aman Djauhari Msc. Farm Management
Ir. Adimesra Djulin Msc. On Farm Policy
Ir. Tri Pranadji Agroindustry
Dr. Pantjar Simatupang Marketing
Ir. Victor Manurung Msc. Maize Consumption andUtilisation
Dr. Sukardi Soil and Climate
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