Ministry of Agriculture Encourages Agricultural Intensification in Swamplands

The Ministry of Agriculture through the Directorate General of Infrastructure and Facilities (PSP) is encouraging land intensification in food estates (food barns) by increasing the capacity of agricultural areas in swamplands through the provision of agricultural production facilities.

During a webinar discussion of the Agricultural Journalists Forum with the theme “Food Estate Supports Food Security” in Jakarta, March 18, 2021, the Director General of PSP of the Ministry of Agriculture Sarwo Edhy said the land intensification is carried out in stages for the optimization of swamplands so that the agricultural productivity can increase. 

According to him, the swampland area reaches 34 million hectares. Based on research, around 17 million hectares can be used as productive agricultural land.

The implementation of the food estate is supported by the Ministry of Agriculture through a technological approach, socialization to farmers to use certified superior quality rice. As a result, the productivity in swamplands in Central Kalimantan has increased to 5 tons per hectare from 2-3 tons per hectare previously. Sarwo Edhy believes that swamplands are the future of this nation. 

The government, he said, is continuously trying to increase crop productivity in swamplands, especially in food estates, through technology. The ministry also provides assistance in the forms of planting and harvesting equipment for farmers to use, so that farmers can process and plant faster. Afterwards, the harvest can also be faster and can plant again.

In 2021, the Ministry of Agriculture will try to optimize swamplands in Central Kalimantan with a land area of 30,000 hectares. Previously in 2019, the government optimized swamplands in five provinces, namely, South Kalimantan, South Sulawesi, South Sumatra, Jambi, and Lampung. The total swampland area in the five provinces reached around 366,000 hectares for rice cultivation.

“Hopefully the food estate land can develop well in the future. Also in NTT of Central Sumba, so that we can meet the food needs of 270 million people,” Sarwo Edhy said.

Farmer’s Terms of Trade Increases by 0,18% in March 2021 

The Statistics Indonesia (BPS) recorded that the Farmer’s Terms of Trade (NTP/FTT) increased by 0.18% in March 2021 compared to the previous month’s. Meanwhile, the index of prices received by farmers (It) rose by 0.32%, higher than the increase in the index of prices paid by farmers (Ib) at 0.13%. 

Based on the BPS monitoring results for rural prices in 34 provinces in Indonesia, the national FTT increased by 0.18% to 103.29 in March 2021 from 103.10 in February 2021.  

According to the BPS, the increase of FTT in March 2021 was caused by the increase in the index of prices for agricultural production, which was higher than the increase in the index of prices for goods and services consumed by households, also production costs and additional capital goods.

The increase of FTT in March 2021 was also influenced by the increase of FTT in three agricultural sub-sectors, namely the horticultural crop sub-sector at 1.80%, smallholder plantation crops at 3.08%, and the livestock sub-sector at 0.03%.

Meanwhile, the FTT in the other two sub-sectors decreased. The FTT of food crops sub-sector dropped by 1.83% and the FTT of fisheries sub-sector declined by 0.28%. 

Nationally, the FTT from January to March 2021 was 103.22 with an It of 110.81 and Ib of 107.36.

In March 2021, the FTT of Bangka Belitung Province experienced the highest increase of 3.93% compared to the increase made by other provinces. On the other hand, the FTT of West Nusa Tenggara Province experienced the largest decline of 1.84% compared to the decline recorded by other provinces. 

The increase of FTT indicates the improvement in the welfare of farmers. However, in the previous period, the FTT had decreased. The national FTT fell by 0,15% in February 2021 compared to January’s FTT of 103.26. 

CIPS Recommendation for Production Increase in the Agricultural Sector 

The increase of FTT becomes an indication of an increase in the welfare of farmers. Despite making an increase in March 2021, the FTT had declined by 0.15% to 103.10 in February 2021 from around 103.26 in January 2021. Meanwhile, the terms of trade for farm household business (NTUP) fell by 0,27% to 103.72 from the range of 104.01.  

The Center for Indonesian Policy Studies (CIPS) recommends the central government to continue to pursue various programs to increase production in the agricultural sector. This is because the increase in production will have direct implications for national welfare. 

CIPS Head of Research Felippa Ann Amanta said there is often a dilemma to balance the welfare of farmers on the income side, and the relaxation of non-tariff policies or non-tariff measures (NTM). As many know, a strict application of NTM in Indonesia has an impact on the high domestic food prices. 

“We also often forget that farmers are consumers who need food too, both from self-produced commodities and others. Sometimes they buy on top off (prices) or higher than what they produce,” Felippa said during a webinar about ‘How Non-Tariff Policies Can Contribute to Poverty Reduction’ in Jakarta, March 30, 2021, quoting validnews.com. 

Farmers, who act as producers, are also consumers who can be sensitive to high food prices in the market. Moreover, Felippa assessed, the condition will get worse when farmers also need other nutritious food intake. 

She will continue to support the government’s efforts to improve smallholders to be more competitive. It can be pursued through land extensification and agricultural intensification so that there will be more crops that benefit farmers. 

“It can be through agricultural research and development or the use of quality seeds so that the production can be higher than now,” she said. 

Practically, an increase in productivity will have an impact on farmers’ income, compared to the spending on production capital and agricultural infrastructures. 

“If we can increase the productivity (of farmers), we can balance the welfare of farmers and the community can enjoy abundant food at affordable prices,” she explained. 

Agro Solution Boosts Agricultural Productivity

PT Pupuk Indonesia (Persero) continues to develop the Agro Solution program to encourage agricultural productivity. This program was named ‘The Best Innovation in Social Business Model’ for its biggest contribution to economic recovery amid the Covid-19 pandemic. 

Agro Solution becomes the company’s effort to answer the needs of farmers. Through this program, the company provides comprehensive assistance in rice cultivation by farmers, both through off-farm and on-farm activities, and involves multi-stakeholders. 

In off-farm activities, the Agro Solution program provides capital access to farmers through banking, insurance against the risk of crop failure by insurance companies, as well as certainty for purchase of crops by traders or offtakers.

Meanwhile, in on-farm activities, Pupuk Indonesia provides quality non-subsidized agricultural input products, such as fertilizers, seeds, pesticides and so on. The company also provides technology escort and technical guidance for agricultural cultivation.

So far, the pilot project of the Agro Solution program has made positive results in Banyuwangi, Jember, Bima, Dompu, Ponorogo, Magetan, Madiun, and Tuban. In these areas, the Agro Solution program has been implemented in 2,815 hectares of land and involved 2,078 farmers. 

The average yield of dry unhusked rice in those areas soared by 55.8%, while the dried corn rose by 45%. The profits for farmers have also increased by 91% from dry unhusked rice harvest and 60% from dry corn.

Agro Solution was officially launched in Jember Regency on November 5, 2020. Pupuk Indonesia is targeting Agro Solution to be implemented in 50,000 hectares of land area.

The targets are carried out by five holding members, namely Petrokimia Gresik with the target of 16,000 hectares of land, Pupuk Kalimantan Timur of 12,000 hectares, Pupuk Kujang of 10,000 hectares, Sriwidjaja Palembang of 8,000 hectares, and Pupuk Iskandar Muda of 4,000 hectares. Up to April 2021, the Agro Solution has been implemented on 10,861 hectares of land in various regions in Indonesia. 

According to President Director of Pupuk Indonesia Bakir Pasaman,  the key factor for the success of this program is technology assistance or control. With a significant increase in productivity, also access to capitalization and facilitated markets, the income of farmers increases and they are no longer dependent on subsidized fertilizers.