Agriculture Reference
In-Depth Information
in parliament corresponded with the declining inluence of economic tehnocrats.
As a result of these protectionist trade policies, and in sharp contrast to the situation
during the New Order, domestic prices began to significantly diverge from world
markets — the implication being that Indonesian consumers were paying the price
for supporting domestic rice farmers. Indonesia is an active member of the G33 of
developing countries, and is currently leading negotiations in the World Trade Or-
ganization (WTO) for the inclusion of certain special products (SPs) to be exempt
from tariff reduction commitments. To this end, Indonesia is arguing for the right
to independently regulate production and trade in commodities suh as rice, corn,
soybean and sugar cane, due to their 'special significance' for food and livelihood
security. As highlighted by Fane and Warr (2009), these four commodities are also
import-competing products in Indonesia.
The costs to implement the food security strategies of the New Order (especially
producer subsidies and BULOG's pricing policy) were extremely high and were pos-
sible essentially through windfall government revenues generated by oil exports.
Depletion of known oil reserves, stagnating exploration and rapidly rising domestic
consumption have all resulted in Indonesia (a founding member of OPEC (Organ-
ization of Petroleum Exporting Countries)) being a net oil importer since 2004. The
implications for national fiscal policy have been profound. With increasingly scarce
budgetary resources, pressure has been brought to bear on dismantling the three core
state subsidies retained in post-reformasi Indonesia — fuel, electricity and fertilizers.
he hanging structure of the Indonesian economy has further brought into ques-
tion the immediate social benefits, relative to cost, of a strategy of national self-suf-
ficiency in basic foodstuffs.
De-agrarianization and the contested rural futures of Indonesia
Rural livelihoods in Indonesia, and poverty alleviation pathways more broadly, are
becoming increasingly delinked from agriculture, as off-farm income generation and
rural-urban migration assume ever greater significance. While this does not neg-
ate the disproportionately large number of Indonesian poor still dependent on ag-
riculture for their livelihoods, or the importance of agriculture in facilitating pro-
poor growth, it does pose a hallenging set of issues for the Indonesian government
when trying to formulate effective food security policy. It is, for instance, question-
able whether a pro-poor vision of development linked to agriculture is desirable in
the context of contemporary Indonesia. Furthermore, a national goal of rice self-
