KETAHANAN PANGAN dan

KETAHANAN EKONOMI

MELANJUTKAN EVOLUSI
DENGAN REVOLUSI BERPIKIR
AGUS PAKPAHAN
WHAT ARE OUR PROBLEMS?
OUR PROBLEM IS IN OUR MIND
• Our belief:
• Agri(culture) vs industry, or agri(culture) then
industry, or agri(culture) and industry
• Food & Economy
 Food & Famine

 Plenty of food

 Cheap food price policy

 Food and political instability

 Who pay cheap food?

 Food & our future

• Our sense:
 What is beauty of good food & peaceful economy?

• Food is a part of culture

 How to change our culture to secure our future
 Our Problem (cont.)
• Our knowledge:
 Evidences: 7000 years or more of agriculture

 Rise and fall of nations

• Hundred dead cities

• Maya, Aztec, etc.
• Desertification
• Developed and Developing countries
• Who have food for now and future?
 Developed countries?

 Developing countries?

 Determinants:

• Adaptive capacity
• Innovation
• Buying high productivity
• Noogenetic revolution
 What Can Nature Supply?
 Tropical climate:
• Large diversity but lesser volume per size of land
• Tropical plants and animals
• Humid and hot
 Geographical configuration
• Islands types of land
• More waters than land
• Different size of islands; e.g. Java is only about 7 % out
of total Indonesia’s land area but produce about 60 % of
food.
 Population size is high, e.g.: 115 million in 1970,
217 million in 2005 and will be 275 million in
2050.
 Poor country
 AGRICULTURE, FOOD & ECONOMY

 Economic development is expected to transform the economy from heavily

based on agriculture to industrial economy.
 This kind of evolution has been a process of rapid changing economic
structure in developed nations. Less than a century, for example, the US
economic transformation has reduced number of farmers from more than
50 % in 1860 to less than 10 % in 1960 and now is about 2 %.
 Can developing countries follow the path of structural evolution such as
happened in developed countries? Can information era be compatible with
agricultural development in developing countries?
 China Cultural Revolution had been paid by about 27 million death of
people because of hunger and famine during 1949-1951, and now after
more than 50 years China has not yet become a developed country.
 Green revolution has been practiced for more than 30 years but Indonesia
still have about 20 % people in poverty and income per capita only
reached the level of about poverty line standard.
 Therefore, what goals should be taken and what direction and instruments
must be taken to reach our better future?
 WHAT WILL BE WITH OUR
WORLD TREND?
 The issue will be much more complex because the situation of the world
has changed significantly. When most Asian countries reached
independence from colonialism in 1950, for example, the world population
was only 2.5 billion people but now the world population is about 6 million
people. Furthermore, in 2025, the world population was predicted about
7.5 billion. In 2050, the population of the world was projected around 8
billion (low projection) to 11 billion people (high projection). Therefore,
within 100 years since 1950, the world population at least will increase by
more than three times[1]. The world’s resources become scarcer.
 If we assume Indonesian economic growth is maintained 5 % a year, using
a simple growth formulation suggest that income per capita of Indonesia in
2050 will be about US$ 8,000. This average level of income achieved by
developed countries in 1977-1978. In addition, a country that has income
per capita around US$ 8000 in 2002 was Saudi Arabia. Income per capita
of Indonesia in 2002 was US$ 710, and in this year income per capita of
South Korea was US$ 9,930. So, observing those figures at least we may
have an intuition or a sense that in 2050 will Indonesia be like South
Korea in 2002?

[1] Source: United Nations, World Population Prospects: The 2000
Revision (New York: February 2001).
COPING WITH UNCERTAINTY
 Whether or not Indonesia will be able to reach
that level of per capita income is uncertain. What
is quite predictably certain is that global situation
in the future will be more intense with
competitions. In fact, there might be also more
intense conflict among nations. One of the most
probable factors for intensifying conflicts in era of
globalization is that there will be more
competition of population on land or space for
life. Most of population in the world in 2020 will
be in Asia and this situation will make Asian
countries to think and work harder and to
maintain a more peaceful condition.
 Agriculture, natural resources
and control over resources
 Agriculture is human activities that dependent on natural
resources. Farmers are individuals or communities that raise their
living from agriculture.
 The development of technology, organization, and management
has induced a new form of agriculture, namely raising livestock or
planting crops by corporation.
 The latter is an application of industry principles into agricultural
practices. King called the latter as industrialization of agriculture
[1].
 In developing countries has been practiced since the middle of
19th century, especially in plantations of industrial crops. A
company in Indonesia may have more than 100,000 hectare. So,
we have majority of small farmers with land size less than one
hectare, and at the opposite side we find a company with land size
more than 100,000 hectare.

• (1) M.B. King, 2000

 OWNERSHIP IMPACT ?
 What are the implications of this pattern of ownerships?
What will be our future of agriculture when majority of
farmers is lack of land but there are a few companies
controlling land, capital, and markets?

 Can we transform our rural economies when majority of

rural people are landless?

 Can we transform national economy from agrarian

economy to industry when most farmers have no control
over land, capital, and agricultural market?

 In other world, can we transform our economy if majority

are the poor and lack of opportunities and minority are rich
and controlling all economic opportunities?
WHAT DEVELOPED COUNTRIES
HAVE DONE?
 Let us learn from the US experience. One of the most interesting
cases with the US is that rapid economic transformation in
reducing number of farmers out of agriculture had not caused
social revolution.
 All transformation is a matter of economic forces. In 1820,
numbers of the US farmers were 71.8 % of labor force, and a
hundred year latter, 1920, number of the US farmers reduced up
to 27 % out of total labor force in the US. (Compare to the
situation of Indonesian now, there are still more than 40 % of
labor force engaged in agriculture).
 In 1940, number of farmers reduced to 17.4 % with average size
of farm 70 hectare (174 acre). In 1994, the number of the US
farmers declined to about 2.5 % and the average land holding size
increased to 191 hectare (471 acre).
 Increasing land holding size was also induced by President
Abraham Lincoln that enacted Homestead Act 1862 that given
opportunities to the US farmers acquired the land with very cheap
price with a unit of the land 65 hectares (165 acres).
 THE INDONESIA TREND?
 What had happened in Indonesia was the opposite case[1]. In
1870 the Dutch colonial enacted Agrarischwet 1870, namely an
agrarian law that allow foreign investor to open and use the land
for plantation. Such types of law is still used up to now, and have
made more than 19.9 million hectares of plantation companies’
controlled land in 2002. If we compared to total wet land (paddy
rice land) in 2002 that only 7.8 million hectares and associated
farmers and labourers 40.6 million persons, then the land holding
size is small (BPS, 2003)[2]. We see that the distribution of land
holding size is very skewed, a tiny land controlled by farmers, and
huge land controlled by corporations.

[1] See (1) S. Kartodirdjo and D. Suryo, 1991. Sejarah Perkebunan

di Indonesia. Kajian Sosial Ekonomi. Penerbit Aditya Media,
Yogyakarta. (2) S.M.P. Tjondronegoro and G. Wiradi (Eds.),
1984. Dua Abad Penguasaan Tanah. P.T. Gramedia, Jakarta.
[2] Badan Pusat Statistik, 2003. Stastistik Indonesia. BPS, Jakarta.
 RURAL-URBAN SYNERGY:
SPREADING KNOWLEDGE
 Economic transformation from agriculture to industry calls for huge
energy. In the developed countries, it is implied by reduction of
numbers of farmers, farmers have energy to transform their position
so that they were or their children were acceptable in the new
employment opportunities. Abraham Lincoln has contributed in this
human resources transformation through Morrill Act 1862, namely the
establishment of Land Grant College in all over the US.
 Therefore, there was an expansion of human resources capacities in
both agriculture and agricultural based industries through
development and application of new knowledge and technology in
those areas. Agriculture and rural areas supplied not only agricultural
product surpluses but also high quality of human resources that
migrated from rural/agricultural areas to the cities that demand for
their labor and skills.
 The economic expansions in cities have induced smaller labor demand
in agriculture and in effect declining number of farmers. Increasing
population has no negative effect in term of reduction of farmers land
holding size, but in the contrary the new situation make scarcer labor
in agriculture. This scarce labor in agriculture induced demand for
mechanization, and the latter increased demand for manufacture
products. Therefore, cities and rural areas have been in a synergy
situation.
 RURAL VS URBAN: OUR CASE
 In Indonesia and in other developing countries as well,
fragmentation and conversion of agricultural land took place. On
the other hand, the growth of industry has no sufficient power to
absorb additional labor force. In South Korea, the share of
agricultural GDP had reduced from 41 % in 1957 to 4 % in 2002;
and such reduction was followed by reduction of agricultural labor
from 70 % in 1957 to 12 % in 2002. We see that any 1.0 %
reduction of agricultural GDP in Korea has been followed by 1.56
% of reduction of labor in agriculture. The same case was also
happened in Malaysia and Thailand but with a smaller reduction
percentage of labor, namely only about 1.02 % and 1.1 %,
respectively. In Indonesia, however, any 1.0% reduction of
agricultural GDP was only followed by reduction of 0.43 %
agricultural labor. Here we see that industrialization in Indonesia
has not produced sufficient energy to make economic
transformation, except only in agricultural GDP term that it has
declined from 56 % in 1957 to 17 % in 2002[1].

[1] Agus Pakpahan, 2004.” Industrialisasi yang menyakiti petani”.
Suara Pembaruan, 17 Nopember 2004, p.5.
 ECONOMIC TRANSFORMATION
& MAJORITY POOR FARMERS
 Economic transformation is difficult to take place where
majority of farmers are small farmers and majority of labor
force are poor.
 Certain designed structural changes related with land or
with agricultural resources must be undertaken and at the
same time, industrial policies should be focused on how to
fasten economic transformation.
 Analogy with what Abraham Lincoln has been done in
1862; Indonesia also needs such a kind of innovation to
support agriculture and rural economies and at the same
time opening new opportunities in industrial and services
sectors.
 One option is to shift agricultural corporations to move to
downstream industries and farmers take over the
ownerships and control in plantations or other agricultural
lands. Market is used in such transformation, and financial
institutions are created to support such plan. The process
could take more than 20 years of operation.
 Broadening Ownerships
 We believe that economic transformation will not take place
as long as majority of farmers and workers are poor and
such situation will continue take place if there is no new
design of broadening ownerships and participation of the
poor into economy.

 It is a basic strategy for sustainable development, namely

increasing what people can do or can be by majority of
people that they are now in poor situation. They potential
energy should be materialized in the form of positive
participation and it calls for the above new design. Social
revolution or social disharmony will threaten Indonesia if
the present situation continues taking place in the future.
 Sufficient food is a matter life and death of our economy
and so for our nation.
Rural Area & Poverty
Import Trend of Cereals
 Revenue of Top Ten Food &
Beverages Company
 Company Revenue (bill US$)

3. Nestle S.A. 54.2

4. Kraft Foods, Inc. 29,7
5. Unilever 25.6
6. PepsiCo Inc. 25.1
7. Archer Daniels Co. 23.4
8. Tyson Foods 23.3
9. Cargill Inc. 21.5
10. ConAgra Inc. 19.8
11. Coca-Cola Co. 19.5
12. Mars 17.0
 Agricultural land per agricultural worker (ha/
worker)

Region 1989-1991 1998-2000

World 4.0 3.8

Develop 29.9 37.6
Developing 2.6 2.5

Source: F.A.O. http://www.fao.org/es/ess/os/envi_indi/part_221.asp

 How much food we need?
 217 million x 120 kg/kapita = 26 million ton of
rice (2004)
 275 million x 120 kg/kapita = 33 million ton of
rice = 55 million ton of paddy (2050)
 Paddy production estimate (2005)= ± 54 million
ton.
 What do we perceive:
• Rice import?
• Hunger & Malnutrition?
• Declining food/population productivity growth?
• How much is our uncertainty & risks?
 Sources of Uncertainties
 Population growth high growth &
imbalance population distribution
 Capacity to produce land conversion &
soil fertility deterioration
 Declining capacity of social capital
farmers’ capacity
 Unfriendly climate & bad harvest
 Political instability
 Infrastructure inadequacy
 Action of Thought
 Redefining food:
• How can we adapt with our nature?
 Healthy & halal food
 New food what is our food

• Food technology & industry

 Flour based food based on local resources
 Food diversity

• Building new culture

 Action of Thought (cont.)
 Regrowing agriculture sustainable
agriculture
• Lesson from Green Revolution
 Farmers remained poor
 Declining capacity to produce food

 Dependency on external sources MNC’s

products
 Declining Environmental Quality
 Action of Thought (cont.)
 Rebuilding Java’s agric. capacity
• Reorganize agriculture
 Integrating food, feed, fuel and fiber

 Corporitazion of farmers

 Infusion of SOEs’ capacity into Farmers

Owned Enterprise (FOE)

 Accelerating Outer’s Island Agriculture:
• Building cities & villages simultaneously
• Agricultural induced regional development
 Where do We Start?
 Java:
• Reindustrializing rice agriculture:
 Producing energy from husk (sekam)
• 30 million ton rice = 10 million ton husk
• Heating value = 3500 kcal/kg
• Heating value/10 million ton husk = 35 trillion
kcal
• 6 MW plant require 7.1 ton/hour 1 MW = 1.18
ton husk/hour
• 10 million ton husk = 8.47 million MW/hour
• Price of electricity Rp 600/kWh
• Value of electricity = ???? huge!!!
 Cont.
 Increasing land productivity
• Leveraging potentials
• Target: 2050 farm size in Java > 5
ha/farmer
• Assure farmers’ welfare
 FOE (farmers owned enterprise as major
instrument).
 Cont.
 Outer islands:
• Natural Resources Specialization:
 Food, Feed, Fuel & Fiber Industrialization
building cities & rural areas simultaneously
How the Dutch built Java?
 Build FOE

• Expansion SOEs
 Building Our Markets
 How to harness MNC
 Increasing farmers’ bargaining power
 Roles of SOEs
• BULOG and other SOE
 Controlling food imports
 Food Nation loyalty food national
identity e.g., serabi vs. pizza
 Building Food Technology & Food
Industries
 Food R&D
 Investment in Food Industries
 Government supports
 Global suports
 Conclusions
 Building new culture in food consumption
 Regrowing agriculture
 Integrating food, feed, fuel & fiber
 Reorganizing agricultural development
 All supports for agriculture
 National food identity
 Food security & food safety is a matter of
Life and Death!
 HERE WE GO!