“Agricultural Sector”
Perekonomian Indonesia #
Authors:
Group 5
o Diva Viona Leonita (21215992)
o Rahmatia Kamala (25215574)
o Nur Azka Amalia Dina (25215174)
FACULTY
OF ECONOMY
GUNADARMA
UNIVERSITY
2016
CHAPTER
I
THEORY
The
Agricultural Sector in Indonesia
A.
Definition of
Agricultural Sector
Agriculture is
one sector which included the use of biological resources to produce a food,
industrial raw materials and energy sources. In Indonesia, there are five
sub-sectors, namely agriculture food crops, plantations, forestry, livestock
and fisheries. Agriculture as an important sector in the structure of the
Indonesian economy. The agricultural sector in Indonesia is experiencing
problems in increasing the amount of food production, especially in the area of
traditional agriculture in Java and outside Java. This is because the limited
land that could be used for farming. The development of the greater population
makes land needs for shelter and various means of supporting community life
also increased. Industrial development also makes technical irrigated
agriculture wane.
B.
Development of the Agricultural
Sector
1.
Farmers in the
days of ancient kingdoms Indonesia
At this
time farming is a staple of life of the people. Government sources of revenues solely
from farming. State revenues mainly consist of payment in kind and services
serf labor. To work on the farm they have been using simple tools such as hoes,
plows, harrows, and a machete made local. Livestock is also the most important
helpers to work the land.
Direct government
intervention to promote agriculture did not exist. Agriculture is the business
of the farmer. The government does not consider it necessary and apparently
also was not considered necessary to know the happenings farming.
2.
Farmers at the
time of colonization
Dutch
came in 1596 in Banten was initially
in order to trade spices. At that time the nations met Portuguese, Spanish,
English, Indian, Chinese, and Arabic are already doing trade with Indonesia.
From an economic point always
consider how much money goes to be received from the Dutch government colonies
in Indonesia, compared to cash out to finance the colonial government.
After going through a
transition period to eliminate the cultivation system, then the Agrarian Law of
1870, Indonesia opened for private capital Dutch, English, and other private
capitals of Europe.
Following the end of the
official liberal in 1900, began in the 20th century what we know with political
ethics. Politics is accepted by the Dutch governmenr after the hard-fought by
supporters as Multatuli.
3.
Farmers
Indonesia after independence
After
independence, the head tax (capitation, or head tax) according to their most
logical to be immediately eliminated. The head tax was abolished in 1964,
followed by the replacement of the land tax to income taxes in 1951, and
changes the use of land with the right property.
C.
Subsector
Agriculture
1.
Food crops
subsector
Food crops is
often also referred to as sub-sectors of the agricultural community. This is
because usually it is the people who cultivate food crops sector, not
corporations or governments. This sector includes commodities foodstuffs such
as rice, maize, cassava, peanuts, soybeans, and vegetables and fruits.
Food crops as
part of the agricultural sector has a very important role in national security,
food security, regional development, poverty alleviation, employment and
foreign exchange earnings, as well as a puller for industrial growth of
upstream and growth drivers for the downstream industry which gives
contribution to national economic growth.
ü Production
Food crop production can be
increased through expansion (extension) and increased productivity
(intensification). The availability of larger farms and production technology
that is able to raise productivity does not in itself will encourage farmers to
be more enterprising plant, unless there is economic stimulus that may be the
price of the means of production are affordable, access to the means of
production, sales price, as well as technologies and means of handling
postharvest able to maintain the durability of the product.
ü Consumption
The development of agriculture
sector not only managed to meet people for food, but also improve people's
consumption patterns.
2.
Plantation Subsector
Plantation sub-sector
is one of the sub-sectors that experienced the most consistent growth, both in
terms of acreage and production. Of some essential commodities in Indonesia
(rubber, oil palm, coconut, coffee, cocoa, tea, and sugar cane), oil palm,
rubber and cocoa growing more rapidly as compared to other plantation crops.
The rapid growth of the three plants is generally related to the level of
exploitation of the commodity profits are relatively better and also government
policy to encourage the expansion of the commodity.
3.
Forestry Subsector
Forestry
subsector institutionally under the auspices of the forestry department, in
contrast to other sub-sectors which were under the auspices of the department
of agriculture. The main results wood forestry subsector. Other forest products
referred to as a byproduct.
Forest
cultivated to take the result is a forest that may or may convert them in the
form of industrial forest plantation area. Production forests are run by
companies based concession.
4.
Sub-Ranch
Farm people have characteristics
as follows:
o
Scale small
businesses
o
Simple technology
characteristically
o
labor-intensive
and family-based home
o
Low
productivity and product quality
Businesses that can be taken to
improve farm productivity include:
a.
Intensification
Implemented by increasing farm
productivity of the people through the eradication of diseases and the
implementation of artificial insemination.
b.
Extensification
Cultivated by concession to
private enterprises in the field of animal husbandry and industrial processing
of livestock products.
c.
Diversification
and quality improvement
Conducted through the integration
farm to other farms.
5.
Fisheries
Subsector
Fishery
subsector in addition to meet domestic demand as well as export commodity.
Judging from the cultivation, this sub-sector is divided into inland fisheries
and marine fisheries.
Fishery
subsector tends to increase from year to year. It is rooted in two factors that
influence it, that is in the number
of household fisheries and fisheries productivity of the number of households
is growing.
This subsector
was not too serious attention from the government, especially when compared
with food crops. This is because the crop is more important than the dominant
fishery.
D.
Importance of
Agricultural Sector
The role of
agriculture in the economy the most important is agriculture as a livelihood
that is able to absorb a lot of labor. For example, the contribution of
agriculture to the economy of Deli Serdang still very dominant, especially in the food crops and plantations.
However, the agricultural sector contribution to the formation of Gross
Regional Domestic Product (GRDP) Deli Serdang regency from year to year tend to decrease.
Exchange Rate Farmers
Farmer as an
important element Farmers Welfare Indicators are used as indicators of the
welfare of farmers is the amount of income and expenditure equivalents. In this
regard one measure that is often used is the exchange rate of the farmers
(NTP). NTP calculations derived from comparative index of prices received by
farmers to the index of prices paid by farmers. The exchange rate farmers
describe the level of exchange power / purchasing power of farmers on the
product purchased / paid by farmers that includes the consumption and
production of purchased inputs. The higher exchange rate of the farmers, the
better the purchasing power of the consumer products and the production inputs,
and means relatively more prosperous.
Simatupang and Maulana (2008)
suggests that the markers unique to the welfare of farm households are
practically non-existent, so NTP becomes the only option for observers
agricultural development in assessing the welfare of farmers. Thus, the NTP is
one indicator of the relative level of welfare of farmers. The higher the NTP,
relatively more prosperous standard of living of farmers (Silitonga, 1995; Sumodiningrat, 2001; Tambunan, 2003; BPS,
2006; Masyhuri, 2007).
NTP concept developed BPS, synonymous with the concept of parity ratio
(parity ratio) which was developed in the USA in 1930 (Tomek and Robinson, 1981). The concept is still used and is
dynamically made some modifications in accordance with the relative changes in
the constituent commodities. The concept of parity ratio is defined as follows:
Parity Ratio =
By using the
general equilibrium theory Rachmat (2000) shows that NTP can be used as a measurement of the level of welfare
of farmers. Conceptually direction of NTP (increased or decreased) is a result
of the direction of each constituent components, namely the income components
that have a positive direction towards the welfare of farmers and the payment
component which has a negative direction toward prosperity. If the acceptance
rate of the component is higher than the rate of payment of the exchange value
of the farmer will increase, and vice versa. Up or down move NTP describes the
rise and fall of the level of welfare of farmers.
More Rachmat (2000) showed that the NTP has characteristics that tend
to decline. This is related to the inherent characteristics of agricultural and
non-agricultural commodities. There are three explanations regarding the
decrease in NTP, namely: (1) The income elasticity of agricultural products is
inelastic, while the product is non-farm tends to be more elastic, (2) changes
in technology at different rates favorable manufacturing products, and (3)
differences in market structure, where the structure of the market of
agricultural products tend to be competitive, while the market structure of
manufactured products tend to be less competitive and lead to market monopoly /
oligopoly.
In general,
the exchange rate has a broad meaning and can be classified into five concept
of the exchange rate, namely: (1) Exchange Barter, (2) Exchange Rate factorial,
(3) Exchange Acceptance, (4) Exchange Rate Subsistence, (5) Exchange Rate
Income, and (6) Farmer (Diakosawas and Scandizzo, 1991; Simatupang, 1992; Simatupang and Isdijoso, 1992; Rachmat et al., 2000; Supriyati et al., 2000).
1) The Barter /
Exchange concept
The
concept of barter (Exchange Barter) refers to the relative prices of certain
agricultural commodities to goods / non-agricultural products. Barter Exchange
(NTB) is defined as the ratio of agricultural prices to the price of 9 9
non-agricultural products. Mathematically formulated as follows:
NTB = Px / Py
Where:
NTB = Exchange Barter Agriculture
Px = price of agricultural commodities
Py = price of non-agricultural commodities
The concept of
the exchange rate is able to identify the relative price comparisons of certain
agricultural commodities on the price of the products are exchanged. Increased
value added means the stronger exchange agricultural commodity prices on goods
exchanged. NTB concept only with regard to certain commodities and products and
are not able to give an explanation with regard to changes in productivity
(technology) in agricultural commodities and the non-agricultural commodities.
2) The Factorial concept
The concept of
factorial is an improvement of the concept of barter, ie by incorporating the
effect of technological change (productivity). Exchange Rates Factorial (NTF)
agriculture is defined as the ratio of agricultural prices to the price of
non-farm, multiplied by the agricultural productivity (Zx). If only pay
attention to agricultural productivity so-called Exchange Rate Single factorial
(NTFT). If the non-farm productivity (Zy) is also taken into account, the
so-called Exchange Rate Factorial Double (NTFG). NTFT and NTFG formulated as
follows:
NTFT = 
NTFT = NTB*Zx
NTFG = 
NTFG – NTB*Z
Where:
NTFT = Exchange Factorial Single
NTFG = Exchange Factorial Ganda
Zx = Productivity agricultural commodities
Zy = Productivity of non-agricultural products
Z = agricultural productivity ratio (x) of the non-farm
(y)
3) The Acceptance concept
The concept of
reception (Exchange Acceptance) is a development of the concept of the exchange
rate factorial. Exchange Revenue (NTR) is an exchange of power reception
(return value) of agricultural commodities that farmers produced per unit
(hectare) on the value of production inputs to produce those results. Thus NTR
describe the level of profitability of certain farm commodities. However NTR
only describe the exchange rate of certain commodities, yet the overall revenue
and expenditure components of the farmers.
NTR
= 
Where:
NTR = Exchange Acceptance
Px = price of agricultural commodities
Py = price of production inputs
Qx = Number of agricultural
commodities produced
Qy = Amount of production inputs
used
4) The
Subsistence concept
The concept of
exchange rate subsistence (NTS) is a further development of NTR. NTS describes
the exchange power of total farm receipts farmers against farmer total expenditure for the necessities of life (Pramonosidhi, 1984). Acceptance of farmers is the sum of the entire
value of the production of agricultural commodities produced by farmers and the
expenditure value of production of agricultural commodities produced by
farmers. Spending farmers is the sum of expenditure on household consumption
and spending on farm production. NTS formulated as follows:
NTS = 
Where:
NTS = Exchange Rate Subsistence
Pxi = agricultural commodity prices to i
Qxi = Production of agricultural commodities to i
PYJ = price of consumer products, PYJ = price of input products
production
Qyi = Total product consumption, PYJ = Number of inputs
As such, NTS
describes the level of exchange power / purchasing power of farmers' income
from farm to farm household expenditure for the necessities of life that
includes consumption expenditure and expenditure on production costs. In
operation NTS concept can only be done at the micro level, the analysis unit
households.
Measurement
Farmer (NTP) in the conception of NTP measure the exchange of agricultural
commodities produced by farmers against farmer products purchased for
consumption purposes and uses in producing farm. The exchange rate of farmers
(NTP Rice) is defined as the ratio between the prices received by farmers (HT)
with the prices paid by farmers (HB) or NTP = HT / HB. NTP measurement is expressed
in the form of an index as follows:
INTP = 
Where:
INTP = Farmers Exchange
Rate Index
IT = gauge of prices
received by farmers
IB = gauge of prices
paid by farmers
The index is a weighted value of the
quantity in the base year. The movement of the exchange rate will be determined
by the determination of the base year because of differences in the base year
would produce a different performance of the index development. The
formulations used index is Laspeyers index (CBS, 1995).
I = 
Where:
I = Index Laspeyers
Qo = Quantity in the base year (year
0)
P0 = Price in the base year (year 0)
Pi = Price in year i
Prices Received by Farmers (HT) price
received by farmers is the weighted price of the price of any agricultural
commodity produced / sold by farmers. The weights used are farmers selling
production value of each commodity. Agricultural price is the average price
received by farmers or "Farm Gate".
Farmers who are referred to in the draft
NTP of BPS are farmers who tried in sub sectors of food crops, horticulture,
smallholder, ranchers, and aquaculture fish farmers and fishermen. Farmers
crops sub-sector includes farmers who strives on rice farming and other crops;
farmer horticulture sub-sector includes farmers vegetables and fruits;
Smallholder farming commodities consists of the people; livestock farmers
engaged in the business of large livestock, small livestock, poultry, and
livestock; fishermen and farmers who include farmers and fishermen catching
fish farming. Prices received by farmers (HT) is formulated as follows:
HT = 
Where:
HT = price received by farmers
PTI =
price of commodity groups in the sub-sector to i (i = food crops, horticulture,
smallholder, livestock and fisheries)
ai = weighting of each sub-sector
to i
Price of each sub-sector are weighted price of the commodity price of each
constituent.
Price Paid Farmers (HB) prices paid by farmers is the weighted price of the price / cost of consumption of food, non-food consumption and production costs and the addition of capital goods from the goods consumed or purchased by local farmers. Commodities produced themselves are not included in the calculation of prices paid by farmers. Prices in question is the retail price of goods and services in the rural market. Prices paid by farmers (HB) formulated the following:
Price Paid Farmers (HB) prices paid by farmers is the weighted price of the price / cost of consumption of food, non-food consumption and production costs and the addition of capital goods from the goods consumed or purchased by local farmers. Commodities produced themselves are not included in the calculation of prices paid by farmers. Prices in question is the retail price of goods and services in the rural market. Prices paid by farmers (HB) formulated the following:
HB = 
Where:
HB = price paid by farmers
PBI = Price group i purchased the
product to farmers
b = weighting of commodity i
i =
Group consumption of food products, non-food (housing, clothing, miscellaneous
goods and services), and the means of production (production factors, non, capital
goods)
NTP BPS concept was developed as a
measure to compare the relative prosperity of farmers. At the beginning of the
preparation, the coverage only farmers who dealt in farming activities in the
food crops (crops and horticultural vegetables and fruits) and smallholder, and
is only done at the provincial level. In accordance with the passage of time,
in 2008, improvements in the coverage measurement NTP both farmers and area
coverage (province). Coverage in the definition of "farmer" was
extended to include farmers who strives on farming activities crops,
horticulture, plantation, animal husbandry (livestock farmers), and fishing
(fish farmers and fishermen).
NTP was developed by national and
regional analysis unit, in order to obtain the advantage because it is a
national and regional economic indicators of the level of regional farmers'
welfare. Via NTP and its components can be determined relative comparison
Farmer Agricultural Commodity Exchange or inter-regional (provincial).
Conceptually direction of NTP (the
welfare of farmers) is a result of the direction each Exchange its components,
namely the exchange rate farmer income components that have a positive
direction towards the welfare of farmers and the exchange rate component of the
payment that has a negative direction on the welfare of farmers. If the
acceptance rate of the exchange rate component is higher than the rate of the
exchange rate component of the Farmer (NTP) will increase, and vice versa.
NTP calculation is an aggregation of the
exchange rate of a constituent. NTP is an aggregation of sub-sectors (that is
food crops sub-sector, sub-sector of horticulture, plantation sub-sector, subsector
of livestock and fisheries sub-sector). NTP food crops sub-sector is composed
of rice and NTP component groups of crops, and crops NTP is composed of
commodity crops (corn, soybeans, and so on) and so on.
The general view that during this
applies as presented BPS is an increase NTP means increased prosperity, and
vice versa. BPS defines and gives meaning NTP as follows:
Figures
meaning NTP:
·
NTP> 100,
means that farmers have a surplus. The production price rise is greater than
the price increase of consumption. Farmers' income increased faster than
expenditures.
·
NTP = 100,
mean farmers suffered even. Increase / decrease in the price of production is
equal to the percentage increase / decrease in the price of consumer goods.
Farmers' income equals expenses.
·
NTP <100,
meaning farmers deficit. The increase in the price of production is relatively
small compared to the rise in prices of consumption goods. Farmers' income
drops, smaller than its expenditures.
Uses and Benefits
§
Index of
Prices Received Farmers (It), can be seen fluctuations in the prices of goods
produced by farmers. This index is used as well as supporting data in the
calculation of agricultural income.
§
Index of
Prices Paid Farmers (Ib), can be seen fluctuations in the prices of goods
consumed by the farmers who constitute the bulk of the people in rural areas,
as well as fluctuations in the price of the goods needed to produce
agricultural products. Ib development can also describe the development of
inflation in the countryside.
§
NTP have
utility to measure the ability to exchange products sold farmers with the
products needed by farmers in production and household consumption.
§
NTP Figures
indicate the level of competitiveness of agricultural products compared to
other products. On the basis of these efforts specialty products and improving
the quality of agricultural products can do.
Commodities coverage
o
Sub Sector
Food Crops such as rice, pulses
o
Horticulture
Sub Sectors such as: vegetables, fruits, ornamental plants and medicinal plants
o
Sub Sector
Crop Plantations (TPR) such as: oil, robusta coffee, clove, tobacco, and cotton odolan. Total commodities also varies between regions
o
Sub Sector
Livestock such as: large livestock (cattle, buffalo), small livestock (goats,
sheep, pigs, etc.), poultry (chicken, duck, etc.), the results of cattle (cow's
milk, eggs, etc.)
o
Fishery Sub
Sector, both capture fisheries and aquaculture.
Investment in
Agricultural Sector
The Government
is committed to encouraging the growth of investment in the agricultural
sector, especially in horticulture (fruits and vegetables), especially upstream
and nutrients. As an agricultural country, Indonesia put the agricultural
sector as one of the excellent in spurring national development.
The Government
suggests investors pay more attention to an important sector of investing
today. Because in the face of the world food crisis, the food sector will reap
substantial profits. With the condition of the world food crisis, the food
sector will be a problem not only in Indonesia but also in the world.
Conditions that may be an opportunity for investors.
Investment in the agricultural
sector depends on:
1.
The rate of
output growth
2.
Level I global
competitiveness of agricultural commodity
Any investment subdivided
into two, namely:
1.
Direct
(submission or purchase of machinery)
2.
Indirect
(research or submission)
Investment in
the agricultural sector has an impact on the national economy. In 1991 the
agricultural sector contributed 17.66% to the national GDP and absorb 49.24% of
the national workforce. Besides, the agricultural sector sustain life
approximately 77.74% of Indonesia's population who live in rural areas where
the population is predominantly work as farmers.
The Investment
Coordinating Board noted the interest in investing in the agricultural sector
continues to increase. The increase was up 134.8%, based on the permit application
accepted principle. Of the 20 investors, 16 of whom have submitted plans an
investment of US $ 2.33 billion for investment in Indonesia (for the
agricultural part).
Linkages with the Agricultural Manufacturing Industry
If you want to
look in the mirror of a country that had previously advanced than in Indonesia,
in the beginning they (developed countries) focuses on developing their economy
on agriculture for later developed and shift slowly into the industrial sector.
This change does not take place abruptly but rather with a series of long
process and would serve as the foundation of agriculture, both as providers of
raw materials and capital to build the industry.
One of the
causes of the economic crisis that is an error that is not based on agriculture
industrialization. It seems that the
growth rate of the agricultural sector to grow albeit small, while the
manufacturing industry reduced. Japan, Taiwan, and Europe in advancing the
manufacturing industry revolution begins with the agricultural sector.
Given this
fact, we ought to distort the economic rudder to step back to plan and then
execute with discipline every process that occurs. The most important thing
that should be ensured that the agricultural sector is given priority in the
development process. Given up to this time the developed countries were not
able to leave their agricultural sector, so that if we now try to look at the
agricultural sector classmates developed countries, the agricultural sector
they got great protection from the state in the form of subsidies and other
assistance.
There are
several reasons (presented by Dr. Tulus Tambunan in his book Economic Indonesia) why a strong agricultural
sector is essential to the process of industrialization in the country of
Indonesia, which is as follows:
1.
The
agricultural sector is a powerful means of food security is assured, and this
is one important prerequisite for the process of industrialization in
particular and economic development in general can take place properly. Food
security means no hunger and this ensures social and political stability.
2.
From the
aggregate demand side, the development of a strong agricultural sector that
makes the level of real income per capita in the sector is high, which is one
source of demand for nonfood goods, especially manufacturing. Particularly in
Indonesia, where most of the population residing in rural areas and have a
source of direct income from agricultural activities, obviously this sector is
the main motor driving the industrialization.
3.
On the supply
side, the agricultural sector is one source of input for the industrial sector
where Indonesia has a comparative advantage.
4.
Still on the
supply side, a good development in the agricultural sector could generate a
surplus in the sector and this could be a source of investment in the
industrial sector, especially the small-scale industry in rural areas.
The reality in Indonesia linkages of production agriculture and
manufacturing industry is very weak, and both sectors are highly dependent on
imported goods. Looking at it, it is very important to us synergize in
improving agricultural productivity. The government in this case the
stakeholders, make regulations that have a purpose that is consistent with our
goals, budgeted funds for agricultural development, providing knowledge with
the empowering force agricultural extension workers to help farmers with the
maximum, the bank in this case the providers of public funds can be friends
with the farmers, so that limited funds can be solved with the help of banks as
providers of funds with a small flower, the college is very important to
conduct studies masiv and can be applied immediately to improve agricultural
productivity, the private sector is expected to invest their capital to make
the mill processing plant agricultural products us so that when we want to
market it to the outside (exports) then we will be able to generate more
revenue (due to the higher value) and of course the people (farmers) as being
subject to the really serious in running any program given the government
(assuming: a program created by the government in accordance with the needs
required by the farmer).
When it goes well, then we can increase our agricultural products in line
with the increase in the manufacturing industry that require raw materials that
we produce from our farmers. Therefore, the increase in farmers' income will be
positively correlated to the increased welfare of farmers and increase economic
growth.
CHAPTER
II
CASE
AND ANALYSIS
NGOs’ changing roles in sustainable
agro industry
Edi Purwanto and Soren Moestrup
Jakarta/Copenhagen | Mon, May 30 2016 | 07:41 am
Indonesia’s economic
development and resource utilization are largely driven by global demand. At
present a large part of natural-resource management is in the hands of the
private sector.
Palm oil is a prime example,
as the unprecedented growth in global demand, during the past 20 years, has
resulted in major changes in land use in the country. Without strong governance
and law enforcement on natural resources and land use, the expansion of palm
oil production has resulted in a dramatic loss of forests through
deforestation, as well as ecosystem degradation.
During the last decade,
growing consumer expectations that agro-commodities should be environment
friendly and sustainably produced have provided drivers for civil society
campaigns on investor and company producer practices to better comply with
environmentally friendly and socially sensitive commodities. Such consumer expectations
and campaigns have become new drivers of sustainable resource management and
utilization in production chains, as well as at landscape level and have as
such supported the government in law enforcement on the sustainable production and
use of natural resources.
Consumers and investors are
participating in commodity-specific forums, such as the Roundtable on
Sustainable Palm Oil (RSPO), which has initiated strict standards preventing
oil-palm plantation development in areas with a high carbon stock (HCS) or of
high conservation value (HCV). The sustainability standards, to which RSPO
members are committed, can lead to a positive environmental impact on the
development of new palm oil plantations. RSPO members have an obligation to compensate
HCV areas that have been lost to deforestation since 2005.
Given RSPO members control
the largest palm oil concessions in the country, the scheme, in combination
with a declining palm oil price, reduced the establishment of palm oil
plantations by more than half a million hectares per annum in the period of
2007-2013.
Consumer expectations on
environmentally friendly and sustainably produced agro-commodities have also
led to an unprecedented increase in the number of companies that have adopted
strict environmental regulations on sustainable management and production
systems.
Prime examples include APP
Pulp and Paper, which in 2013 first published its sustainability targets
announcing an immediate halt to natural forest clearing throughout the supply
chain. Major palm oil companies Wilmar International, Cargil Inc., Golden Agri
Resources, Asian Agri and Musim Mas have signed the Indonesian Palm Oil Pledge
(IPOP), “No deforestation, no peat, no exploitation policy”, which is a
commitment to transparency, accountability and to ensuring compliance of all
third-party suppliers. Oil palm and pulpwood plantations take up about 11
million ha and 3.5 million ha (out of 10 million ha granted permits) of land in
Indonesia, respectively.
The growing concerns on
environmental safeguards have also been well responded to by the government. As
part of a larger goal of reducing deforestation and carbon emissions, President
Joko “Jokowi” Widodo extended, in May 2015, a moratorium on the clearing of primary
forests and peatlands.
It was the second time the
ban on issuing concessions to plantation companies had been renewed since a
presidential decree was issued in 2011. In May 2016 the President plans to
issue a decree on the suspension of new oil-palm plantation development. This
applies to the suspension of the Environment and Forestry Ministry’s authority
to release convertible state production forests (outside the existing
moratorium map) for palm oil plantations.
How do the conservation NGOs in this country respond to this development?
How do the conservation NGOs in this country respond to this development?
NGOs have come to realize
that anti-corporate demonstrations, organized boycotts, and protests can be far
more effective and powerful than anti-government campaigns, particularly when
targeting established, reputable global brands. In response, corporations have
attempted to identify and select the available areas and opportunities to
cooperate with NGOs to cement fruitful relationships. Some leading conservation
NGOs are involved in safeguarding the environmental sustainability of leading
palm oil and pulp and paper companies.
When building partnerships
with the private sector, the NGOs should not forget their long-term watchdog
function and therefore continuously monitor the environmental effects of
private companies’ involvement in the protection of Indonesia’s natural
resources.
NGOs should be able to
manage the impacts of IPOP on smallholder plantations; they have to facilitate
buyers, producers, banks and other financial institutions with a practical
guide on how to engage with smallholder farming-related challenges and
opportunities, especially on access to markets, financing innovation, improving
legality, preventing deforestation and remediating agricultural labor problems.
With reliable, verified and
well-framed evidence, NGOs have strategic roles in assisting government and
frontrunner companies to create and strengthen strategies in multi-stakeholder
dialogues on policy change that improve smallholder resilience and
sustainability.
________________________________
Edi Purwanto is a director of Tropenbos International Indonesia. Soren Moestrup is senior adviser at the Department of geoscience and natural resource management at the University of Copenhagen.
________________________________
Edi Purwanto is a director of Tropenbos International Indonesia. Soren Moestrup is senior adviser at the Department of geoscience and natural resource management at the University of Copenhagen.
ANALYSIS
Economic
development and utilization of resources in Indonesia, largely driven by global
demand that currently exists in private hands. Palm oil is a plant that has
resulted in major changes in land use in the country, and resulted in a
dramatic loss of forest through deforestation and degradation of ecosystems. So,
there is growing consumer expectations that agro-commodities must be
environmentally, friendly, and sustainably produced.
Consumers
and investors to participate in forums specific commodity, such as the RSPO,
HCS, or HCV. RSPO is granted the authority to control palm oil concession scheme in combination with palm oil prices to decline and
reduce the formation of palm oil than half a million hectares per year in the
period 2007-2013.
Prohibition of issuing concessions to the estates have
forthcoming since a presidential decree in 2011. Then in May 2016, the
president plans to issue a decision on cessation of the construction of new
palm oil plantations. This applies for the suspension of the Environment and
the Ministry of Forestry authorities to release the convertible production
forest countries (outside the existing moratorium map) for palm oil
plantations.
NGOs realize that the anti-corporate demonstrations,
organized boycotts, and protests can be more effective and powerful than the
anti-government campaign, especially when targeting established, a leading
global brand. Some conservation NGOs involved in environmental preservation
company’s leading palm oil, pulp, and paper. NGOs have a strategic role in
assisting the government and the pioneer company to create and strengthen
strategies in multi-stakeholder dialogue in policy changes that increase the
resilience of farmers and sustainability.
REFERENCES
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