Opinion Editorial by Dr J. Jackson Ewing, Fellow, RSIS Centre for Non-Traditional Security Studies, Nanyang Technological University

The Archipelago Looks Inward

In October 2013, Indonesian President Susilo Bambang Yudhoyono launched a strategy to curtail imports and seek greater self-sufficiency in strategic food sectors. The President’s ‘Action Plan’ calls for 90% of food to be domestically produced by 2014, and he painted images of a future Indonesia less beholden to its neighbours and more resilient to fluctuating global food prices. With the Yudhoyono administration now in its final months, those campaigning to replace it appear determined to prove their nationalist credentials and are likewise pushing inward-looking solutions to food challenges. In the shadow of years of price volatility, food self-sufficiency is good politics in Indonesia.

This is neither new nor surprising. In 1972 dry season rice crops faltered across a wide swathe of Southeast Asia, and Indonesia – which had felt confident in its rice stores – was flung into an import market marked by rising prices and sourcing uncertainties. The trauma of this event has never fully left Indonesia’s strategic psyche, and subsequent efforts towards food self-sufficiency have found diverse and receptive audiences. Similarly to the 1970s, however, Indonesia faces systemic challenges on multiple fronts, and the attainability of sufficiency goals along with their efficacy for national food security is far from clear.

Domestic Food System Challenges

Indonesia has inefficient food value chains and poverty levels that place adequate nutrients out of reach for millions of households. It is attempting to increase domestic food production at the same time that it develops urban infrastructure, expands land-intensive industries such as palm oil and pulp and paper, and more stridently protects forests. Its surface and groundwater sources are degraded and often poorly managed, and it faces comparative disadvantages in producing some key crops – including rice – relative to its neighbours. It is a largely unattractive destination for agriculture investment due to regulatory and infrastructure shortcomings, and its agricultural research sector suffers from years of low resource allocation.

Indonesia’s primary domestic charge is to increase physical and economic access to food, which requires modernising its food value chains. The sprawling nature of the archipelago creates unavoidable distribution challenges, and Indonesian infrastructure struggles to move produce efficiently from farms to consumers. Costly toll roads and poor electrification and refrigeration systems drive prices up, cause substantial food spoilage and impede the expansion of distribution networks. Systemic changes that do occur struggle to pace with the shifting food choices and ways of accessing food up that are accompanying the country’s 2.5% annual urbanisation rate. Any national food strategies, moreover, must be pursued in the context of ongoing political decentralization and the diverging local approaches that it entails.

Indonesia’s decreasing natural capital further hinders its domestic food system prospects. Pressure on agricultural land is increasing while water challenges become more formidable. Damaged and ineffective irrigation networks limit efficient water usage, and have contributed to Indonesia’s failure to reach its 2013 rice production goals. Pollution and growing threats from flooding threaten areas of relative water abundance. National oversight of water management is mired by complex and at times convoluted regulatory structures, and basin-level initiatives are often difficult to realise across increasingly autonomous local governments. The Agricultural Ministry estimates a price tag of just over USD 2 billion to revamp irrigation systems, some of which has been earmarked. Finding funding to address water pollution and emergent land challenges, including those stemming from growing industrial and municipal uses, appears less encouraging.

The Allure and Limitations of Self-Sufficiency

The challenges are formidable, and eschewing imports for improved domestic production and distribution may further strain Indonesian systems that are ill-prepared to respond. A 2012 OECD review of Indonesian agricultural policies warned that relying on domestic production may cause supply and price fluctuations. This appears to be happening. Recent import quotas have seen supplies drop and prices increase in soy, leading to imposed price ceilings and further interventions, and beef, leading to the relaxation of import restrictions and uncertainty about their future. Import controls are also vulnerable to corrupt practices, with a prominent politician arrested in 2013 for accepting bribes for beef quotas and current public outcries over an alleged garlic ‘cartel’ responsible for rapid price increases.

Engaging with international markets will not solve all such problems, but it can facilitate relationships between consumers and producers that the government will struggle to attain. Interacting with regional and international markets creates opportunities for Indonesia to capitalise on comparative advantages and symbiotic relationships with trading partners, further diversify its economy, preserve and enhance its national capital, and deliver diverse, affordable and nutritious foods for its populace.

There are signs that future Indonesian leaders will be compelled to do so, despite the political benefits that come from trumpeting domestic food sovereignty. The ASEAN Economic Community goals for creating a freer regional trade environment have specific market access stipulations for agricultural commodities, and could undermine Indonesia’s drive to restrict food imports. Pressure from further abroad is also coming to the fore, with the United States issuing a WTO challenge in 2013 asserting that its access to Indonesian food markets was being unfairly hindered. The dispute is unresolved, but the challenge’s lodgement reveals the external pressure that Indonesia faces.

The political attractiveness of promoting food self-sufficiency is battle tested, however, and may well dominate Indonesia’s food strategy far beyond the leadership transitions of 2014. There appears to be broad support across parties for inward-looking food policies, and this support may continue even as the country fails to meet it current self-sufficiency targets. This would be detrimental to the food security prospects of Indonesian citizens.

There is a balance to be found, and creating more robust domestic food systems need not come alongside Indonesia’s sweeping abandonment of international markets. Finding the balance will require that Indonesia place greater trust in the stability of import access and prices. This will only occur if leaders have reason to view international markets with less rancour, and have the political will and capital to help destigmatise food imports in the eyes of the population. If affordable, diverse, high quality imported foods appear consistently available to Indonesian consumers, this may not be such a difficult sell.

If you wish to contact the author, please write to isjjewing@ntu.edu.sg

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