“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:
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:
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.
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:
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:
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).
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:
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:
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
