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Report, a compilation based on field fact findings, and other written materials

Report, a compilation based on field fact findings, and other written materials

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Food crisisindonesia seacon-1999 Document Transcript

  • 1. Fact Finding Mission of Seacon FS & FT on Food Crisis in Indonesia Compiled by Riza V. Tjahjadi MANUFACTURING A CRISIS: The Politics of Food Aid in Indonesia 2Report of the Fact Finding Mission of SEACON January – February 1999by The Southeast Asian Council for Food Security & Fair Trade (Seacon FS&FT) Reaction from WFP 42 Field ReportDr. A.Z.M. Obaidullah Khan, the former director of the FAO Asia Pacific; Notes on Jakarta 45 East Timor : Policies at Command 48 Info (opinions and observations) Collected during Fact Finding Mission 51in NTT and East Timor Riza V. Tjahjadi Bantuan Pangan Dalam perspektif Hibah dan Hutang. Catatan untuk 64Advokasi Infid(sebagian, update dari Draft Report on Food Crisis in Indonesia)dipersiapkan oleh PAN (Pesticide Action Network) Indonesia Infid Statement on Food Aid 74 Background, compiled by RVT, PAN Indonesia 77 Question and comments PAN (Pesticide Action Network) Indonesia Jl. Persada Raya No. 1 Menteng Dalam Jakarta Selatan Telp. +62-8296545; e-mail: biotani@rad.net.id Jakarta, 23 May 1999 1
  • 2. MANUFACTURING A CRISIS: The Politics of Food Aid in Indonesia Report of the Fact Finding Mission of SEACON January – February 1999 Host in Indonesia was Riza Tjahjadi of Pesticide Action Network Indonesia, Indonesia The Southeast Asian Council for Food Security & Fair TradeThe Southeast Asian Council for Food Security & Fair Trade, formerly known as the Southeast Asia Liaison Committee, was establishedduring the Southeast Asian NGO Conference on Food Security and Fair Trade held in Manila from February 13- 16, 1996. The meetingbrought together individuals and groups from throughout Southeast Asia to discuss the impact of trade liberalization and economicderegulation on food security and people’s livelihoods. The guiding principles of the Southeast Asian Council for Food Security & FairTrade were laid down in the historic Balay Declaration, which called on governments in the region to make food security for all citizens acornerstone of economic policy.The Southeast Asia Council for Food Security & Fair Trade is composed of representatives from seven Southeast Asian countries. Theserepresentatives are drawn from large networks of organizations working on food security and trade related issues. Their work is conductedon many levels, from lobbying to national governments and regional institutions, to working directly with grassroots organizationsaddressing gender, sustainable agriculture and human rights issues among others.The Southeast Asian Council for Food Security & Fair Trade focuses on research and advocacy within the context of agricultural trade anddevelopment policies, as well as other issues affecting food security in the Southeast Asian region. Through this, the Southeast AsianCouncil for Food Security & Fair Trade is able to promote a common policy on food security in international and regional bodies. As riceis the staple food throughout Southeast Asia, the Southeast Asian Council for Food Security & Fair Trade is focusing its research onregional policies in rice security, and is therefore in a position to make recommendations that furthers regional food security.The present members of the Southeast Asian Council for Food Security & Fair Trade are:• Isis International – Manila, Philippines• Focus on the Global South, Thailand• Pesticide Action Network – Asia Pacific, MalaysiaVietnamVietnam Partnership for The Development of Human Resources in Rural Areas (VIETDHRRA)Represented by:• Vietnam Gardening Association (VACVINA)• Center of Agricultural Extension Volunteers (CAEV)PhilippinesPhilippines NGO Liaison Committee for Food Security and Fair Trade (PNLC)Represented by:Management and Organizational Development for Empowerment, Inc. (MODE)Alternative Forum for Research in Mindanao (AFRIM) 2
  • 3. IndonesiaPesticide Action Network – Indonesia (PAN-1ndonesia)Indonesia Forum for Environment (WALHI)Represented by:Pesticide Action Network – Indonesia (PAN-1ndonesia)MalaysiaMalaysian Committee for Food Security & Fair TradeRepresented by:A-P Secretariat for Consumerism, Advocacy, Research and Education (APS-CARE)Education and Research Association for Consumers, Malaysia (ERA Consumer, Malaysia)LaosSustainable Agriculture Forum (SAF)Represented by:Norwegian Church Aid – Laos (NCA)Coordinator of SAFThailandAlternative Agriculture Network (AAN)Represented by:Rural Reconstruction Alumni and Friends Association (RRAFA)Coordinator of AANCambodiaNGO Forum on CambodiaRepresented by:Partnership for Development in KampucheaCambodian NGO Alliance for Cooperation (CNAC)The present chair of the Southeast Asian Council for Food Security & Fair Trade isDr. Walden Bello from Focus on the Global South and the vice-chairs are Aurora Regalado of MODE,Philippines and Marimuthu Nadason of ERA Consumer, Malaysia. 3
  • 4. EXECUTIVE SUMMARY As the US and European Union finalise plans to ship large quantities of food aid to Russia, a senior diplomat at a western embassy in Moscow sums up the situation bluntly: “I don’t know of a single person in this building who thinks it is necessary”….”There is no shortage in this country,” says one Moscow-based aid expert. “The US and the EU have different reasons for sending food, and the Russians are willing accomplices, but by no means is this a humanitarian effort.” He says aid would be best spent purchasing food within Russia to redistribute to poorer regions or on providing credit and assistance to Russian farmers. Financial Times, Feb. 5, 1999The foregoing account could well be a description of the current situation in Indonesia. Despitewidespread reports to the country, Indonesia is not suffering a famine or food crisis in the traditionalsense. This is the firm conclusion of an investigating mission that visited Indonesia in late Januaryand early February 1999, under the sponsorship of the Southeast Asia Food Security and Fair TradeCouncil.The 16-member mission visited several sites in Jakarta, then fanned out to other parts of thearchipelago. They focused on data gathering at the micro or community level through semi-structured interviews with the urban poor, farmers, small rural trades people, fisherfolk, governmentofficials, various church groups, non-governmental organization (NGOs) and relief organizations.Correlation of micro-data with macro-data yielded the main conclusion, that the so-called “foodcrisis” stemmed from mistaken projections of rice output. These projections were then manipulatedby certain forces within the country and used to consolidate their political position – with aidagencies acting as witting or unwitting accomplices.The critical steps in this manufactured crisis are the following:I. Two key agencies, the Food and Agricultural Organizations (FAO) and the World Food Program (WFP). Project a massive food shortfall following a survey, which used questionable methods. The FAO/WFP crop and food supply assessment missions to Indonesia issued Special Reports on 17 April 1998, 6 October 1998 and 8 April 1999. In each of these reports, the actual figures of rice shortage have been inflated by factoring in the amounts of rice held in storage by Bulog, the private sector and households. (See appendix 1)II. On the basis of this projection, the government issues an international call for food aid, which leads to Indonesia becoming the world’s top recipient for food aid in 1998.III. The drought-caused famine projected by the FAO and WFP did not materialized. However, food aid is re-targeted by the government and aid agencies, like the World Food Program, from the countryside to the cities in order to pacify people who have been laid off as a result of the financial fiasco caused by the government and International Monetary Fund’s macroeconomic policies. As one consultant to a key agency told our team members, “Hungry people are angry people.” 4
  • 5. IV. The government then uses the aid, not only for social pacification, but also as a mechanism for gathering and consolidating electoral support for the June 1999 elections.This is not to say that economic conditions in Indonesia are not bad, they are. However, theseconditions do not call for food aid. They call for economic policies that will provide jobs andincome for people to enable them to eat consistently and have an adequate diet and buy goods andservices to meet their other needs. Aside from serving questionable political ends, food aid in thiscontext can only serve as a superficial solution to a larger structural problem.The problem has two dimensions, both short-term and long-term. In the short term, the crisisstemmed from the massive loss of confidence among foreign speculative investors. This led to ahemorrhage of capital that triggered the collapse of most of the country’s financial institutions and agreat many of its key corporations. However, this short-term crisis has its roots in a developmentmodel imposed on the country over the last three decades by the Soeharto dictatorship and the WorldBank. The elements of this model, which have been unraveling in spectacular fashion over the lasttwo years, are:I. development based on foreign capital and foreign markets;II. an industry-first policy, or a strategy that subordinated agriculture to industrial priorities; andIII. within agriculture, the implementation of a Green Revolution-based monoculture.Agriculture is in trouble in Indonesia, but it is a crisis that is strictly man-made, not one that stemsfrom drought. A huge dependence on fertilizers and other chemical inputs characteristic of GreenRevolution technology, has resulted in a fragile agro-technology that can easily be unraveled bypolicy decisions, like the ending of the fertilizer subsidy. Pushing rice as the staple crop at theexpense of other crops, even in regions that formerly consumed non-rice staples, has created dietarydependence on a crop ill-suited to the climate and geography of those areas.Indonesia is not experiencing a classical crisis of hunger. It is experiencing a man-made economiccollapse. What its people need is not food aid but economic and agricultural reforms of afundamental kind, which will create the jobs and income that will enable them to surmount not onlyhunger but also poverty. Indonesia’s problems are not the result of climactic changes. They havetheir origins in the very structure of the economy. PART 1: INTRODUCTIONReports of famine and hunger coming out of Indonesia have alarmed the world in the course of 1998and 1999. Coming on top of the grave economic and political crisis being experienced in thecountry, this news has naturally elicited serious concern, especially in Southeast Asia, humanitarianconsiderations have certainly been uppermost, but the crisis has also been source of great worry,since Indonesia needed to import more than 25 percent of the rice available in the world market in1998. 5
  • 6. In recent months, however, news has filtered out of Indonesia contradicting the official picture. Theworry about a famine was apparently greatly exaggerated. Many agricultural communities were saidto be prospering in the midst of crisis. Indeed, the inflow of food aid that began in late 1998 elicitedprotests, including the refusal of one of the largest NGO’s in Solo, Java to distribute milk powder atthe request of some donors.As more conflicting reports emerged, more questions came to the fore, such as:• How could a country that was supposed to have one of the most successful agricultural systems in the developing world, lurch into a crisis of hunger simply as a result of a financial crisis and a relatively short drought?• If indeed a serious food crisis did not exist, was the diversion of global food aid to Indonesia depriving other, more deserving countries and peoples in crisis, such as North Korea or the refugees in Kosovo? This was not a theoretical question since Indonesia emerged as the world’s largest recipient of food aid for 1998.In view of these conflicting reports, the Southeast Asian Council for Food Security & Fair Tradedecided to send an investigating mission to Indonesia to ascertain the actual state of food security.The fact-finding teamThe fact-finding Mission took place from 24 January to 6 February 1999. Our host inIndonesia was Riza Tjahjadi of Pesticide Action Network Indonesia, Indonesia;. The overallcoordinator for the fact-finding mission was Li Kheng Poh, Executive Secretary of theSoutheast Asian Council Food Security and Fair Trade. Luisa Caparas and Bagong Suyotoprovided assistance in coordination of logistics in Jakarta. The members of our team wereFrancisco Lara, Jr. of the University of the Philippines, Philippines; Cass Evert (translator) ofPIJAR, Indonesia; Ovan Sopandi of Pesticide Action Network, Indonesia; Marco Mezzera ofFocus on the Global South, Thailand; Simon Karunagaram of ERA Consumer, Malaysia;Indra Tata Purwita of WALHI (Friends of the Earth, Indonesia); Walden Bello of Focus onthe Global South, Thailand; Tran Hong Truong of Vietnam Gardening Association-VACVINA, Vietnam; Daycha Siripatra of Technology for Rural and Ecological Enrichment-TREE, Thailand, John-David Comtois of Rural Reconstruction Alumni and FriendsAssociation (RRAFA), Thailand: Dr. A.Z.M. Obaidullah Khan, the former AssistantRepresentative for Asia and the Pacific; Congressman Leonardo Montemayor and formerSenator Leticia Shahani, both of the Philippines; and Anuradha Mittal of Institute for FoodDevelopment policy-Food First, USA.Sites visitedJakarta, East Timor and four provinces of Indonesia (West Java, Central Java, East Kalimantan,Nusa Tenggara Timur) were selected for the purpose of the mission. The selection criteria werebased on accessibility to communities through local NGOs working on food and agriculture issues.We visited West Java, Jakarta, Central Java (Yogyakarta, Solo, Pacitan, Rembang), East Kalimantan,Nusa Tengara Timur (Kupang) and East Timor. We visited with the urban poor, farmers, small ruraltrades people fisherfolk, government officials, various church groups, non-governmentalorganizations (NGOs) and relief organizations in all of these locations. 6
  • 7. MethodologyThe mission investigated the cause and impact of food insecurity; the regional variations in foodinsecurity; the gender and ethnocultural differentials in food insecurity; and the accuracy of data thatis being provided by multilateral institutions. We also looked at issues relating to production,distribution, purchasing power and levels of food intake (e.g., Is there real starvation? If there is,what is its source? Is low food intake related more to structural conditions such as poverty andinequality?}The main method of data gathering at the micro or community level was through semi-structuredinterviewing. The team collectively and critically discussed the interview results. The analysis andwrite-up team brought together the final analysis of the micro data and integrated it with macro data.Organizations and individuals consultedIn Bangkok, we would also like to thank Father Hardaputranta S.J. of Xavier Hall for his valuableassistance. In Jakarta, besides visiting several urban poor communities, we met with the Minister ofFood Affairs and Horticulture, A.M. Saefuddin, Ministry for Women’s Affairs, the FAO, WFP,several NGOs, the World Bank, Bulog (National Logistics Agency) and Bappenas (the NationalPlanning Agency).Other organizations and individuals, located both in Jakarta and other parts of the country, whichassisted us, or which we visited or spoke to were: Terre Des Hommes; Caritas/LPPS Jakarta; Mrs.Belen Fule-Anota, Deputy Chief of Mission, Embassy of the Republic of the Philippines; AULIA;YASPUK (Yayasan Pendamping Perempuan Usaha Kecil); PPSW (Pusat PengembanganSumberdaya Wanita): Professor Bungaran Saragih (Institut Pertanian Bogor); Jennifer McAvoy,Oxfam Great Britain; Catherine Hurst, AUSAID; Bill Barclay and Philip Clarke of the World FoodProgramme; CUSO Indonesia; YLKI (Yayasan Lembaga Konsumen Indonesia); YayasanKesejahteraan Darussalam; Yayasan padi Indonesia; Bapedalda (Environment ManagementAgency); Plasma; Rio Tinto Foundation; CARE International Professor Loekman Soetrisno ofUniversity Gadjah Mada; Yayasan Mitra Tani; Father G. Utomo and HPS (Hari Petani Sedunia);USCF/Satunama; LPTP (Lembaga Pengembangan Technologi dan Pendesaan); the CRS EmergencyProgram in Kupang; PIKUL (Yayasan Pengembangan Institusi Dan Kapasitas Lokal); Don Bosco;the Governor of Nusa Tenggara Timur; Plan International, Dolog; Solidamor-Solidarity for Peace inEast Timor; PIJAR; the Salesian Order in East Timor, especially Brother Santos, FatherVttaparambil and Father Locatelli; FOKUPERS; ETADEP; Caritas Dili, UNICEF Dili; CAREInternational Dili, YHAK (Yayasan Hak); CNRT (Council for National Resistance of East Timor);DSMTT (Democratic Student’s Movement in Timor Timur); OSK-TL (Youth Solidarity Group) andLSK (Lembaga Studi Kemasyarakatan dan Bina Bakat)To these individuals and groups we offer our sincere thanks and heartfelt appreciation for all the helpand time they provided, without which the trip could not have been possible. 7
  • 8. PART II SITE REPORTSThe visits to selected parts of the archipelago yielded the following conclusions:I. There was no evidence of starvation in either urban or rural areas.II. A brief drought at the end of 1997 and early 1998 resulted in food shortages in some areas, such as parts of East Kalimantan and NTT, but not starvation.III. Malnutrition and decreased food intake is evident in some rural and urban poor areas, but this is not because of physical/climatic factors, but social ones, like the collapse of purchasing power owing to the financial crisis.IV. Almost universally, respondents said that the answer to their weaker purchasing power was not food aid but stable jobs that yield stable incomes.V. Respondents reported widespread inefficiency and abuse of government food distribution programs, including inadequate subsidization of food for poor communities or the distribution of food packages weighing less than the officially mandated weight.JakartaWe visited several urban slum areas, one of which is located in Northern Jakarta. In this place, theNGO AULIA, besides its nutritional program, provides special houses for girls that have beenabused. It was reported that during the economic crisis, the sale of children – especially young girls– increased, with the selling price for girls reaching Rupiah 3 million. The children helped their parents earn money by collecting old nails and other metal scraps, begging and playing music along the streets and cleaning car windows.The common pattern of the families we visited was one where the male head of the household isoften the only breadwinner in the family. With the economic crisis, the men lost their jobs, and thechildren shouldered the responsibility of looking for an alternative source of income. The childrenhelped their parents earn money by collecting old nails and other metal scraps, begging and playingmusic along the streets and cleaning car windows. They were the poorest of the poor in Jakarta.Many of the children were male since young females were generally kept from going out in thestreets for security reasons. Girls usually try to find employment as housemaids.The diet of most families had worsened since the onset of the economic crisis. Only rice, salted fish,tempe and kangkung (a type of water spinach indigenous to Southeast Asia) were being consumed.Fish, meat and fruits are not affordable. Previously, fresh fish and enough food for an entire familycould be bought with only Rupiah (RP) 5,000. Today, Rp 10,000 is sometimes not enough to feed afamily.Sembako (Sembilan, Bahan Pokok –nine major staple foods) packages were available but thefamilies we visited were so poor they could not afford them without further subsidy from AULIA.Instead of the regular price of Rp 30,000-35,000 for a package, AULIA sold the packages at Rp4,000 – 5,000. Subsidized rice was sold at Rp 1,100 per kilogram, which is well within the reach of 8
  • 9. these people, but the problem was the bad quality of the rice. Mothers were especially concernedabout not being able to provide proper nutrition for their young children.According to Mr. Hidayat of AULIA, the main issue concerning children in the slum area is nothunger, despite other nutritional problems. The main concern is small criminality, due to a structurallack of basic education. Due to the negative effects of the crisis, the educational situation of thechildren in the area has worsened. AULIA estimates that 30 out of 300 children in the communitiesthey work with have dropped out of school. Therefore, Mr. Hidayat believes that food aid is not theright answer to the present crisis. Instead, he stresses the need to provide people with the propereducation; this is seen as the key to survival. When asked if they knew of the existence of food aid, many respondents said that they saw it on TV but had never received any themselves.When asked if they knew of the existence of food aid, many respondents said that they saw it on TVbut had never received any themselves. To conclude our visit, we asked what they wished to conveyto the politicians and to the outside world. Without hesitation, the oldest woman present in the grouputtered the following sentence, “People need to work, otherwise criminals comes up; if we arehungry, we cannot compromise.”Central JavaIn Central Java, the groups that were visited were organic wetland rice farmers, fisherfolk, highlanddry padi farmers, and groups of women in the urban area of Surakarta (in Solo).We were laughed at repeatedly whenever we posed the question “Is there starvation here?” Thefarmers all said that they knew of no one who was hungry, and that alternative foods or staples werealways plentiful. They had never really experienced a shortage of rice, even during the brief droughtof 1997. They said that the real problem was the increased cost of farming the conventional way,and that they’re finding it hard to cope with paying their children’s school fees and transport. Theyalso added that the occasional subsidized rice they received did not make much of a difference inhelping them with their lack of purchasing power, since they were self-sufficient in daily food needs.A lot of cassava, sweet potato and other local roots such as garut were consumed.We visited several farmers who had recently joined Father Utomo’s well-known group that practicesorganic farming for economic, health and sustainability reasons. We were told that all the farmers inthis particular group were glad that they had started organic farming, since the present cost offertilizers and pesticides would not be affordable. In one small village called Mangunsari, inMagelang, Central Java, the farmers practiced intensive fish-rice cultivation and were generally welloff. A measure of this was that 22 houses were built since the start of the economic crisis.The fisherfolk we visited in Rembang on the northern coast of Central Java were enjoying a boom.They exported most of their catch of anchovies, prawns and fish to countries such as Japan, Taiwan,Hong Kong, Thailand and Singapore. The price of the anchovies was between Rp 8,000 – 11,000per kilogram. Prawns could fetch up to 100,000 per kilogram. We were told that there were stories 9
  • 10. of fishermen spending their extra income on gambling and prostitution. Nearby farmers now workfor the fishermen because the farmers can only plant once a year compared to the traditional two orthree times a year. This is because water is scarcer now than in the time of their fathers – possiblybecause of deforestation, much of the original forest filled with teak three decades ago is gone.In the urban area of Surakarta, the women we met were mainly semi-urban. They sold cassava chipsor were involved in small businesses as a means of supplementing their families’ income. When weasked them how the crisis had affected them, they replied that it made them more conscious of theimportance of earning their own income. They were very eager to be involved in income-generatingprojects, and saw this as a way out of the problems of high inflation and poverty.East KalimantanDue to forest fires and drought in most of 1997 and 1998, there was a problem of severe foodshortage in East Kalimantan. An Anglo Australian company Rio Tinto Group (RTG) operating in thearea around Samarinda has been distributing food aid via its foundation (Rio Tinto Foundation) withaid money coming from AUSAID, the New Zealand and Canadian Embassies, and from RTG’s localsubsidiary Kelian Equatorial Mining. However, the Rio Tinto Foundation decided to stop thedistribution of food aid in January 1999, mainly because of positive harvest prospects. A favourablerainy season, which started around April-May 1998, has in fact improved the local situation in termsof agricultural production expectations. However, there is still a lack of purchasing power due to theloss of traditional sources of income. The business of making handicrafts from rotan (rattan) hasnow ceased as a result of the destruction of the forests by fires.When the villagers of Tapulang were asked to compare their situations with that of the people inJakarta, the people present at the meeting recognized that they were better off because they couldrely on different food sources. Furthermore, they said that since the onset of the crisis they had notregistered any cases of starvation or of thievery in the village. This tells us that the traditional optionof relying on other food crops (such as cassava, sweet potatoes etc.) makes the nutritional position ofthe people of East Kalimantan better than those in the rest of Indonesia, who have become reliant onrice as the only staple crop.In relief activities, we noticed that farmers were the only targeted group. Small trades people do notseem to have been impacted too seriously by the current economic crisis. One of the relieforganizations working with farmers is CARE International.CARE implements its relief activities through “food for work” activities. In the areas covered byCARE, an average of 50 kg of rice per month per family was distributed for six months. However,rumors about malfunctions in the distribution system were reported with increasing frequency, andthere were allegations circulating that the actual content of the distribute sacks of rice was rarelyclose to the officially declared 50 kg. Ranging instead between 39 to 50 kg. It was of course notclear where the rest of the rice ended up. CARE was also reported to run special programs forwomen and children’s healthThe group that visited East Kalimantan concluded that there is not enough evidence to support talkof a food emergency situation or a food crisis. 10
  • 11. KupangIn Kupang, we met with NGOs, local and international relief organizations, the Governor of NusaTenggara Timur, and various other government officials. We basically found that the impact of theeconomic crisis here is not significant. There is a rice crisis but not a food crisis, since the staplehere is corn – which have had introduced by Portuguese 700 years ago. However, the governmentdoes not take this into account. It considers a shortage of rice, as a shortage of food. Therefore, therelief plan is based on the need for rice. And hence, rice is distributed.A related issue has been the process of converting traditional eaters of corn and other tubers into riceeaters over the past 20-30 years. This has the effect of changing the diet of an entire population,creating a reliance on rice. The production of this rice is economically expensive and ecologically illsuited to the local climate. The climate is very dry and more suited to crops like tubers and corninstead of the water-hungry lowland padi. Instead, by teaching the population in West Timor – andother parts of Nusa Tenggara Timur – to shift to rice as a staple, the government has made the areadependent on rice imports from other parts of Indonesia and other parts of the world. In light of theeconomic crisis, this dependence is now very costly.Furthermore, farmers are now so dependent on high input practices that they do not know how tocope with planting under stressful, natural conditions: conditions for which their forefathers hadcoping mechanisms. Their traditional coping mechanisms have been torn out of their hands by theagricultural policy of the New Order under Soeharto.East TimorThe chronic food shortage in East Timor is a direct result of the extreme oppression of family andcommunity by the Indonesian army over the last 23 years. The Indonesians Government’s paranoidsuspicions that villagers would be a support base for the East Timorese resistance forces, led them tobar farmers from working their land, lest those farmers find ways of colluding with the resistance.Great tracts of forest were cut and hauled off by the military or other Indonesia parties – partly forprofit, partly to eliminate hiding/meeting places and ambush locations for the various resistanceforces. Families within the between communities were denied the basic human necessity of socialinteraction because of the military’s fear of collusion with the resistance. This has had the effect of23 years of forced neglect of agricultural areas. The result has been the loss of indigenousknowledge on edible, forageable, plant species – if not the loss of some species altogether – and thelack of a general agricultural development process that occurs gradually and progressively throughthe social interactions of the farmers in a community. Instead these people were bottle-fed with high-yielding variety (HYV) packages and novel technologies requiring tremendous financial resourcesfor their maintenance.We saw little evidence of food aid being distributed in East Timor. Some Catholic organizationsoperating in East Timor reported that they had access to small amounts of food aid that they weredistributing in various community food-for-work (FFW) campaigns. However, these activities werenot in line with WFP efforts. CARE was overseeing actual WFP FFW programs with money fromUSAID. They were operating in 12 of 13 districts and had a quota of 50 kilogram per household.CARE’s program ends in June this year.UNICEF in East Timor took on the responsibility of distributing blended food, targeting infants aged8-12 months and mothers. They are acting as a conduit for such food aid, from donors to the 11
  • 12. Department of Health, which then channels the food to local communities through their numerousclinics and other community service sites. UNICEF brings the food aid to district warehouses fortransfer to the Department of Health, but UNICEF has not received any records of distribution.UNICEF is now trying to get Bishop Belo to assist in engaging locally operating NGOs fordistribution. Families within and between communities were denied and basic human necessity of social interaction because of the military’s fear of collusion with the resistance.A discussion with a Catholic polyclinic left us with the impression that there was little food aidreaching the surrounding villages. The clinic itself reportedly received some food aid from thegovernment. However, this little clinic had 600 visitors last month. That far exceeds the verylimited capacity of human and physical resources at the clinic’s disposal. PART 111 MANUFACTURING A CRISISThe idea that Indonesia is suffering a massive food crisis stemmed from a grossly mistaken statisticalprojection based on flawed methodology. But the figures appeared to take on a life of their own,mainly because they served of its political interests of a government that was keen to put food aid inthe service of its political interests. This was undertaken with the acquiescence of foreigngovernments and multilateral organizations that were either in support of the Indonesiangovernment’s aim of urban pacification or saw their interests served by the image of an emergencyin Indonesia.Methodological mistakesEarly in April 1998, the World Food Programme (WFP), in conjunction with the Food andAgriculture Organization of the United Nations (FAO), released a food and crop assessment (SpecialReport) based on statistics provided by the Indonesian agency BULOG. This assessment, whichproved to be critical in triggering the flow of aid to Indonesia, concluded that Indonesia 1998, thetwo agencies revised their estimate to a higher figure of 5.14 million tones. The methodology usedto calculate the import requirements in both Special Reports was used again in the most recentSpecial Report, released 8 April 1999.But the joint assessment projections were contradicted by the FAO’s independent projections.According to A.W. Jalil, the resident representative of the agency, their first assessment in April hada much higher figure of 5.6 million tones, but a second assessment conducted in September revisedimport requirements significantly downward to 3.2 million tones. 12
  • 13. Indeed, Dr. Elmar Mueller, Senior Food Security economist of the FAO based in Bangkok,explained why he thought the calculation of the 5.14 million tones figure in the October 1998 foodaid crop assessment (Special Report) was problematic. He questioned the methodology used, as itinflated the actual rice shortage (for a detailed explanation of the methodology used, please seeAppendix 1: A Critique of FAO/WFP Methodology). But just as serious was the quality ofgovernment statistics (produced by BULOG, the National Logistics Agency), on which the jointWFP-FAO assessment was based. No less than Philip Clarke, the head of the WFP Mission,conjectured that the 5.1 million import requirement, allegedly to ward off hunger, was actuallyneeded for the government to reach the 10-15 per cent rise in production that it had earlier projectedfor 1998.False alarm attracts massive food aidIn any event, the April WFP-FAO figure raised the international alarm about impending starvation,calling for 2 million of the 3.4 million tones to be filled by international aid. Having closed its officein 1995, the WFP had been requested by the Indonesian government to reopen it. It then coordinatedmuch of the relief effort, which went into motion as governments earmarked food assistance toIndonesia.Several countries pledged to provide Indonesia with rice, Malaysia donated 750,000 tonnes of rice,to which it added some sugar and cooking oil as well. Japan supplied 500,000 tonnes or rice in softloans and 100,000 tonnes as a grant. Taiwan promised to sell 200,000 tonnes of rice and China250,000 tonnes, while Vietnam gave 10,000 tonnes as a grant and Thailand added a further 5,000tonnes in grants. The US agreed to grant 12,000 tonnes of rice and sell 300,000 tonnes. TheSingapore government provided S$12 million worth of humanitarian assistance (grant) in rice andmedicines. Furthermore, in January 1999 a grant of US $1.2 million was under negotiation with theItalian Government. It soon became evident, however, that the aid being committed was a channel through which the donor countries also sought to advance their political and economic interests.In addition, the WFP launched a US$ 88 million appeal for emergency aid to help meet the expectedshortages in Indonesia. The fund would be used to purchase 225,000 tonnes of rice and 4.6 tonnes offood packs. This was to directed towards people who could only manage a meal a day, pregnantwomen, nursing mothers, and children under the age of five. Moreover, the WFP aid would befocused on Food for Work Community Development Activities.AUSAID, USAID, the Canadian Government, and a number of EU countries committed other largefood aid loans. The upshot was that Indonesia became the largest recipient of food aid in 1998.It soon became evident, however, that the aid being committed was a channel through which thedonor countries also sought to advance their political and economic interest. In the case of theJapanese government, just an important as the humanitarian mission was the government’s desire todump excess stocks of rice that had become politically problematic.In the July 1998 issue of the International Development Journal, Nagasawa Takaki showed how theprovisions of Japanese food aid was used by the ruling Liberal Democratic Party (LDP) to serve asan outlet for excessive rice stocks in the possession of the Ministry of Agriculture, Forestry and 13
  • 14. Fisheries (MAFF). Owing to two years of good harvest, the MAFF had excess rice stocks of 4million tones. Disposing of these excess stocks, however, faced two barriers:First, part of the excessive stocks included rice imported by the Ministry of Agriculture under GATTAgreements. This rice has been stockpiled due to stagnant domestic demand. But the Japanesefaced strong pressure from the US to import more rice and importing without disposing of the excessrice would merely compound the problem.The second problem was an internal rule that requires Japanese rice to be sold at internationallycompetitive prices (the international price of Thai rice is about 40,000 yen/tonnes while Japaneserice is as high as 300,000 yen/tonnes). To overcome these two barriers, the new mechanism formedwas the category of “emergency food aid” whereby the rice is “loaned”.It was under these conditions of a repayable loan, that the aid was given to Indonesia. According toMiao Touru – Assistant Director, Division of Trade and Logistics Agency, Department ofAgriculture, Japan – the 500,000 tonnes of soft loan rice was repayable in 30 years (with a 10-yeargrace period). The repayment would take the form of rice, rather than cash or other crops. The riceto be repaid could be from Indonesia or other countries, but would have to be a standard acceptablein the international marketplace.However, the Japanese rice-aid proved to be a controversial issue. The Japanese Government sent aninvestigating team to Indonesia in January to look into claim that the rice-aid was being misused.The team found that while some of the rice-aid from Japan had been distributed, substantial amountswere still sitting in various warehouses across Indonesia. This gave rise to cries of corruption and ofcommercially trading rice that had been given in aid. Sources from the Ministry of Agriculture inJapan confirmed that the rice given in aid could not be commercially traded.In the case of Singapore, its rice was specifically earmarked for the military – no doubt part of theisland country’s effort to conciliate Indonesia, whose president had accused it of not having aconstructive attitude towards its neighbors during the financial crisis. As for the United States, itwas aid as a way to dump wheat into Indonesia, thus opening up a previously unexploited market.By the end of the year, however, the expected famine had not materialized – partly because theimpact of El Nino and La Nina on weather conditions had been relatively slight and brief. With therains coming back to drought-affected areas like East Kalimantan, the emergency subsided. “We’reused to Africa, and we didn’t find those conditions of hunger here,” said Clarke. “So we shouldprobably wind up and go back to Africa, where we belong,” he quipped.However, Clarke and his group were not sent back to Africa. Instead, at the request of thegovernment, WFP made a decision to “retarget” food aid to the urban areas and away from the ruralareas. The reason, WFP representatives candidly admitted, was that the financial crisis was throwingpeople out of jobs and into poverty. “Pacification” is what one WFP official called the new policy,one that was dictated by the fact that “Hungry people are angry people.” “We’re used to Africa, and we didn’t find those conditions of hunger here. So we should probably wind up and go back to Africa, where we belong.” 14
  • 15. In fact, as many observers noted, food aid (which by now was flooding into Indonesia) wasmanipulated by the government not only to pacify a restive urban population, but also to consolidateits electoral base.Government opportunismIn response to the economic crisis, the Indonesian government put into action a range of social safetynet programs. These were designed to prevent outbreaks of social problems due to the prolongedeconomic crisis and to safeguard long-term development plans. These emergency programs weredirected at education and health, food security, employment through labor-intensive projects and thestimulation of local economies.We investigated one of the most important programs, which were directly related to governmentefforts to combat food insecurity. Besides President Habibie’s advice to fast in order to save rice, thegovernment set into gear Operasi Pasar Khusus (OPK), using the distribution and logisticalmechanism of Bulog, the National Logistics Agency. This investigation yielded reports ofcorruption, inefficiency and confusion.Bulog still maintains a monopoly over rice imports and has put into action two types of marketoperations. Pure Market Operation (Operasi Pasar Murni-OPM) – a policy to sell rice at a “normal”rice price (HPB – harga penjualan bera) throughout the period of the economic crisis. SpecialMarket Operation (Operasi Pasar Khusu – OPK) – on the other hand, is a policy to sell rice at belowthe normal price, better known by recipients as “cheap rice” (beras murah). This second policy iswidely implemented.The OPK program distributes medium quality, unpackaged rice, at the special subsidized price ofapproximately Rp 1000 per kg. The OPK relies on household-level data collected by the NationalFamily Planning Agency (BKKBN) to identify qualifying households. The targeted participantswere then given vouchers identifying them as OPK beneficiaries. Only households with voucherswere able to buy the subsidized rice. Each family household was entitled to a 10-20 kg. rice vouchereach month. In short, both in Jakarta and in the outer islands, food distribution had become a veritable mess.A monitoring report by YLKI (Yayasan Lembaga Konsumen Indonesia) on OPK activities inJakarta, Central Java, Nusa Tenggara Barat, Sulawesi Utara and Kalimantan Barat, found that aproblematic distribution system resulted in on-delivery or delayed delivery of the subsidized rice.Some rice was also sold by those who are supposed to deliver the rice to its target, making theprocess expensive and causing delays. Most importantly, this jacks up the price of rice to Rp 1050or 1100 per kilogram. The other problem was that to receive the subsidy, families were required tobuy 10 kg or 20 kg bags of rice. Most did not have enough cash to purchase such large amounts ofrice. Village leaders who were left with the task of handing out the rice sometimes took the decisionto sell smaller portions to poorer families.In samarinda and Balikpapan, East Kalimantan, our team found that Dolog (the local chapter ofBulog) was selling subsidized rice at Rp 2,000 – 2,500 per kilogram. This price was still to and ahalf to three times the pre-crisis price of Rp 800 per kilogram. We were also told by PLASMA 15
  • 16. (Institute for Environment and People Empowerment) that the official reason given by theDepartment of Social Affairs for this price disparity was the high cost of transportation associatedwith the distribution of subsidized rice in remote areas. There was a portion of World Bank aid, Rp200, allocated for the transportation of each kilogram of rice but this was not sufficient. Thus thepeople in remote areas had to travel quite a distance to sub-district centers to collect the subsidizedrice.Through our interviews with some Central Java farmers, we found that the subsidized rice had notmade much of a difference, since they only received it once a month – ad so far just 6 –7 times. It isuncertain for how long the subsidized rice will be available, some were told only until the elections.The other major form of food distribution carried out by the government – though most of it is donethrough the private sector or NGOs – is the distribution of Sembako (Sembilan, Bahan Pokok –ninemajor staple foods) which are packages of rice, cooking oil, noodles, salted fish and sugar cane.Some packages are provided free of charge, but others are provided at a subsidized price.In our interview, we found in Jakarta and in Kupang, a capital of Nusa Tenggara Timur, that as manyas five packages can be offered free to the same family. There is little coordinator in the distributionof the food aid that has been rushing into Indonesia. Furthermore, the quality of rice given is verypoor. Some families were reported to be feeding their pigs with the Sembako rice they werereceiving. Others have said that they were selling their Sembako packages since they were receivingmultiple packages. In short, both in Jakarta and in the outer island, food distribution had become averitable mess. In contrast, in Kupang our team found that a crystal rice variety of the Japanese aidwas selling in several markets at Rp 4,000 – 4,500 per kilogram. PART IV CRISIS OF A DEVELOPMENT MODELIf there is a crisis in Indonesia, it is not so much an emergency food crisis but a generalized crisis ofdevelopment.This crisis has two dimensions, a short-term dimension and a long-term one. Viewed in the shortterm, this crisis may be said to be the result of the massive flight of foreign capital from Indonesiaand the rest of Southeast Asia, following the floating of the Thai bath on July 2, 1997. From thisperspective, the herd behavior of speculative investors was clearly a key – if not the key – reason forthe quick collapse of the Indonesian economy. Even Stanley Fischer, the deputy managing directorof the International Monetary Fund (IMF), conceded this at the time of the World Bank –IMF annualmeeting in September 1997 when he said: “Markets are not always right. Sometime inflows areexcessive, and sometimes they may be sustained too long. Markets tend to react fast, sometimesexcessively,” 16
  • 17. But the Indonesian collapse was an event waiting to happen. For it could only happen to aneconomy that had, over the years, implemented a model of development that made it very vulnerableto the massive exit of foreign capital. This exit was triggered by the collapse of foreign investorconfidence, owing to the policies of capital account and financial sector liberalization that theIndonesian Government had implemented.Elements of the dominant paradigmFinancial liberalization, which integrated Indonesia indiscriminately into world capital markets, wasa central element of this model of development. It stemmed from the fundamental assumption thatforeign capital was the strategic variable in development. But there were other, related features ofthis model. The most significant were the following.• The strategy can be described as “development from above,” one pushed by an alliance between the military elite and its technocratic partners in order to gain legitimacy for the ruling regime by delivering economic growth.• The model place priority on industrialization, in the first phase through import substitution, but since the early eighties through industrialization geared and export markets.• The World Bank supported this development strategy with massive amounts of funding for infrastructure projects and agricultural projects that were meant to support this “industry-first” strategy.• Agricultural development was reoriented to serve industrial development in this model, so that not only were policy decision taken which disadvantaged it, but its main function was to achieve higher rates of production and productivity in order to feed the burgeoning urban work force. In short, the “Green Revolution” was part and parcel of the industry-first strategy.How agriculture was disadvantagedIn a talk with the Investigating Mission on January 25, Professor Bungaran Saragih of the InstitutePertanian Bogor provided a succinct summary of key elements of the industry-first strategy and theirimpact on Indonesian agriculture.• The exchange rate was placed at an artificially high level at certain periods. This policy hindered the export of agricultural products at the same time that it promoted industry by keeping the prices of imported industrial raw materials and components low;• The high-interest rate policy – designed to attract foreign capital – drew resources from agriculture to industry because agricultural projects took a long time to yield a decent rate of return, whereas urban investments, like investment in real estate, yielded high profits with a quick turnaround time;• A policy of providing cheap food was clearly designed to subsidize industry by keeping the price of wage goods low for the urban working class. However, this decreased the profitability of agriculture, leading to a decline in investment, leading to decreased productivity.• The low profitability of agriculture led to the withdrawal of wide tracts of land from cultivation and their being devoted to alternative, more profitable uses, such as real estate speculation.Yesterday’s Green Revolution and today’s food crisis 17
  • 18. A major concern of the Soeharto government was achieving food self-sufficiency, even as thecountry was engaged in rapid industrialization. What this meant in practice was the application ofGreen Revolution technology, sparking off a process that would increase agricultural productivity,release people from agriculture to serve as the work force for industry, and bring down the price offood to subsidize industry. Central to this strategy was the backing of the World Bank, whichpractically bank rolled the whole effort.In the early eighties, the strategy appeared to be a success, with Indonesia achieving self-sufficiencyin rice by 1984, and achievement that won Soeharto a gold medal from the FAO. Later, however,several problems with this approach became evident, problems which are at the root of Indonesia’sreal agricultural crisis. Many experts and farmers interviewed placed the emphasis on several ofthese, the most critical being the dependence on fertilizers and pesticides and the focus on rice self-sufficiency (as opposed to food self-sufficiency).The account that the mission heard from farmers is very different from the rosy picture that ispainted of the Green Revolution years. They reported how ABRI, the Indonesian army, forcefullyimplemented this green revolution technology. In many interviews, farmers recalled how they wouldpull out the local varieties they traditionally planted, for fear of negative repercussions from ABRI.Thirty years of Green Revolution has left many farmers dependent on expensive external inputs ofseeds, fertilizers and pesticides. The tragic results of this dependency became stark with the onset ofthe financial crisis in late 1997. With imports limited –owing to lack of dollars and cuts in subsidiesfor fertilizers since December 1, 1998 (under the policies dictated by the IMF) agriculturalproduction faced severe threats. Indeed, many respondents said that even before the crisis the priceof fertilizers had gone beyond the reach of many farmers. This has forced some farmers to return totraditional methods of agriculture. They are also returning to the local varieties of seeds andrecognizing the loss of bio-diversity caused by the monoculture practice of the Green Revolution.One group of mission members met with HPS (Hari Petani Sedunia), an organization that helpsCentral Java farmers obtain local Javenese rice varieties from other islands such as Sulawesi andSumatra, and teaches them how to farm organically. This situation is ironic given that this is acenturies old tradition for most of these farmers. When we questioned farmers on their return toorganic rice farming, their reasons were based on lower costs, health, the sustainability of the land,and the environment. Most of the farmers told us that they already had orders placed on theirripening rice still sanding in the fields.Part of the grand plan of rice self-sufficiency via the Green Revolution was the conversion of asmany people as possible into rice eaters. Providing cheap subsidized rice in local markets assistedthis transformation. But Indonesian agriculture before the Green Revolution was diverse: In upland,hilly areas, and in dry, outer lying islands, cassava, sago, corn and other local roots were thetraditional staple crops. Depending on the area, rice was either eaten or not eaten together with thesestaple crops. The advent of the Green Revolution in these areas actually meant the introduction of asystem that was not only unsuitable but also expensive – being dependent on the construction ofirrigation systems – and insensitive to local preferences for staple food. The Green Revolution hasresulted in many dry area communities, such as the islands of Nusa Tenggara Barat and NusaTenggara Timur, becoming dependent on wetland rice, which is grown through economically andenvironmentally unsustainable practices. 18
  • 19. The encouragement of wetland rice production and consumption coincided with the “cheap ricepolicy.” The rationale behind the latter was that if rice were kept inexpensive, people would be ableto afford it, thus ensuring political stability. But there was a contradiction between the two policies,since low farmgate prices were not an incentive to productivity. In many instances, this resulted inthe smuggling of large quantities of rice abroad, owing to the huge disparity between the prices ofrice in the domestic and international markets, or in hoarding for speculative purposes.Another consequence of the cultivation of a dietary dependence on rice is that it distorted the pictureof food security. If large numbers of people relied on root crops for staples in key regions, then acalculation based on the need for rice as the staple completely distorted the true picture of foodsecurity in the country. This issue of defining food security as rice sufficiency – and its connectionto the cultivation of dependency on rice – are critical factors that were not taken into consideration inthe declaration of a food crisis in Indonesia.The Green Revolution not only impacted on food security, it also impacted on wealth disparity.Many micro studies have concluded that it primarily benefited the wealthy and more powerfulsegment of the populance, despite the general increase in rice production over the last 30 years. TheGreen Revolution lead to the polarization of resources within and between different social strata andaccentuated the division of labour, further marginalizing the role of women in the community.Moreover, many smallhold farmers had to borrow from moneylenders in order to purchase thepackaged seed and fertilizers, which were central to the Government’s agricultural strategy. Thisoften led to poorer farmers losing their land when they were unable to repay the debt. The GreenRevolution also created new forms of poverty by closing off certain economic opportunities.Traditionally, small or landless farmers would harvest the rice fields of larger farm owners, and bepaid in kind. However, with the introduction of high yielding rice varieties, to maximize yields andincome, large farmers preferred to contract a team of harvesters who were paid in cash rather than inkind. Most of the members of the team of harvesters were influential individuals in the village.Thus, small farmers and landless laborers had permanently lost a traditional source of income.In another move to maximize yields and income, large farmers also introduced the use of largesickles to decrease the number of harvesters in the filed. The move displaced the traditional use ofthe ani-ani (small knife) or harvesting by older women who were usually the poorer householdmembers. The result is the deprivation of income for older women in rural areas. Ngasak, thegleaning of the paid left in the fields when the ani-ani was used, is another source of income for therural poor, which as disappeared in the era of the Green Revolution.Bulog’s role in the food crisisThe transformation of agricultural technology via the Green Revolution has been one key source ofIndonesia’s agricultural crisis. Another is the impact on national life of the formidable Bulog, theNational Logistics Agency. First established in 1967, Bulog was formed to procure rice for theArmed Forces and civil servants. It was only later that it grained monopoly over other goods such asflour, sugar, soybean, onions, garlic and cooking oil, and the role of stabilizing prices and ensuringfood prices do not negatively affect the inflation rate. In line with this role, KUD, the cooperativevillage unit, would purchase rice from farmers and sell it to Bulog. Bulog was to release its stockinto the market in times of scarcity to prevent sharp price increases, and during time of harvest.Bulog would buy from the farmers to prevent a drop in prices. A ceiling price was also placed onbasic agricultural commodities such as rice, sugar, soybean, cooking oil and flour to protectconsumers. 19
  • 20. In reality though, Bulog is seen as part of the problem of poverty in agriculture. As a result of theunlimited powers of Bulog in the mentioned commodities, prices of goods are pushed up artificially.Monopoly, or import restriction on other parties over certain agricultural commodities, providesfertile ground for corruption and collusion. Bulog has also been criticized for inefficiency and non-transparent practices in distribution the commodities it has monopoly over. It is hoped that theabolition of Bulog’s import monopolies for all the above-mentioned commodities – with theexception of rice (the latest IMF conditionality) – will expose domestic producers to importcompetition thereby forcing them to be more efficient. This however may be an impossible hopeunless rice can go directly to the consumers from the producers.In an article in the Jakarta Post on August 31, 1998, it was reported that H.S. Dillion, the ExecutiveDirector of the Center of Agriculture Policy Studies, suggested that since Bulog is still mandated tostabilize rice prices, it should streamline the intricate distribution network. Bulog should bypass thecurrent distribution system since it causes a vast disparity between the official price and the marketprice. In addition, Bulog’s market operations must ensure that rice goes directly to consumerswithout allowing speculators to buy subsidized rice and retail it at a higher price. Rice distributionshould be very simples: farmers sell their rice to cooperatives or distributors who sell it toconsumers.Drillion was underlining the reality that the current distribution system is very protracted, Farmerssell rice to small traders who resell it to larger traders. The larger traders sell the rice to mediumscale distributors, who then resell it to small traders. The larger traders sell the rice to medium scaledistributors, who then resell it to small-scale distributors, retailers and supermarkets, before the ricefinally reaches the consumer. There are too many players in the rice distribution system, causinglarge profit margins to be concentrated in the hands of the various players of this complexdistribution chain. The result is soaring prices for consumers. The farmers do not see a single centof these profits. What Indonesia faces is not a short-term emergency food crisis, but the unraveling of a decades-long model of development.At the local level, even the function of Bulog is ridden with problems. The purchase of rice byDolog, the village chapter of Bulog, was originally intended as a means of price support for farmers.However, farmers usually sell their harvest to middlemen (millers and loan sharks), because veryoften the price offered by Dolog is lower. Even when the price offered by Dolog was reasonable,vague quality requirements prevent farmers from qualifying to sell to Dolog. Dolog requires thatwater content in rice gains should not exceed 14 per cent. However, climatic abnormality, such asheavy rains and a lack of sunlight to dry rice grains, would usually result in water contents higherthan 14 per cent. Traditional methods of post-harvest processing have also been blamed for the highwater content.Farmers usually consider this water content requirement as too demanding. Besides this, middlemenusually approach the farmers whereas farmers would have to approach Dolog if they want to selltheir rice. Therefore, farmers usually prefer to sell to middlemen because such a network is seen asboth more flexible and profitable. 20
  • 21. A new era for Indonesian agricultureUnder the new IMF agreement, Indonesia is supposedly in a new era of economic restructuring forthe better economic health of the country. But there is increasing evidence that the cure is worsethan the disease.In the area of distribution Bulog has been stripped of monopoly rights over the distribution of keycommodities. This has resulted, in many areas, in rich and powerful traders stepping into the agency’s role,achieving either monopolistic or oligopolistic control over distribution. What Indonesia needs at this point is not food aid, but a fundamental reorientation of agricultural strategy and overall model of development.One also wonders how production can be sustained when the majority of the poor farmers have hadtheir access to cheap fertilizer cut. The government abolished all subsidies for fertilizers inDecember 1998, raising the price of urea by about 150 per cent. In place of this cut, more credit ismade available as compensation. However, to obtain credit, one must possess collateral and pay 16per cent interest. Most of the small farmers do not have collateral nor can they afford 16 per centinterest because they simply do no earn that much.Previously, there were dual pricing systems for the subsidized fertilizer, one for large plantations(higher priced) and one for farmers (lower priced). But subsidized fertilizer flowed upstream topower holders – the plantation owners. So what would be different now with the new offer of accessto credit? Many observers say that the channeling of such credits to KUD village co-operation unit)will simply reinforce the pre-existing patterns of genteel elitist corruption.In other words, the farmers are trapped in a model of development that is in crisis. In the last severaldecades, the Indonesian government transformed Indonesia agriculture – with active encouragementfrom the world’s multilateral institutions – converting most farmers, either fully or partially,dependents on intensive external inputs. Farmers were told that this was good and they believed it.So they planted the new way. They accepted the low farmgate prices and the expensive inputs.After years of obediently following the government’s directive, the farmers are repaid with furtherdebt when the fertilizer subsidy is abolished.In short, what Indonesia faces is not a short-term emergency food crisis, but the unraveling of adecades-long model of development – one of the components of which was the Green Revolution.What Indonesia needs at this point is not food aid, but a fundamental reorientation of agriculturalstrategy and overall model of development. As Mission Member Dr. A.Z.M. Obaidullah Khan –former Assistant Director General, FAO Regional Representative for Asia and the The Pacific – putit, “What is at risk . . .is the dominant paradigm of linear economic growth which must yield to anequitable allocation of property and resources including knowledge and information for the freedomto live long and well for substantial parts of the Indonesian populace. 21
  • 22. PART V CONCLUSION AND RECOMMENDATIONSThe conclusion of this mission is that a food emergency definitely does not exist in Indonesia.Indonesia is nowhere near the situation that has gripped many African countries.The threat of prolonged drought posed late in 1997 passed very quickly. Food production hasrecovered in many areas that were initially affected. Indeed, agricultural production in many parts ofthe archipelago, especially of selected export commodities, has risen over the last year.Yet, the October FAO/WFP Special Report – which continues to call for food aid to make up for“projected” shortfalls in demand – perpetuates the massive miscalculation on Indonesia’s foodsecurity situation that was made in early 1998. Food aid continues to flow into Indonesia, but this isno longer to meet an objective situation of starvation or threatened starvation, but to serve theinterests of the Indonesian Government and the powers behind various aid agencies. World FoodProgram officials admit food aid is being specifically re-targeted to urban areas in order to pacifypeople who have lost their jobs as a result of the economic crisis. “Hungry people are angry people,”goes the memorable phrase of one WFP consultant.With control over much of the food aid distribution, the Indonesian government is also in a positionto influence the results of the elections in June.To say that a crisis of starvation does not threaten Indonesia does not mean that its agriculture is notin crisis. There is a profound crisis of agriculture in Indonesia. However, this is a crisis that isconnected to Indonesia’s industry-first strategy, the crisis of the Green Revolution and theconjunctural crisis of financial collapse and IMF-sponsored economic restructuring.What Indonesia needs urgently is not food aid but an end to the IMF restructuring program that hasbrought tremendous difficulties for many farmers, by cutting off the fertilizer subsidy. One cannotdo this without first putting in place an alternative production strategy.What Indonesia needs in the short term is not food aid but an economic recovery program that isexpansionary, that brings down interest rates, cleans up the banking system, and puts people to work.People need jobs, not food aid.In the longer term, Indonesia needs to undertake two major reforms:First, a fundamental reorientation of its agricultural technology away from the rice-intensive GreenRevolution technology that has reduced diet diversity and biodiversity and lead to greater movetowards diet diversity with less chemical intensity and less dependence on a few varieties of seeds.Second, the industry-first strategy should be abandoned in favor of a more balanced developmentparadigm that will make investment in agriculture attractive once more and, even more importantly,make agriculture an occupation of which its practitioners can be proud. Changing attitudes is acentral part of the solution to Indonesia’s agricultural crisis. 22
  • 23. Our final set of recommendations has to do with food aid. We strongly urge that:I. The projection of Indonesia as a country facing starvation must be stopped immediately.II. Food aid to Indonesia should be reduced and redirected to truly starving countries – of which there are many – such as North Korea.III. The use of food aid for urban pacification and electoral purposes must be halted immediately.IV. Food aid already in the country must be limited to two groups of people; women who are pregnant or nursing babies and children living below the poverty line.Bangkok, 4 May 1999.Walden Bello and Li Keng Poh,with minor corrections by Riza V. Tjahjadi(See: correction & suggestion from Country Rep WFP Indonesia Office; later pages) APPENDIX Appendix 1 A Critique of FAO / WFP MethodologyIn an interview with Dr. Elmar Mueller, Senior Food Security Economist of the FAO Asia Pacific, he explained why he believes thegeneration of the 5.14 million tones figure in the October food and crop assessment (Special Report) is problematic. The Special Report isavailable on the web site of an FAO project called GIEWS (Global Information Early Warning System); and the figures below areobtained from the report itself.TABLE 1. 1: RICE BUDGET NUMBERS FROM THE OCTOBER FOOD AND CROP ASSESSMENT(Special Report) Milled Rice (1000 tonnes) Reference #1. Domestic Availability 32,245 1 Opening Stocks 3,563 2 Production 28,682 32. Total Utilization 37,390 4 Consumption 28,787 5 Other Uses/Losses 4,303 6 Closing Stocks 4,3000 7 Exportable Surplus 0 83. Import Requirements 5,145 9Opening stocks is defined as available stockpiles, and production is defined as rice yield expected over the1998 harvest. The total of opening stocks and productions considered domestic availability. Total utilizationis the sum of consumption, other uses/losses, closing stocks and exportable surplus. Therefore, the importrequirement equals the domestic availability minus the total utilization, giving us a deficit of 5.14 million 23
  • 24. tones. This is how the need for 5.14 million tones of rice was arrived at. However, rearranging these figures,we readily see a curious measure of the actual shortage:TABLE 1.2: rearrangement of table 1.1. FOR CLARITY Item Tonnes of Ref Remarks Rice #Opening Stocks 3,563 2 Available stockpilesProduction 28,682 3 Rice Yield expected over the 1998 harvestDomestic Availability 32,245 1 Amount of rice available to feed people and animalsConsumption (28,787) 5 Consumption by peopleOther Uses/Losses (4,303) 6 Animal feed and processing lossesnet reserve (shortage) (845) 10 This is what Indonesia REALLY lacks in riceThe import requirements (reference #9 in Table 1.1) should be only 845,000 tonnes (Figure #10 in Table 1.2)since only consumption and other uses/losses should be subtracted from domestic availability. In the OctoberSpecial Report, closing stocks which are government stockpiles (in store reserves), have been included as partof the total utilization. The pre-crisis reserves as estimates at 3.563 million tones (reference #2), but the FAO,in its October Special Report has taken the move of strengthening the figures upwards to 4.3 million tones (theamount of the government’s desired closing stocks?). So, this raises a crucial question: Why was this categoryof “closing stocks” strengthened from the opening stock (#2) to a more desirable 4.303 million tones (#6) andthen ultimately included in the count for import requirements? Appendix II: FIELD REPORT ON EAST TIMOR 28 JAN – 4 FEB, 1999 By John-David ComtoisFood Security in East Timor; A Matter of Freedom From OppressionThe initial words spoken by our first interviewee were repeated by others throughout our stay in East Timor:The political situation directly affects food security. One simply could not discuss food production withoutdiscussing the presence of the military, and the effects of such presence has on the villagers’ ability to produceadequate food. The violence and oppression communicated to us over the course of each interview drew apicture of the systematic and sustained destruction of East Timorese self-reliance. In East Timor, food securityis an issue of re-building an agricultural production system that over the course of the last two decades hasbeen murdered, raped, burned, tortured, disenfranchised, divided, exiled, neglected and otherwise kept fromtaking root.For the East Timorese who reside in the Northern areas of the Island, poor rainfalls over the past years havedestroyed the farmers’ already small stock of seed, and reduced families to eating far less than is nutritionallyadequate. However, villagers and other working with and among the villagers, say the drought only made anaturally poor situation worse. Coping with all of the oppressive taunts and attacks of the Indonesian militaryhas hardened them for a life filled with disease, hunger and death. When we visited one family, who in myopinion was one of the poorest families. I have seen in my 4 years in Southeast Asia, and asked how they 24
  • 25. were, they immediately answered ‘Oh, doing alright’. The human spirit protects its own. But who protectsthe human spirit? One simply could not discuss food production without discussing the presence of the military, and the effects of such presence has on the villagers’ ability to produce adequate food.Destroy the Land, Destroy the PeopleI was given a set of photos picturing the tortures and murders of villagers near Suai in the Kovalima districtapproximately 90 km. Southeast of Dili. In these photos two men and one woman lay dead in a cornfield.They are burned, shot through the knees, stabbed in their sides and their throats have been slit. A Woman – itremains unclear whether it is the woman in the picture or a victim at another site – who was pregnant at thetime, had her fetus cut out of her and discarded away from the murder site. Whether she or any of the othervictims were alive to witness this macabre expression, this purposeless act, we will probably never know.In the immediate vicinity of this atrocity, the cornstalks are beaten to the ground. The surroundings stalks,seemingly standing vigil, would surely be speechless were they not voiceless. It is a picture that captures thefall of agriculture with the fall of the people.This type of scene has been the controller of the people since Indonesia’s violent Annexation of East Timor. Itis the Bogeyman that keeps people in their homes or constantly in flight. It is this kind of fear that disruptslife. It is this kind of fear that has cut asunder the social and psychological benefits of their once daily routineof agriculture. The 800,000 people of East Timor are not only refugees from the military’s physicallyoppressive actions; they are victims of livelihood deprivation. Social psychologist M. Jahoda had this to sayon the effects of being denied the daily activities of work: “There are latent consequences of employment as a social institution, which meet human needs of an enduring kind. First of all is the fact that employment imposes a time structure on the working day. Secondly, employment implies regularly shared experiences and contacts with people outside the family. Thirdly, employment links an individual to goals and purposes which transcend his own. Fourthly, employment defines aspects of status and identity. Finally, employment enforces activity.”This provides tremendous insight into why many people in Southeast Asia put themselves into the situation ofworking in the huge metropolitan centres, even if the conditions are horrible in the extreme. For the EastTimorese who lost not only their livelihood but also the basis of their culture, Dr. Jahoda’s reflection on thematter certainly helps the observer appreciate just what it takes to see oneself through the oppression of amilitary occupation. The East Timorese people have been psychologically oppressed through, among otherhorrific actions, the systematic denial of access to agriculture; which means the denial of access to theirlivelihood and culture. The end result of 23 years of forced neglect of agricultural areas has been the loss of indigenous knowledge on edible plant species – if not the loss of some species altogether. 25
  • 26. Destruction of the Agricultural SystemFor the East Timorese, the last 23 years has been a period of fight and flight. The military-largely theIndonesian military – has been identified as the culprit for extreme oppression of family and community.Indonesia’s paranoia of villagers interacting with the East Timorese resistance forces led them to bar farmersfrom working their land, lest those farmers find ways of colluding with the resistance. Great tracts of forestwere cut and hauled off by the military or other Indonesian parties – partly for profit, partly to eliminatehiding/meeting places and to eliminate ambush locations for the various resistance forces. Families within andbetween communities were denied the basic human necessity of social interaction because of the military’s fearof collusion with the resistance.This has had the effect of 23 years of forced neglect of agricultural areas. The result has been the loss ofindigenous knowledge on edible, forageable, plant species – if not the loss of some species altogether – and thelack of a general agricultural development process that occurs gradually and progressively through the socialinteractions of the farmers in a community. Instead these people were bottle-fed with high-yield variety(HYVs) crop packages and novel technologies requiring tremendous financial resources for their maintenance.This was conducted under the Indonesian government’s Repelitas (5-year development plans) that embracedthe Green Revolution paradigm. Unfortunately, those high yield varieties demand a great deal of water, cannot withstand much competition for nutrients from weeds and other plants, and are more susceptible to insectand disease attacks because they lack the fine tuning to the local {micro-}habitat that the indigenous varietiesheld for the East Timorese.What the farmer now has in an imbalance of HYVs, the disappearance of the forest (a source of foraging), thereduction of local varieties, a vastly changed and thereby unpredictable local meteorology, a bad and costlydependence on herbicides and insecticides and an altered consumption pattern of water that exceeds theregion’s supply.The Forced Abandonment of Agricultural LandHuge areas of reasonably arable land have been overtaken with densely growing woody weeds 6-7 feet inheight. This is a result of the years of forced neglect. To clear these weeds now is apparently a nearimpossibility without the use of mechanical aid or huge amounts of able-bodied labour. Even if these weedscould be cleared to allow expansion of local agriculture, the resulting massive weed biomass would present thesmallhold farmer with new problems.The loss of huge swatches of forest cover has resulted in dry, very hard soils. To expand agriculture into theseareas – if by odd chance they have not been consumed by the woody weeds-would require great amounts ofvery able-bodied labour or tractors to be able to prepare a seedbed in time for the rains.Much of Northern East Timor is barren land. Only a thin veneer of soil covered the stony subsoil – if subsoil ispresent at all – that pervades most of the rolling hills and steeply sloping landscape that typifies the Northernflank of the island. It is useful only for grazing and only barely at that.As we witnessed in an area of Eastern East Timor, farmers are either too scared or are simply denied the rightto expand their agricultural area beyond their small family garden. The soil is a very heavy clay soil butpromises seemingly high yields. Manually working the soil would require a healthy and strong family. Anearby lake has water 12 months a year. In fact it has so much available water that it is a target for ahydroelectric generating station. Yet the people of East Timor have been denied access to this source ofpotential food production.In one particular region, reasonably large areas of land are being farmed, but production suffers from poorquality soils and lack of water. Expansion is also hindered by the aforementioned weed infestation. Under the 26
  • 27. Portuguese there was approximately 80,000 hectares (ha) of rice planted. Now, although the IndonesianGovernment still claims approximately 80,000 ha of rice has been planted, the reality sits somewhere betweentwenty to thirty thousand hectares with the demand (before the droughts) being satiated with rice from otherparts of Indonesia.Corn farmers (the highlanders) have fled to both the lowlands and the coastal areas, taking refuge in ‘safeareas’ or taking up labour in the cities. Rice farmers (the lowlanders) have followed suit. So in the lowlandswe have corn farmers now competing with rice farmers for land and other very sparse resources or cornfarmers simply taking up planting rice. We also have some corn and rice farmers trying to eke out a living byfishing, although they generally lack the tools and skills to make a successful go of it. Finally, and worst of all,we have a great many people who were once producers who are now consumers. This latter double barrel gunboth reduces net yield while simultaneously increasing net demand.Labour is largely unavailable. Malnutrition, the prevalence of malaria and tuberculosis, as well as the flight ormurder of pockets of local populations has greatly reduced the family labour pool. The division ofcommunities that once helped one another has further reduced the general labour availability at the communitylevel. Draft animals – buffaloes – have been killed in an outright tactical strategy or have been taken for foodby the military or paramilitary on either side of the conflict. Tasks that were once left to the buffalo, now oftenfall on what remains of the family labour pool.Finally, there was a seemingly defeatist attitude, at least in the Baucau area villages, as regards the weedproblem (not just the inundation of those dense woody weeds generally at large but even the far less imposinggrassy and broadleaf weeds amongst the crops.) There was a noticeable lack of attention paid to controllingthem by hand. This can readily be ascribed to the years of dependence on insecticides and herbicides, whichhas left the farmers seemingly unable to recognize the potential in their own hands to control farm pests. Theinability to purchase herbicides, owing to the inflation created by the economic crisis, and the reduced yieldsresulting from consecutive years of drought has seemingly left them thinking there is no alternative but toendure. Such an attitude can also be justifiably ascribed to the military’s incessant agricultural offensiveleaving the farming population feeling resistance – be it to oppression or to pests in the filed – is futile.Food Aid in Timor Timur We saw very little evidence of food aid being distributed in East Timor. Some Catholic organizations operating in East Timor reported that they had access to small amounts of food aid, which they were distributing, in various community food-for-work (FFW) campaigns, but not in line with WFP efforts. CARE was overseeing actual WFP FFW programs with money from USAID. They were operating in 12 of 13 districts and had a quota of 50kg/household. CARE’s program ends in June this year.In East Timor, UNICEF took on the responsibility of distributing blended food for infants aged 8 –12 monthsand mothers. They are acting as a conduit for this food aid from donor to the Department of Health which canchannel the food to local communities through their numerous clinics and other community service sites,UNICEF brings the food aid to district warehouses for transfer to the Department of Health, but UNICEF hasnot received any records of distribution, Yayasan HAK, a Human Rights Abuses center in Dili has reportedthat there has been infant food stolen for sale and profit by government officials. UNICEF is now trying to getBishop Belo to assist in engaging locally operated NGOs for distribution.A discussion with a Catholic polyclinic left us with the impression that there was little food aid reaching thesurrounding villages. The clinic itself reportedly received some food aid from the government. This littleclinic, however, had 600 visitors last month. That far exceeds the very limited capacity of human and physicalresources at the clinic’s disposal. The clinic is just about the last resort for the desperately ill (governmenthospitals being the last). The people believe that to go to a hospital is to recognize your imminent end. Thosewho feel they still have hope seek help from traditional sources (usually healers or midwives, etc.) or rest at 27
  • 28. home trying to convalesce. In recent times patients at the clinic have included a 30-year-old woman weighinga mere 29 kgs. and three children who at three years of age weighed just 3.5 kgs. These are some of the worstcases, but just how many more are not coming to the clinic because it is up to two hours away? How many are‘convalescing’ at home? This puts the ill, the pregnant or recently post-natal women and very young at adistinct nutritional disadvantage,Closing NotesIn a subsequent talk back in Jakarta with a World Bank representative, I was told that Indonesian rice farmers(East Timorese included) were much better off this year because rice prices were up 300 per cent. I tried to askhim if this 300 per cent made any kind of difference when there was already such a shortage of rice thatnothing remained to be sold – 300 per cent increase of zero sales was still zero. It did not compute with him. Iasked him if he had any idea how many farmers this increase would benefit. He just kept repeating that the ricefarmer’s produce was 300 per cent more valuable and that this could only leave the farmer better off. TheWorld Bank has no grasp of the issues at work in East Timorese food security, or worse, they have chosen toignore the factors and continue to support the destruction of the East Timorese. Either way, the World Bank isyet again a persistent part of the problem.We were lucky to be there in the rainy season when everything was green and lush. The farmers were luckythere as a rainy season at all –even though many were caught unprepared at the earlier than usualcommencement of the rain. Over the last few years there has been only enough rain to make the farmers thinkthe rains had come for good. They planted their seedstock only to have the rains disappear and their seedstockforfeited to dried out soil. This little game played itself out three times last season! The amount of greeneryand the pleasant weather experienced on this mission could easily have left the visitor with the impression thatall is looking well. But for the greater part of East Timor there is only one brief growing season – from lateNovember to early March. Outside of that we were told it becomes desert – tremendously hot and dry and thewhole vista turns to brown and black.There is a food problem in East Timor. There is no doubt about that, or can there be any argument to thecontrary. Whatever food aid did ultimately reach the needy was not enough. The acuteness of the foodshortage is drought related. The chronic shortage has its roots in the political situation. East Timorese neednot face chronic food shortages.The focus of any lasting solution must be the production system at the family and community levels. It willhave to consider the real productivity to shallow, stony soils in the north and rich volcanic soils in the south. Itwill have to consider improved internal distribution systems for the produce. It will have to consider themalnourished, weakened state of East Timor’s agricultural human resources. It will have to consider TheHave’s versus The Have Not’s – If it becomes a case of pro-integration VS pro-independence East Timoresethen the chronic food shortage may never be overcome through an improved internal production system. EastTimor would then be largely dependent on buying Indonesia’s agricultural production … coincidentally,Indonesia recently said it would be ‘happy’ helping East Timor gain access to the trade-focused ASEANgrouping…Indonesian farmers would be happy indeed to have the East Timorese market in their back pocket!---The team members were Dr. A.Z.M. Obaidullah Khan, the former Assistant Representative for Asia and thePacific; Daycha Siripatra of Technology for Rural and Ecological Enrichment-TREE, Thailand, John-DavidComtois of Rural Reconstruction Alumni and Friends Association (RRAFA), Thailand; and Riza V. Tjahjadiof PAN Indonesia, Indonesia. 28
  • 29. Appendix III: FIELD REPORT ON EAST KALIMANTAN 28 JAN – 4 FEB, 1999 By Marco MezzeraIntroductionThis report presents the main findings from a mission investigating the food security situation in an area of East Kalimantan.The mission was organized by the Southeast Asian Council for Food Security and Fair Trade and took placebetween the 29th of January and the 4th of February. The team members were Indra Tata Purwita of WalhiIndonesia; Marco Mezzera of Focus on the Global South, Thailand; and Simon Karunagaram of ERAConsumer, Malaysia.The field visits and interviews took place in an area of the Kutai district, which was selected with the help oflocal NGOs. In fact, the whole mission in East Kalimantan would not have been possible without the activeinvolvement and assistance of Koesnadi Wirasapoetra of the Yayasan Padi Indonesia (Rice FoundationIndonesia), and PLASMA (Institute for Environment and People Empowerment) who helped us make initialcontact with informants, relief organizations and other institutions. They also assisted by sending a member oftheir staff with us into the survey area.Although the collected information cannot be considered statistically representative, and therefore cannot beused to draw scientifically tested conclusions, we believe that it offers a snapshot of the food security situationin this area of East Kalimantan. The report’s value lies in its objectivity, and because the facts reported belowaccurately reflect the words and thoughts expressed to us by the people we had the fortune and pleasure ofinterviewing during our mission.The structure of this report reflects the issues that were raised by those we interviewed, and reveals thecharacteristics and nature and of the alleged ‘food crisis’ in Indonesia.Assessment of the food security (diet) situation at the local levelA survey conducted by a consortium of 11 NGOs between August and October 1998 indicated that around 60per cent of the 1008 villages in the province of East Kalimantan were affected by food shortages. The samesurvey also showed that the most affected villages were in rural areas. Due to a lack of reliable and accessibledata on the food situation in the province, this was the only “hard” data we had at our disposal when we beganthe filed survey. Therefore, subsequent interviews with villagers and other actors involved in this issue wereessential in providing the mission with the means to determine whether or not here was a food crisis in EastKalimantan.The mission first visited the village of Jengan Danum. Our host there said that although the Rio TintoFoundation – the philanthropic wing of mining giant Rio Tinto Group – had discontinued its food aid activities,the villagers felt they were still in need of rice for their daily consumption. Rice is the staple food in the areaand is not easily replaced by other food crops. However, we sensed that the issue at stake was one ofpreference, rather than real need. The people in the village could easily rely on other products to meet theirdaily nutritional needs especially since the rainy season had stimulated the cultivation of a whole range ofcrops. Though far from ideal, the situation could not be defined as one of food emergency. 29
  • 30. We sensed that the issue at stake was one of preference, rather than real need, and that the lack of rice there was being seen as a lack of food.The same scenario was played out in Tapulang, the second village we visited. Our host there also expressedthe need for food aid, and in particular for rice. Rice and cassava are the two staple foods in the villagers’ diet.Since the 1998 production of cassava was satisfactory, the lack of rice there is being seen as a lack of food.However, our host said that there had been a genuine deterioration in the villagers’ diet since the onset of thecrisis, but this is mostly due to decreased purchasing power. Before the crisis, villagers were able to buy 1 kg.of rice for Rp 800, but at the time of this interview the actual market price of husked rice had increased to Rp3000 per kg. Villagers generally felt that, even if incomes had increased with prices, they were still faced witha much more restricted diet. Along with the decreased variety of foods that they were consuming, villagersalso declared that they were eating less in absolute terms.Our main informant in the third village confirmed changes in rice consumption since the crisis. While beforethe crisis the average individual consumption of rice in the village was about 15 kg. per month, during thecrisis that figure decreased to a level of 4 kg. per month. However, the villagers of Benung showed signs ofendurance that was apparently missing in the previous two villages. In fact, they had quickly learned tosubstitute the shortage of rice with cassava and sweet potatoes. This meant a fairly major adjustment in theirdietary habits, since before the crisis they used to feed those products to their livestock.In absolute terms it might be interesting to mention that, at the time of the interview, 10 families out of 57 (17per cent) reported serious problems because of the lack of food.Although the majority of the people interviewed in the various villages were still asking for food relief orsupport, they seemed to have a clear understanding of the impact of the crisis on their food situation. Forinstance, when asked to compare their situation with that of the people in Jakarta, those present at the meetingin the village of Tapulang recognized that they were better off, mainly because they could rely on differentfood sources. Furthermore, they stressed the fact that since the onset of the crisis they had not registered anycases of starvation or of thievery in the village.However, the seriousness of the alleged food crisis in East Kalimantan was again reinforced during a laterinterview with Mr. M.M. Osman, the Logistic Coordinator of CARE, East Kalimantan. In fact, at the time ofthe meeting Mr. Osman was waiting for the latest nutritional report made by CARE staff, which he believedwould present a situation more bleak than previously expected. The main reason for that, he assumed, was therecent crop failure, due to pest attacks (insects) Mr. Osman was essentially of the opinion that there was still afood shortage and a situation of food insecurity in East Kalimantan.Assessment of other impacts of the economic crisis on local communities (e.g. health,education)From the different interviews we conducted during the mission, it seemed that there were no problems withbreast-feeding. However, the government was not implementing any programs directed towards baby nutritionand health.In terms of assessing the impact of the crisis on the school attendance of the village children, our informants inthe village of Tapulang told us that the situation had remained unchanged. Children were still helping theirfamilies in the same way as before the crisis, and there were no cases reported in the village of childrendropping out of school.Our main informant in the village of Benung, however, had a different opinion of the impact of the crisis onthe educational and the health situation of the villagers. The villagers had in fact reported increasing 30
  • 31. difficulties in the ability to pay for health and education services. He informed us that, only recently hadgovernment officials started collecting data about children dropping out of school.Main causes of food insecurity/shortagesThe previously mentioned survey, which had been carried out by a consortium of 11 NGOs between Augustand October 1998, in the province of East Kalimantan, gave as the main reason for the food shortages, a lack ofpurchasing power (rawan daya beli). Failing production and distribution (rawan pangan) was deemed as aless relevant cause.Lack of purchasing power, resulting from the long and consecutive droughts, and from the fires that affectedthe area, was also declared as the main problem affecting the population the village of Jengan Danum. Thefires of ’97 and ’98 were estimated to have destroyed about 70 per cent of the 2.224.63 km representing thetotal amount of the village area. Sixty per cent of it was and owned by local people, where they used to growrotan, rubber and mixed fruit orchards (Simpong). The remaining ten per cent was public forestland. The onlycrops not affected by the fires and had been cassava and corn. The fires had also affected the production ofrice for local consumption. After all that, another plague appeared – an infestation of grasshoppers.Long and persistent drought, leading to harvest failure, was the main problem still threatening food security inthe village of Tapulang. In a kind of self-sufficient production cycle, rural villagers had learned, through time, to become independent from external sources of income and food.With regard to the previously reported situation faced by the 10 families in the village of Benung, our hostthere was convinced that these families had the same problems before the crisis or the droughts. He believedtheir problems stemmed from the age composition of the families. Most of the family members were ofconsiderably young age, and there were a very high proportion of children, babies, and even some people withintellectual disabilities. The relationship between active and non-active family members was completelyunbalanced, with less than 30 per cent of the family members actively involved in farming activities.Mr. Osman, of CARE East Kalimantan, believes that the main reasons for the persistent situation of foodinsecurity in the province were both a lack of purchasing power and a lack of production. Farmers could noteasily commercialize their products because of the limited accessibility of most of the rural areas in theprovince. Farmers were therefore dependent on local markets. The increase in prices for a lot of agriculturalproducts observed throughout the rest of Indonesia, as a result of the devaluation of the Rupiah, had notreached them.Assessment of the local agricultural production system (e.g. impact of the Green Revolution approach; ricedependency, etc.)Previously reported rumors of shortfalls in the agricultural production of the province were in contrast with theresults of the above-mentioned survey by the 11 NGOs. The local agricultural production system, after twoconsecutive years of oppressive droughts, was in fact reported to be back on track to a full recovery. Theabundant rains of the last months had improved expectations for the next harvest. The harvest of intensive ricevarieties in the province had in fact already been collected during the months of December and January, whilethe local rice varieties were expected to be ready for the months of February and March.Regarding the overall agricultural practices of the rural communities of East Kalimantan, PLASMA staffstressed the strong dependence of these communities on the forest and its products. In a kind of self-sufficientproduction cycle, rural villagers had learned, through time, to become independent from external sources of 31
  • 32. income and food. Rotan – which they collect from the forest – was before the extensive fires of ’97 and ’98,the main source of cash for most of the people inhabiting the rural areas of East Kalimantan.Their agricultural system was described as being based on the rotation of organic farming, together withmulching practices. Farmers were reported to grow their main crop (rice) by periodically shifting the plot ofland cultivated, though remaining within a predetermined and delimited area. PLASMA staff specified that thelocal rural population normally relied on dry and up-land rice, plus cassava, corn and vegetables (tomatoes,cucumber, etc.). It added that the self-sufficient system was complemented by the customary maintenance aSimpong, or fruit orchard, near the home. It was also mentioned that about two or three weeks before themeeting, the first rice crops – obtained with seeds distributed by the consortium of NGOs – had beenharvested.PLASMA’s accurate description of the main features of the local agricultural system found confirmation in aninterview with our host in the village of Benung, who told us that the basic subsistence activities of the localpopulation were mainly concentrated around.• Padi rice• Simpong (mixed fruit orchard)• RotanHe further specified that normally they used rotan to produce handicrafts for sale, but they also collected it tosell by weight. One kilogram of the best variety (Sega) could be sold for Rp 400.Previous attempts by local authorities to stimulate the adoption of high yielding varieties of rice by localfarmers were suddenly bolstered during the crisis by the intervention of different aid and philanthropicorganizations. In particular, we discovered that Rio Tinto Foundation had started intense programs of rice seeddistribution in the area of our survey. Their supply of seeds came exclusively from a company based on theisland of Sulawesi, and the seeds were the same varieties that the government was sponsoring. According toRTF representative Mr. Limberg, given the large quantities of seeds needed for such an operation, it wasimpossible to rely on suppliers from East Kalimantan. He said that after the new, abundant, rainy season hadstarted in August 1998, the Foundation had begun to distribute the improved variety IR 64. Through the hiringof an external FAO expert and a graduate from the agricultural University of Samarinda, RTF had planned toimplement an Integrated Pest Management system in the production practices of the IR 64. However, whilethey thought that the local farmers had become almost solely dependent on the distributed IR 64 variety fortheir following harvest,Mr. Limberg had to admit that just recently he had discovered that around 50 per cent of the most recentharvest was of local varieties. As to where the seeds for those local varieties came from, was still not veryclear, but he supposed that they came from within the households themselves. He had noticed that people inthe area had the habit of storing their rice, originally meant for consumption for periods up to 2 or 3 years.That could explain the sudden appearance of seed varieties that were not supposed to be available. It alsobecame quite clear that local farmers considered non-local varieties of rice, like the ones being distributed bythe different relief agencies, as not suitable for the ecological conditions of the area. Soil and topography werementioned as limiting factors, as well the capacity to cope with competition from weeds.As part of its long-term strategy, RTF had also decided to develop irrigation schemes in those villages were theconditions would have been considered right. The selection procedure had to happen on a case-by-case basis.In some of the selected villages, the villagers themselves had already started working on an irrigation system,even before RTF had gotten involved. The final aim of RTF, declared Mr. Limberg, was to address the realneeds of the communities and to make them completely self-sufficient.In the village of Jengan Danum – where RTF had been particularly active in its efforts to ‘improve’ localagricultural practices – the potential changes in the agricultural and life habits of the local farmers could not beforeseen or assessed at the time of the inspection. In the past, people in the village had always grown dry land 32
  • 33. products, such as rice, corn, cassava and mixed fruit. With this new system they hoped to harvest rice two orthree times a year, instead of only once a year with their traditional methods. The difference in yield betweenirrigated rice and dry land rice were also expected to be quite remarkable. In fact, while an average harvest ofirrigated rice could easily reach three or four tones per hectare, a dry land harvest only averaged something like0.5 tonnes per hectare.Our main informant in the village of Benung had a different opinion on the suitability of HYVs and the relatedtechnologies to the local conditions. He believed that the distributed seeds were unsuitable for the ecologicalcharacteristics of the area. Those seeds had been distributed by KEM (Kelian Equatorial Mining – the local‘brand” of Rio Tinto Mining) and Plasma. The production costs for the latest harvest obtained through thedistributed seeds, were perceived as very high and were estimated to be equal to the value of the harvest itself.The distributed variety was Chirata. The breeding of this variety had to happen in lowland areas, but theactual planting was supposed to take place in the up-lands.The statements previously collected in the village of Tapulang reinforced the arguments of this informant.There, although it was not clearly formulated, it seemed that the failure in the latest harvest was ascribed to thevarieties of non-traditional seeds that had been distributed. The villagers said that they did not normally haveany problems with the local varieties of rice, which could be grown without the need for irrigation.The strong linkage between the regular recurrence of fires with the agricultural production system of theprovince as made clear to us during our visit to the village of Jengan Danum. The villagers participating in themeting declared that last years fires were not the only ones in the long burning history of East Kalimantan. In1982 there had been huge fires that had destroyed most of the forest in the area. When asked about thepossible origin of the more recent fires, they said that they believed local agricultural practices had been themain reason for such. In fact, they said it was customary in the area to apply slash and burn practices beforestarting to grow a new crop. They thought that some of these “innocent” fires could have easily escaped thecontrol of their initiators and expanded into an immense and devastating fire. Companies involved inplantation businesses could not be counted among the usual suspects this time, they said, because there were nosuch companies active in the area. Small farmers carried out all the agricultural activities. Because they depend so heavily on the surrounding forests, the villagers felt the forest had to be protected not only from fires, but also from human agents such as logging companies.The impact of the fires on the agricultural production of the area as not felt equally in all the villages.According to our host, the agricultural activities of the villagers of Benung had been only slightly affected bythe fires. In fact, the fires had incinerated only 15 hectares of their land. The real natural disaster that hadstruck their area had been the 13 months of drought between 1997 and 1998. A comparable drought couldonly be traced back to the year 1982, when it when ton for a period of about 10 months. However, in responseto the fire emergency, they asked authorities to implement protection programs for the forest. Because theydepend so heavily on the surrounding forest, the villagers felt the forests had to be protected – not only fromfires, but also from human agents such as logging companies.Coping mechanisms of local communities (e.g. alternative food sources; alternative incomegenerating activities; etc.)PLASMA staff believed that the huge damage caused by the forest fires had seriously compromised thepossibility of local communities to rely on rotan for their cash generating activities. First, the rotan destroyedby the fires had to be replanted then potential users had to wait for at least 6 to 7 years before they would beable to utilize the new plants. At the time of the survey, some planting activities had already started.One of the first consequences of the loss of such a cash- generating products had been the increase in localpeople looking for gold. Before the fires, the percentage of gold-diggers in the area was much lower. The 33
  • 34. increase in this activity was also justified by an improvement in revenue prospects due to the economic crisis.In fact, at the peak of the crisis, a gram of gold could be traded for Rp 124,000/g. and even at the time of thesurvey when the price had come down to Rp 70-80,000/g., people could still make enough money from thisbusiness.Besides destroying their crops, the villagers of Jengan Danum reported that fires had also annihilated theirmain source of cash: rotan. At the time of the meeting, approximately 90 per cent of the villagers had nopurchasing power. In response, they were looking for alternative cash generating activities by working forlogging companies, fishing, or selling the young and recovering rotan as a food product. Non-farmers andpart-time farmers often worked in food stalls, workshops, or sold petrol.In terms of cash generating crops, the village of Tapulang was luckier than Jengan Danum. There was in factsome rotan left in the area that the villagers could sell. Quite surprisingly however, traders from Damai wereoffering lower prices for rotan than before the fires. The fixed price for 1 kg of rotan was now Rp 500, whilenormally it was Rp 700. The other people present at the meeting had absolutely no idea what the reason forthis decrease in price was.Unlike the previous village, in Tapulang people were not redirecting their activities towards alternative jobs.They were still practicing their traditional activities of farming and gathering from the forest.The central position of rotan as a cash-generating item was also confirmed by our host in the third village wevisited. He said that the people of Benung had sold rotan or rotan products to pay for the rice distributed by thegovernment the previous year.Ethnic aspects of the crisisIn the course of our investigation we did not observe any specific characterization of the crisis along ethniclines. The only difference we observed among the various ethnic groups was in the performance ofagricultural practices. The people coming from South Sulawesi, concentrated mainly in the area aroundBalikpapan, generally did not know how to perform shifting cultivation properly.The Dayak ethnicity is dominant in the inner territories of East Kalimantan. The majority of the Dayakpopulation is Christian, whether Catholic or Protestant, while the Muslims originally came from Java or SouthSulawesi.Accessibility and reliability of dataThe accessibility and availability of reliable data on the food situation in the province, both in terms ofagricultural production and of consumption, was deemed by PLASMA as one of the main constraints indesigning assistance strategies for the local population. In response to this situation, a consortium of localNGOs involved in food security issues had decided to carry out their own survey, although they also got somehelp from government officials. The 11 NGOs utilized about 100 people in the collection of the data, and thefindings of the survey – already presented to government representatives – were reproduced in a couple of thedocuments our group received during the trip.Lack of confidence in official data had also motivated other actors involved in relief activities in the area of oursurvey, to procure data for themselves. The RTF, for example, had to collect their own data, especially tomake a rough distinction between farmers and non-farmers. Farmers became the target group of the food reliefoperation. RTF decided not to rely on government data because the only data available at the sub-district leveldated back to 1996. They had started collecting data in February 1998, during the second month of the seconddrought. The first drought had taken place in 1997. The data collection was completed by the end of April1998. 34
  • 35. CARE conducted their own survey too, and in some cases they rejected the suggestions made by thegovernment. Figures given by the government about family composition and numbers were consideredinaccurate, both in excess and in defect. A nutritional expert from CARE had also been training 30 people onnutritional survey issues.The role of international (relief) organizationsIn a tentative graphic representation of the international agencies involved in relief intervention in EastKalimantan, along with their local and international partners involved in the distribution of aid, PLASMA staffoutlined three different levels of intervention. The highest is represented by the financial source of the aid, thesecond by an international organization translating the received financial support into production andconsumption inputs, and the third level is given by the organization or institution actually implementing thedistribution of the inputs. There are also three different lines of intervention, referring to three distinctinternational donors: AUSAID, WB and CIDA.1st Level AUSAID WB CIDA2nd Level NGOs/Rio Tinto Foundation WFP Care3rd Level NGO/Rio Tinto Foundation Dept. Social Affairs Local AuthoritiesThe World Bank, according to PLASMA, was mainly involved in relief activities through subsidies for thetransportation of rice – about Rp 200 for each kilogram. However, according to PLASMA, that amount wasnot sufficient to cover the high transportation costs in the remote areas of the province.CARE International Indonesia started its operation in East Kalimantan in September 1998. The original areacovered was the district of Kutai, and from the very beginning the CARE initiative was conceived as anemergency project. At that time CARE encountered huge and extensive food shortages in the area. They hadinitially targeted a group of 20,000 families; spread around 15 sub-districts of the Kutai district. At the time ofthe meeting they had reached 17,000 families. They also distributed rice seeds to the same-targeted group,plus some others. Its fund were said to come totally from CIDA. At the time of the interview the CARE staffconsisted of about 100 people, including two expatriates.The whole project was implemented according to a “food for work” principle. The minimum requirementsthey posed on the targeted beneficiaries was a contribution by each individual of at least 4 hours of work perday, for an uninterrupted period of 5 days. The reactions of the villagers on the “food for work” principle werejudged as positive. To support this statement, Mr. Osman mentioned that sometime, although the requirementwas to commit one member of each family, people offered to work all together in the projects proposed byCARE. The activities implemented under this scheme were chosen by the recommendations of an ad hoc“Project Committee”, set up in each community. CARE engineers checked the viability of the selected works.CARE also implemented special programs to assist 15,000 children under the age of five and 5,000 pregnantand lactating women.The first phase of their project was due to be completed at the end of February 1999, Mr. Osman was talkingabout a first phase because he was almost sure that an extension of at least 6 months would be granted to theproject. Besides, CARE intended to expand its activities to the districts of Berau and Pasir, raising the totalamount of villages covered to 118. This move was in reaction to a written request by the Provincial Governor.The second phase of the project would focus on rehabilitation and development activities in the agriculturaland educational sectors, depending on the donor’s interests.The main criteria in the selection of beneficiaries for the program were: 35
  • 36. • They had to be farmers• They had to be reached logistically• Whether they had land or not• The number of meals per day that they were enjoying• The local government was not supporting them In the areas covered by its operations in East Kalimantan, CARE was believed to have distributed an average of 50 kg. per month per family, for a period of about six months. However, rumors about malfunctions in the distribution system were increasingly reported and more specifically, there were allegations circulating that the actual content of the distributed sacks of rice was rarely close to the officially declared 50 kg. ranging instead between the 39 and 50 kg. It was not clear where the rest of the rice had ended up.The role of the State (different agencies: e.g. Bulog, Dolog, Provincial Government, etc.)When putting together the different information on the involvement of official authorities in relief activities inEast Kalimantan, the general picture was one of a multiplicity of actors and strategies.First, there is the reference by PLASMA staff to the interruption of subsidized rice distribution by theDepartment of Social Affairs, about three weeks before our meeting. The insufficient amount given by the WBfor transportations costs was the official reason given for having stopped the operations. The Department,according to PLASMA, said they were confronted with a substantial lack of funds, and were unable to continuethe distribution of cheap rice. Therefore, people living in remote villages had to come to collect their rice atthe sub-district centers (i.e. Melak, Lambing, etc.). The quantities of rice being distributed by the Departmentauthorities were believed to be inferior to those being distributed by CARE, but PLASMA did not know theexact figures.We also heard (through PLASMA) that the local government of East Kalimantan, under the National SocialSafety Net Program and through the mediation of Dolog, was providing subsidized rice at a price of Rp 2,000per kilogram and was giving financial support to local traders for their transportation costs.The government presence in the territory was, to a certain degree, confirmed by some of the people weinterviewed in the villages. Their information, however, revealed the disunity and the shallowness of suchintervention. For example, one of our informants told us that local authorities were active in the territorythrough Dolog, which had been distributing 10-kg sacks of subsidized rice to each family every now and then,with no regular scheme. The major problem encountered by the villagers in purchasing this rice was the factthat they had to pay the whole amount all at once. Only 45 per cent of the 300 villagers (135) were reported tohave done so regularly. Dolog had distributed the rice three times during the last year. The quality of the ricedistributed the first time in March 1998 was reportedly of good quality. After that, the quality of the riceworsened and a lot of people refused to buy it. Moreover, according to the same informant, the presence of thegovernment in the territory was reinforced by the deployment of two extension workers for each sub-district –one in charge of rice and a second crop; and one in charge of rubber.Our host in the village of Tapulang told us that the local authorities had distributed rice for consumption during1998 in that village as well. The distribution of subsidized rice took place twice in that year, with a fixedquantity of 10 kg. per family, as in the village of Jengan Danum. The Government rice had been fixed at Rp1,100 per kg. Besides these sparse contacts, the villagers had not received any help from government officials.They thought the main reason for this was the difficult access to the area.Finally, to give a clear example of the often-controversial nature of government intervention in the area, wewill report the interesting story that our host in the village of Benung told us. Our informant said that duringthe crisis some government official had shown up in the village and under the umbrella of the widelypublicized Social Safety Net Program, proposed to undertake road improvements in a joint venture with the 36
  • 37. villagers. The government would guarantee the repayment of the improvement costs. Unfortunately, monthsafter that promise had been made, and the agreed 9-10 km of road had been improved. None of the committed24 million Rupiah had been seen by any of the villagers. On the 15th of January 1999, the agreed payday, noneof the officials from Samarinda came to the village. This inexplicable situation had a huge impact on thealready unstable and weak economic balance of the village. Our host himself, because of his leading role inthe village and in that undertaking, was being confronted with harsh consequences. A remarkable group of 73villagers had been working full time on the road for a period of 12 days. He had taken care of part of theirdaily allowance, according to the standard daily wage paid under the Social Safety net Program: Rp 7,500. Hehad decided, therefore to pay at least Rp 5,000 for each day, to each worker. But in order to get the funds hehad to borrow from the local government. He even borrowed additional money from his neighbors to buydaily necessities for himself and his family during this time. At the time of the interview, he confessed, he hadno idea how much money he had actually borrowed.The role of local NGOsIt seemed that local NGOs were involved in relief activities in the area, essentially, through the consortium of11 NGOs that has previously been mentioned in the report. In response to the emergency situation inagricultural production, the consortium had offered help to the village through the distribution of rice seeds fordry, upland farming. The consortium distributed 20-25 kg. of seeds per family. The host of our meeting in thevillage of Tapulang, was a participant in the program of food relief promoted in East Kalimnatan by theconsortium.With regard to the role played by PLASMA, from the meeting we had with its staff we got the impression thatthe organization was mostly involved in environmental issues and that might explain the organization’semphasis on the Rio Tinto mining company. The first time that PLASMA raised the pollution issue regardingthe company was in 1982. In 1995 PLASMA started a national campaign against Rio Tinto. This wastransformed into an international effort in 1997, when Community Aid Abroad and Oxfam Australia joined thecampaign.The role of other actors involved in the “food crisis” (i.e. companies, army, religiousgroups/institutions, etc.)Rio Tinto Foundation is probably the most relevant action, in the area covered by our survey, which cannot beplaced in one of the previous categories.Rio Tinto Foundation (RTF) was founded in 1995. The decision came directly from the management of the“mother company” Rio Tinto Group. The management was interested in creating an environmentally andsocially friendly image for the company, and it was definitely committed to avoiding environmental critiquesor attacks on its various local operations. When they decided to set up RTF, they could already rely onseventeen years of similar experience in Namibia, which was considered a successful undertaking. KelianEquatorial Mining (KEM) started to set up the necessary facilities in 1989 and became operative in 1992.Out of the first survey, which was conducted by RTF between February and April 1998, there came two mainproposals.• The need to address the basic needs of the local people in terms of rice consumption,• The need to provide longer-term solutions to the food security situation of the local people. Mr. Limberg considered the nature of RTF’s current intervention in the area as exceptional. Until 1997 its main activities in the agricultural sector had been centered on training. Due to the extraordinary characteristics of the crisis, RTF decided to develop a new emergency strategy. The target area of RTF operations covered 104 villages distributed across four sub-districts. Originally, RTF hoped to supply food aid to 65 – 70,000 people, but eventually settled on a more manageable number of 55,000 inhabitants. 37
  • 38. Many people believed that the Rio Tinto Foundation had just been a smooth façade for the less legitimate business of the mining corporation.Land ownership and compensation issues in the area were also very hot topics with regard to the activities ofKEM. There had been a lot of complaints from the villagers around the mining site, about ownership rightsand accurate delimitation of land properties. The debate had recently moved to the national level and thewhole issue had been taken under consideration by the government. RTF, according to Mr. Limberg, wasaware of the problematic situation, but because the “mother” company was involved in it, RTF had receivedclear instructions not to get involved in those issues of land reclamation. Its mission had to remain focusedexclusively on health, agriculture and education.The general perception of RTF operations in the area was quite diverse. According to Mr. Wirasapoetra, theacceptance at the local level of the Foundation – and its operations – had been controversial since thebeginning of its activities in 1995. The main reason for this was the apparently widespread feeling that theFoundation had been set up to improve the name of the mother company and to make its intervention in thearea more acceptable to the local people. In other words, many people believed that the Rio Tinto Foundationhad just been a smooth facade for the less legitimate business of the mining corporation. Other people, during ameeting in the village of Jengan Danum, were convinced that RTF’s involvement in relief activities had beenmotivated by a national law which forced foreign companies to devolve at least 2.5 per cent of their profits tosocial activities.Notwithstanding these doubts about the motivation of RTF’s involvement in the area, it was a fact that theinvolvement was substantial. First of all, RTF had started extensive programs of distribution of seeds andconsumption rice to villages in four sub-districts surrounding the mine site. The total number of villagesinvolved was 104. Outside the four sub-districts, other relief agencies were also active.The distribution of rice and rice seeds took place between April 1998 and January 1999 and it stopped whenthe first yields of dry land rice were about to be harvested. The average quantity of rice for consumptiondistributed by RTF was 5 kg. per person.According to the information obtained during the meeting in the village of Jengan Danum, RTF got itsconsumption rice mainly through the financial support of AUSAID and KEM (Kelian Equatorial Mining). Therice was initially purchased directly from Dolog, while after a while (and for reasons that were unknown to theinformants). RTF decided to buy it from local traders in Samarinda. The rice was coming from Sulawesi. Theseeds instead were bought with money coming only from KEM.The distribution of free rice prioritized farmers, while government officials and local business were excludedfrom it from the very beginning.The two main varieties of rice-seeds that RTF as distributing to the local farmers were:• IR 64• Chirata Kelian Equatorial Mining Corporation distributed one kilogram of seed per person per month, and did so for nine months, from April 1998 to December 1998. In the village of Tapulang we were informed that K.E.M> had also been distributing the same variety of seed to the villagers, but because of an insect infestation, the rice plants that developed did not bear any fruits. 38
  • 39. There appeared to be evidence that these companies had been offering money to villagers to set fire to the forestSecondly, RTF had been involved in resolute efforts to develop irrigation systems for the cultivation of rice, toprevent local agriculture from being too dependent on shifting cultivation and on dry-up-land rice farming.The main project was being executed in the village of Jengan Danum and it was also expected to include theconstruction of a dam, although at the time of the visit, RTF was still waiting on the opinion of the irrigationexpert.The actual execution of the irrigation works at the village took place through the common effort of about 150villagers joining their forces for a period of one month and digging all the needed channels. During that timethey got rewarded through a “food for work” system. The result of that undertaking had been the clearanceand irrigation of 100 ha of previously uncultivated land, which, when divided by the number of inhabitants ofthe village (around 300) gave a tentative figure of 0.3 ha for each farmer. The final aim of the program was toclear and irrigate at least 320 ha of land.The land already cleared had been divided and each plot had been given to an individual farmer. However,they still carried out most of the needed activities in the field through communal efforts, based on reciprocity.Only one farmer was reported to have worked his land through a small rice-tractor, which was owned by thecommunity.Thirdly, RTF also had a quite well developed health program (mainly focused on tuberculosis), which hadbeen implemented, in the area for some time already.Other relevant actors in the area, playing an important role in the access and use of natural resource, were thedifferent logging and palm oil companies. In an investigation recently conducted by PLASMA and WWF itwas concluded that the main cause of the extensive fires that destroyed thousand of hectares of forest andagricultural land in the province would be found in the illegal activities of palm oil companies. There appearedto be evidence that these companies had been offering money to villagers to set fire to the forest. One of thecompanies mentioned in the investigation was the London-Sumatra Company, in which shareholders from thelocal government were supposed to be involved.Logging companies, on the other hand, were identified as the main wrongdoers with regard to theirenvironmental impact. People in the village of Jengan Danum felt that the logging companies were responsiblefor most of the erosion and flooding taking place in the area. Besides, the companies were also involved inissues of territory management among the different villages and in the problem of disputed territorial control.At the end of the discussion at the village of Tapulang even the name of one of these companies wasmentioned to us: Bophasa.Interactions between International (relief) organizations and the other mentioned actorsThe landscape of organizations actively involved in relief activities in the province did not seem to be verytransparent. The first organization that was brought immediately into the discussion with PLASMA wasCARE International. CARE had originally started its operations in the area with PLASMA, but about sixmonths before our arrival, CARE interrupted all cooperation with PLASMA without any warning orexplanation. Since then, CARE has been reportedly working with the local authorities.According to Mr. Osman of CARE, the organizations decided not to work with local NGOs because they couldnot reach the remote areas, and therefore they were not useful in terms of project implementation. He alsodeclared that they had never used any government channels for distribution either. CARE was indeed meetingonce a month with local authorities, but purely because the latter had required CARE to deliver a monthlyreport on the status of the relief activities. 39
  • 40. PLASMA had initially joined a consortium of 7 local NGOs – later to be extended to 11 – which receivedfinancial support from USAID, CARE and Rio Tinto Foundation to purchase and distribute food aid and riceseeds for planting. The first phase of the distribution took place between June and August 1998 and the secondbetween September and October of the same year each phase concentrating on different areas within theprovince. The operation was started and conducted according to the need for food as revealed by the villagersthemselves. Each NGO took care of a different area.RTF had started its operations in April 1998, thanks to a major grant given by AUSAID, RTF got the necessaryfunds to run its emergency relief program through three international aid agencies and through contributionscoming from the Rio Tinto Group itself. The amounts of the single contributions, as revealed by Mr. Limberg,are as follows:• AUSAID; AUD $500,000• New Zealand Embassy: Rp 200 million• Canadian Embassy: Rp 200 million• Rio Tinto Company: US $ 200,000 An FAO volunteer working with RTF, who joined the meeting in the village of Jengan Danum, told us that the FAO was also supporting RTF through an Integrated Pest Management (IPM) Program carried out in 25 villages in the area. Local villagers were already meeting once a week, to discuss the technical aspects of the program. Initially the program would have applied only to rice farming, but in later stages other crops had been included.The Asian Development Bank reportedly sponsored, through government assistance, a 5,000 ha rubberplantation project in the area. Seeds had been given for free, while fertilizers were distributed on credit. Thatpart of the deal eventually turned out to be quite tricky for the farmers. In fact, when they could not repay theincurred debts, they were often forced to cede their land, or it was directly confiscated.Mr. Osman of CARE: East Kalimantan, informed us that the World Food Program, through the Ministers ofAgriculture and Welfare, was also involved in food aid in other areas of East Kalimantan.Alleged price and distribution distortions of food aidThe diversity of actors operating in East Kalimantan is matched only by the diversity of prices and quantitiesof rice distributed. According to PLASMA, the local government of East Kalimantan – under the nationalSocial Safety Net Program and through the mediation of Dolog – was providing subsidized rice at a price of Rp2,000 per kilogram and was giving financial support to local traders for their transportation costs. The marketprice of husked rice in Samarinda was, at the time of the meeting, around Rp 3,500 per kilogram, while in thevillage of Tapulang it was just Rp 3,000 per kg. In the village of Jengan Danum the price of the subsidizedrice was reported to be Rp 2,500/kg. Dolog distributed the subsidized rice to the local cooperative. It was thenthe cooperative that fixed the final distribution price for the village. The local market price of husked rice wasequal or higher than Rp 3,000/kg.In the village of Tapulang, we were told that the local authorities had distributed subsidized rice forconsumption during 1998 with a fixed quantity of 10 kg per each family. The price of the rice had been fixedat Rp 1,100 per kg. But unlike the village of Jengan Danum, this village had no cooperative that couldcoordinate the distribution of subsidized government rice. The only cooperative that they could refer to was atthe sub-district level. Therefore, distribution happened in a quite disorganized way, and the final price washigher than the price fixed by the government (about Rp 1.300 per kg). Consequently, the district cooperativesuddenly decided to stop all operations.The villagers of Benung were receiving rice and rice seeds from KEM and RTF. A 25 kg bag of rice forconsumption, with the KEM name impressed on it, was visible at the entrance of the long house. In the case of 40
  • 41. that specific household, KEM had been distributing 52 kg of rice each month, to be divided among the 13members. The government had also been distributing rice, but not for free. The price of the subsidized ricewas Rp 2,400/kg. Rice was distributed three times during 1998, and each time a 5 kg. bag of rice was sold foreach person. From our host’s account, we understood that they “had to buy that rice”, but it was not very clearwhether the purchase was coerced or compulsory.RTF had initially distributed rice rations of 5 kg per person per month, but eventually brought down thequantity to 4 kg. RTF realized that it was not enough for the monthly food intake requirements of an averageperson, but it considered its contribution as a complementary one. The foundation had never distributed low-priced rice. The main criterion for the choice of the operation area had been the influence zone of the KelianEquatorial Mining (KEM) site. All the villages somehow affected by the activities and the existence of themine was considered as part of the targeted zone. It was therefore not a coincidence that the actual distributionof rice and of rice seeds had been organized and carried out through the joint efforts of RTF and KEM.We considered the meeting with CARE East Kalimantan as very relevant for our mission in the province. Notonly because of the big role-played by CARE International in relief activities, but also because of theircontroversial role in the area. Unfortunately we were not able to get any consistent information about theabove-mentioned issues, except quantitative data on the implementation of their relief programs and otheralready known facts. During the entire one-hour interview, Mr. Osman behaved quite evasively and he showeda constant uneasiness in answering very specific questions. He also refused to be taped.The information we got from his showed that CARE distributed 50 kg of rice per month to each family. Thetotal quantity of rice for consumption they could use was 3,000 metric tones, while they had 150 metric tonesof rice seeds. All the rice for consumption distributed by CARE had been purchased from Java and had beennational rice. The distribution was organized in each sub-district through the assistance and monitoring of oneCARE staff member and four field assistants (sometimes six) hired directly from the villages. The major tasksof the field assistants were to check the correct implementation of the food for work part of the project. Theyhad to be in possession of at least a high school level education, and they were given a one-week trainingcourse by CARE staff.General Conclusions• The first general conclusion that Group B can formulate is that there is not enough evidence to talk of a food emergency situation, or a food crisis.• However, during most of 1997 and 1998, there had indeed been a severe situation concerning food security and food shortages, which can almost entirely be ascribed to the forest fires and the droughts.• Donor organizations and other agents involved in food relief activities in the area have recently (Dec. – Jan.) decided to stop the distribution of food aid, mainly because of positive harvest prospects.• The favorable rainy season that started around April – May 1998 has in fact improved the local situation in terms of agricultural production expectations.• However, there is still an evident lack of purchasing power due to loss of traditional sources of income, since the rotan plant from the forest (traditionally used for the productions of handicrafts that are sold to local tradesmen) were seriously depleted by the forest fires.• Reliance on other food crops (such as cassava, sweet potatoes, etc) means that the people of East Kalimantan are in a better nutritional position than many of their compatriots who have grown increasingly dependent on rice as their sole staple food source.• Farmers are the only targeted group for food relief activities in the area. Small businesses do not seem to have been impacted too seriously by the current economic crisis.• The geographical isolation of the area has created a fairly autonomous and self-reliant agricultural system. Production and consumption of agricultural goods are normally locally based. Cash for the satisfaction of other needs is, as mentioned before, usually earned through alternative activities, be they in the handicrafts sector, or in the delivery of various micro services. 41
  • 42. See, also:See also: Seacon-Manufacturing Crisis - Report of the F... 220k - Microsoft Word - View as HTML... since Indonesia needed to import more than 25 percent of the rice available in ... farmers dependent onexpensive external inputs of seeds, fertilizers ...seaca.net/_articleFiles/86/Seacon-Manufacturing Crisis - Report of ... ---oo0oo--- Reaction from WFPSubject: Clarifications/Comments on the Councils Report Date: Tue, 18 May 1999 16:38:43 +0700 From: "Philip Clarke" <Philip.Clarke@wfp.org> To: Biotani@Rad.net.id CC: "Thomas Keusters" <Thomas.Keusters@wfp.org>, "Thomas Lecato" <Thomas.Lecato@wfp.org>, "Rokeya Rashid" <Rokeya.Rashid@wfp.org>, Abdur (ESCG) <Abdur.Rashid@fao.org>Dear Mr. Tjahjadi,I have carefully read the Councils email version "Manufacturing a Crisis" sent to me by Ms.Li Kheng Poh as coordinator of the fact-finding mission of the Council to Indonesia.As I already mentioned to her in my email dated 10 March 1999 (copy submitted to you on10-05-99), I am really disappointed the report is based on many incorrect findings andstatements and that it is therefore only a manipulated vision of the reality.I do not want to be too long, as there are many issues to bring up and will give you fiveblatant examples.1. Most of the papers conclusions are based on FAO/WFPs three Crop and Food SupplyAssessments reports and the interpretation supposedly given to them by Mr. E. Mueller, seeAnnex I of the report. The method used by FAO to calculate the cereal balance sheet is usedin reports made and published each year all over the world. Why Mr. Mueller would nowobject to the method used, I do not know. Be it as it may, if closing stocks are eliminated(in the rearranged table), the opening stocks should be eliminated as well. The deficit then 42
  • 43. immediately jumps to 3.563.000 MT. It would appear that the mission has "forgotten" thisbasic rule of accounting. Is the purpose of the ommission just to prove its biasedconclusion that the crisis has been fabricated? A country the size of Indonesia has to haveclosing stocks, used as opening stocks in the following year. The closing stocks should bethe minimal stocks determined by the GOI and should be the same as the opening stocks(see April 99 report). In the FAO/WFP October report, this was increased from 3.563million tons to 4.300 million tons, only to reflect the higher private stocks and the higherBulogs stocks which had just launched its special market operations programme. TO ME,THIS BASIC ERROR INVALIDATE MOST OF THE CONCLUSIONS OF THEREPORT . Presumably my colleagues at FAO would like to comment on this issue as well.Have you shared your draft with them?2. The conclusion of the mission that instead of food aid the "country needs to educate itspeople and create jobs in addition to agricultural reforms". I fully support thisrecommendation. However, just let us think how long it takes to educate the bulk of thepopulation of Indonesia, one generation? two generations? How to create jobs in a climateof political instability and with an economy in a worse crisis than its neighbours (Japan inparticular)? Who will reform the agriculture? A transisitional government? Let us not bedemagogic and hope that the democratically elected new government can make thesereforms, bring back investors to the country, and that the country will resume its growth.What will the poor do until education, jobs and reforms are available, eat air?3. In its desperate aim to prove that programs are wrong, the mission that visited TimorTimur "found" WFP FFW activities supervised by CARE with USAID money. Let meclarify to you that WFP has not one single activity in Timor Timur. It was originallyincluded in "our programme", targeting pregnant and lactating women and children, butunfortunately never implemented as UN considered that first the political situation there hadto be solved . How can a mission like yours err so much on this finding? As I said above,only in its desperation to prove its predetermined conclusions. In fact, you will be pleased toknow that WFP actually recommended that no emergency food aid was - at the current stage- necessary for East Timor.4. As I explained to your co-ordinator in March, the volumes of food aid mentioned in theCouncils report are wrong. I explained this in March to your coordinator but the wrongfigures are repeated in the final report, for example:a). Malaysia donated to Indonesia 750 tonnes of rice or 750.000 kg, NOT 750.000 tonnes.b). Of the 100.000 tons of grant by Japan, only 50.000 were received (40.000 tonnes byWFP and 10.000 tonnes by the NGO - NU). The other 50.000 tonnes were not received.c). Taiwan promised 200.000 tonnes. Please read the Jakarta Post of today 17-05-99 andyou will read that Taiwan is only now (May 99) providing some funds for Indonesia topurchase rice with it.d). I understand that China has not provided any grant for 250.000 MT to Indonesia.e). The Singapore army provided a grant of 21.000 tonnes of rice. This tonnage went to thearmy. 43
  • 44. The mission concluded that the crisis manufactured by FAO/WFP lead Indonesia to be theworlds top recipient of food aid in 1998. As you can see from the above, most of the figuresprovided in your report (and all the large ones in particular are wrong and you should reviseyour report. You should also know that some African or Asian countries received during thesame calendar year, through WFP alone, 2 or 3 times more food than Indonesia, countriesthat have 1/10th of the Indonesian population! In a country that has a consumption of about33 million tonnes of rice/year, the supply of 140.000 (over a period of 12 months) MT byWFP, will cover less than the consumption of 0.05% of the population. I would hope thatthis figure puts your statement in the proper perspective. .5. Do not use so much my statement about leaving Indonesia and working in Africa again.I do not deny it. However, I said "we will be in Indonesia one or two years and then we willleave again". The reasoning is precisely what you advocate: food security will only existthrough economic growth and development. When the crisis is over, yes we will leave.There are demands on WFP assistance elsewhere, in Africa, Europe, the Middle East,Central America. But then may be Ms. Li Keng Poh considers that the Mitch hurricane, thefloods of China & Bangladesh, the Kosovo crisis are African problems.Mr. Tjahjadi, please feel free to check with us or the government, any of the statementsmade above. I would appreciate it. But do not publish a biased report that will do no goodto Indonesia or to the Council.Best regards.Philip J. Clarke ---oo0oo---e-mail above fwd to Seacon Secretariat in Bangkok Thailand, meanwhile more information from WFP anddebate by PAN Indonesia will be published in Terompet newsletter of PAN Indonesia – now in printing. – inIndonesia version. 44
  • 45. Field ReportDr. A.Z.M. Obaidullah Khan, the former director of the FAO Asia Pacific;Dhakka, Bangladesh, 8 Feb.1999. Notes on Jakarta[I am not venturing to explore the macro-problems of rice-crisis and economic recession inIndonesia. Walden and Anuradha are better equipped to deal with fundamental issues likefree-wheeling markets which invested and then retracted huge amounts of capital inIndonesia or the crooked political and economic institutions left behind by the Sohartoregime. But coming down hard by major development partners of Indonesia like the WorldBank on Indonesias crony capitalism for the economic crisis is only one side of the coin.The other side is their collusion in corrupt practices tearing apart the Indonesian economyand social fabric. Crutis Runyan refers to memos from the World Bank uncovered in July1998 and states : "The World Bank softened reports on Indonesias economy (helping thecountry receive higher ratings and draw in additional foreign capital, which in turn floodedout of the country, substantially aggravating the crisis); tolerated corruption in bank-fundedprojects (despite reports from observers chronicling the disappearance of nearly 30 percentof all Bank funding to corruption); and capitulated to government pressure to inflate figuresto show "epic" improvements in living standards, while four out of five Indonesians stilllived below or slightly above the internationally accepted poverty line of $1 a day".What I have attempted is first to explore the issue of measurement of poverty and second toput the downturn in agricultural production in its context.]1. Measuring Poverty and the McNamara FallacySarah is a eight year old gild and lives with her parents and four siblings in a make-shifthouse in North Jakarta. Her parents are jobless now, the father being a laid-off constructionworker. She has been taken out school. She earns for the family as a singing beggar in thestreets of Jakarta. One evening she comes back, exhausted from the days work. The parentspounce upon her. "How much have you earned?" She hands over the purse. She is tired andthirsty, but even her mother is busy counting the rupyiah and has no time to give her a glassof water. Her elder brother who by now is an adept pick-pocket picks up a thousand rupiyahand whistles out of the room. No doubt, the family still eats two meals of rice a day andsnacks of soya-cake. But are they poor? According to numeric professionals who measurepoverty by calorie intake, no. But any robust standard of living must include the perceptionof security in livelihood, the sense of freedom from harassment and abuse at home and atwork, the feeling of dignity in day-to-day transactions, the belief in reliability ofofficialdom, the expectation or lack of it that life will improve for ones off springs and so 45
  • 46. forth (Chambers, 1985). Is Sarah, the singing beggar poor? Or her brother who is a thief andhas quite often to grease the palms of the police? Or her dehumanized parents?These questions come to mind when one hears that the figure of 80 million Indonesiansbeing under the poverty line is being cut back by half to 40 million by the World Bank. Onerecalls what Adam Smith called the McNamara fallacy:"The first step is to measure whatever can be measured. This is o.k. as far as it goes. Thesecond step is to give that which cannot be measured an artificial quantitative value. This ismisleading.The third step is to disregard altogether what is not measurable. This is blindness.The fourth step is to say that whatever cannot be measured does not really exist. This issuicide."By fiddling with the definition of poverty Indonesia was able to report a phenomenal drop inpoverty from 70 million in 1970 to 22.6 million in 1996. The question, therefore, is shouldIndonesiacontinue to go the same route after the food and economic crisis or should itrethink fundamentally the direction of its development? "With the past 30 years of economicgrowth and social stability unraveling day-by-day." Indonesia has been offered a rarewindow of opportunity to change. Indonesia, to quote Curtis Runyan is in a holding patterntoday "between the stifling stability of Soharto era and the emerging political openness of acountry torn by the chaos of economic collapse and political reform." Years of developmentand poverty reduction are at risk writes the World Bank. What is at risk, perhaps, is thedominant paradigm of linear economic growth which must yield to an equitable allocation ofproperty and resources including knowledge and information for the freedom to live longand well by substantial parts of the Indonesian populace.2. El-mino an agricultural Production:A write-up of the Ministry of Food and Horticulture Affairs states:Rice production level of 1997 and 1998 decreased by 3,37% and 6.72% compared to theprevious year. The main reason for declining production has been the severed drought in1997 continuing to the early 1998 and also from a combination of serious farm-levelconstraints during the second season of 1998s planting season. Although rainfall during mid1998 was above normal and generally beneficial for crops in rainfed areas, higher humidityand cloud cover significantly increase the incidence of pest attacks, particularly of the brownplant hopper. More over, as devaluation has increased the cost of imported pesticidesseveralfold, very few farmers applied necessary pest control. Although the cost of urea andphosphate fertilizers to farmers was cushioned by government subsidies, only smallquantities of potassium chloride (KCI) were used as the price went up threefold. Lower use 46
  • 47. of KCI in particular not only reduced the physiological ability of plants of resist pest attacks,it also affected grain formation.The statement prima facie sounds logical. Crippling drought, brown plant-hoppers and theundernourished plants unable to resist pest attacks are identified as the villains of the piece.Is that the whole truth? Unfortunately the stagnation in production and productivity affectedthe agriculture sector long before the drought. Having achieved rice self-sufficiency fourteenyears ago, government policies in the past, particularly over the last 10 years ignored theagriculture sector in favour of high-tech industries and real estate. Public investment inagriculture declined to 15% of the budgetary allocation while the government fixed the priceof agricultural produce, particularly the main staple rice, way below the market price. Thefloor price for rice is now Rp. 1000/kg. While the traders price is three times more than that.Contrast that to the 300% increase in the cost of agricultural inputs.Let us take the case of fertilizer. Government, before the crisis, opted for dual pricing offertilizer, the higher one for the plantations and the subsidized one for the farmers. Whathappened was all but natural. Subsidized fertilizer flowed upstream to the power-holders -the plantation owners. Small farmers with half an hectare or less could not have access to thesame. Without necessary nutrients, the rice plants could not withstand the pest attacks.Recently subsidy has been withdrawn. The government has instead opted for low-interestcredit-availability of Rp. 5.5 trillion for the farmers. The question is : do the small farmershave access to such credit> The evidence is against such pious wish. Channeling of suchcredit through the cooperatives (KUD) has further reinforced the pre-existent syndrome ofgenteel elitist corruption. The farmers are burning meanwhile at both ends of the candle - theexorbitant input price on the one hand and the depressed procurement price for the produce,on the other.As for incidence of pests, particularly brown plant-hopper, the unusual drought or thehumidity and cloud-cover when the rains came, definitely exacerbated the situation.Surprisingly, however, farmers who practiced integrated pest management were better offthan those who used chemical pesticides indiscriminately. An important reason for the short-fall in rice-production during the drought has not been highlighted. That is, reduction incultivated acreage. To blame the crop-loss on high price of pesticides is to encourage thepesticide lobby against the farmers in Indonesia who have blazed a trail in integrated pestmanagement. The question is whether to follow the sustainable route of agriculturalproduction, or depend on unnecessary of harmful chemicals. What is at stake is horizontalorganization of agriculture rather than prescribing pre-packaged technologies. Generationalknowledge of the farmers needs to be coalesced with frontier science. Farmers areresearchers and farmers are experts. 47
  • 48. Field ReportDr. A.Z.M. Obaidullah Khan, the former director of the FAO Asia Pacific;Dhakka, Bangladesh, 8 Feb.1999.1. East Timor : Policies at Command.The World Banks annual economic survey reports: "No country in recent history, let alonethe size of Indonesia has suffered such a dramatic reversal of fortune". True, the economicand monetary crisis exacerbated by prolonged drought of 1997 & 1998 has hit the poor hard."More than 45 million" as Curtis Ryan of World Bank notes "cannot afford their daily rationof rice, the countrys staple. The soaring price of rice caused by shortages due to drought andthe higher price of imports is at the heart of much of the countrys current instability".According to Government estimate 80 million Indonesians, 40% percent of the countryspopulation subsist below the poverty line compared to the 22.6 million figure in 1996. Thecrisis is more visible in big cities like Jakarta, but concentrated in the countryside. An annualsurvey by the Bureau of statistics found that "the number of people working in agriculture inearly 1998 had increased by 15 percent to 42 million, while the number in industry,transportation and finances had dropped by 10 percent to 16 million". Many people arereturning to the countryside from the cities. "But with two consecutive seasons of poorharvest, there is a limit to how much the countryside can take".For the Timorese in East Timor the reversal of fortune started 22 years ego when Indonesiainvaded the erstwhile colony of Portugal and annexed it by brutal force. Farming families inthe valleys the mountains and the coastal plains have eaten bitterness ever since. Refugeespour into Dili and other cities. They are not ecological refugees. They are fleeing from brutalrepression, violence and quite often genocide.Cararas is a village in BKK district. In 1983, the occupation army killed all male adults andadolescents above the age 12. Women were spared, but the young ones, violated. It is awidows village. So is Laclo in Manatutu district. The women headed household withoutadequate labor-force continue to till the soil, but malnourished and racked by disease, asthey are, they can hardly obtain one meal a day. Their only implement being hand-hoes,prolonged drought has made the turning of the soil more difficult even when in 1998 rainscame early.There are other variations of such atrocities. Men in the family are often fugitives and hidein the mountains. The families that they leave behind are the victims of further military-repression. Others in the community are afraid to talk to them. The unfortunate victims thusbecome socially isolated and ostracized. Their children are debarred from attending schools.Even if they are sick, mothers are afraid to take them to government clinics manned byIndonesian doctors. When the crippling drought made even one meal a day an impossibilityfor some Fokupers, a womens organization working on the issues of violence against 48
  • 49. violence and reproductive health supported them with food and vitamins. This emergencysupport has been funded by Switzerland. No, they have never received any food-aid fromgovernment, nor have they been able to take advantage of subsidized rice sold by thegovernment under special Market Operation. Anyway given the fact that a family has to buy10 kg. (now 20 kg.) of such rice at 1000 rupiyah per kilo, it was impossible for them toaccess the marketed rice. Simply, they do not have the money or income to procure food,subsidized or not. So for them hunger season stretched on till the rains came. Even then,much of the fields remain barren. Men in the households are often scared to go to the fieldsbecause army or their crony-militia are everywhere. Out of 80,000 hectares of rice-fieldsonly 20000 hectares are under the plough now.Beside the terror unleashed by the army, there is the problem of farming implements.Malnourished and further weakened by malaria and tuberculosis, it is difficult for womenand men farmers to till the soil with hand-hoes only. The Silesian mission in Fuiloro helps1000 families in ploughing their fields with 7 tractors. This year, that is in the wet season of1998-99, rains came early. All the farming families were not ready. So may be 500 familiescould till the soil and sow. Incidentally rainy season is short, so tractors are essential toquickly prepare the land. Father Hose Battaparambil showed us a vast tract of 20000hectares of low land lying fallow. There is also a lake there which could irrigate the land if afew low-lift pump were available. This is in Asalinu area and if farmed can feed almost theentire Timorese population. The mission, during the difficult times provided 10 tons of cornsto two of the most severely affected villages.Similarly Father Locatellis mission in Famumaka is serving 15,000 people in 8 villages.Beside renting out tractors to the farming families. Father Locatelli is also providing supportfor supplementary irrigation with donated pumps.But Fakumaka or Asalinu in Los Palos are isolated pockets where humane compassion hasgiven back to the people some control over day to day life and human dignity. The broadscenario is that of a people who are not free to create their own life and environment, noteven free to speak their own language. Poverty, in the case of the rural Timorease, is not theconsequence of the vagaries of weather, nor of economic deprivations alone. It is anunnatural and demobilized state of existence in physical insecurity - an existence in politicalpowerlessness, cultural hopelessness and spiritual despair.The extent of physical deprivation can be illustrated by the case of a young mother in Fatuliavillage in Veni Lale. She used to come to the polyclinic run by sister Joe Anne and SisterAlma. Malnourished as she was she weighed only 29 kilos. She gave birth to a child andwithin a month had to go out to the farm to work. By the next month she died. Women in atypical family work harder than men. They cook, take care of children and perform thehousehold chores. They also have to work in field alongwith men, so that the families canhave at least one meal of rice a day. New born babies are weaned away from breast feedingwithin two months of birth. Mothers breast goes dry and the baby is given instead rice-water. Diorrhea is a killer-disease for children and the rate of infant mortality is 49
  • 50. unacceptably high. Children, who are fortunate to grow up to school age, have to walk for anhour to the school in the morning and without any food. When they come back home, theyare hungry and exhausted. When the mothers come to the polyclinic, they ask sister Almafor vitamins. Milk is expensive, vitamins are cheaper. Those who used to earn an income inVeni Lale or Wailale areas by selling banana-cakes in the local market cannot afford therun-away price of flour any more. The consequence is hunger and starvation.If they or the children are sick they do not go to the government polyclinics. The Indonesiandoctors treat them as less than human. Even if the doctor is there, they cannot afford to payfor medicines or injections which have to be bought from outside. No wonder that thepolyclinic run by the missionaries received 600 out patients in the month of January 1999,alone.Men who are ware-earners in construction-projects or in industries have been laid off. Thenumber of jobless in Dili is growing everyday. Is this due to the economic crisis alone? Yesand no. The fundamental structural dependency created over the period of more than twodecades of hegemonic oppression must be recognized. Indonesians at every layer ofgovernance and in the private sector have succeeded in securing for themselves a privilegedposition at the expense of the native Timorese through a process of subordination and in thename of security.Impressive physical infrastructure has been built up but the social cultural and spiritualinfrastructures have been systematically dismantled. The sense of belonging to a communityhas disintegrated. Even the social cohesion has been rent asunder by a policy of divide andrule. The pro-integration forces have been armed to the teeth to subdue the majorityTimorese. Now that the question of extended autonomy and of independence of East Timoris being negotiated under the U.N. auspices will that mean further internecine conflict? True,with legitimate territorial claim over off-shore oil-resources, East Timor can be a prosperousregion in the future. But in the immediate future will there be a vacuum?That question looms large. Because the cultural autonomy of East Timore has been seriouslyjeopardized. The Timorese cannot read and write in their own language, Tetum. Bhasha, analien language is the medium of education. So in spite of investment in public education, theyounger generation today is alienated from the knowledge power of a so-called superiorrace. The political and economic structure determining the ownership and allocation ofresources and the knowledge-structure determining the control and dissemination ofinformation have pervasive effects on all other structures of a society. Together they createand use culture, including normative codes and religious values, to define and legitimize thedominant minoritys particular concepts and practices of ownership and control, and the usesand reproduction of resources and knowledge. This complex interplay of political, economicand down-ward directed knowledge-power must be recognized to understand the nature anddynamics of deprivation. Hunger and poverty in East Timor represents not just cripplingdrought and economic recession but an exclusionary relationship of the Timorsese frominstitutional networks sufficient to maintain survival and self-esteem. As isolated entities, 50
  • 51. their societal background practices, cultural memory and common social meaning have beeninexorably eroded. A new set of meanings and institutions, distant from and alien to them,has disposed off many of their everyday knowledge and symbolic practices. The poormajority in East Timore are politically disenfranchised, economically excluded and sociallystigmatized. ---oo0oo--- Info (opinions and observations) Collected during Fact Finding Mission in NTT and East Timor Riza V. TjahjadiPlan InternationalImpact of the crisis, according to Plan International for NTT province, is not significant.After looking at the aid program that we have conducted we found it there is no real problemin food but rice crisis. The problem existing here is the government. always looking at thediet mainly on rice. After the rising price of fertilizer, El Nino and La Nina phenomenoncause production of rice decreasing. However in our area in Kupang and Sikka the foodcrisis is not existing.We got one grant from Ausaid totaling US$ 120.000 and we distribute food to our fosterfamilies. The aid distributed in form of rice and sugar. But what we found that the rice andaid that we extended to local people is not so supported for daily life. Its just effect only forcertain period improved the nutrition on one week or two weeks.There is no real impact on the aids. We realized since the monetary crisis there are someimpacts especially in urban areas but in rural areas especially in Sikka, the impact ispositive, actually because they rely on cacao and coffee and coconut. Production also good,especially for fiherfolk the price of fish are three folds. Impact of crisis of to local people isactually positive.So, in NTT, in Kupang and Sikka, I observed at least the working area there is no realimpact on the crisis. Because they merely rely to corn and tubers as their main diest.When observe the JPS or social safety net there are some constraints in the program becausethe aid extended to the local people, actually not stimulate empower the community for selfsufficient in food. Instead the aid extended as make them rely more depended on theassistance from the external resources. 51
  • 52. Another example, we are planning to provide some cattles the families, our foster families,our communities in 32 Villagers. Further we found that those villagers there are alreadysome programs run by the government. The government provides cattle.(...) = not clear recordedFor us, the government should think carefully about the social safety net and there is no realimpact. Probably for health, but for livelihood, I think some of them misleading.This is probably one of broad observations.There is no real crisis in food. But since the government introduces rice as the main diet thenthe problem begin. Probably coping mechanism from the local government to communitiesquite strong. They able to shift from rice to corn again. Some communities in the veryremote areas they already consumed rice. Since the crisis they need the fund.I think we made mistake by giving them food aid funded by Ausaid - only for six months.The relief is drought relief program.However, I think we just like spreading salt to the sea, because they dont needed. Becausethey can survive with available resources: corn and tubers, some of the traditionalvegetables.The team formulating the plan for this relief and they decided based on the actually need bythe people. They dont the poor, but the easiest way because of the budget. The most provideor extend the relief by giving them the rice. But actually we would like to provide them withcorn, as the main diet, but there is no corn here. Bulog, as the logistic agency does not havethe corn or maize in adequate size or the easiest food to be delivered or be purchased onlyrice.The team: Plan, community, and government for health. We have full freedom, not dictatedby the government. That why, we realize that we made a mistake and it was ..... give themsugar and rice. Because people do not really needed, but for the health insurance card itreally useful for them.We currently have 7400 foster families in 32 villages in Kupang, and 500 families in Sikkain Maumere. Plan International focuses the program on foster families. Foster families arethe poorest within the community.Plan International received from Ausaid US$ 92.569.89 for six months during June-October1998.Total disbursement fund from Ausaid.Rice 486,052 kg procured from Dolog NTT by UD SadarSugar 60,756.5 kg procured from Dolog and APETI, an association for sugar. 52
  • 53. KDS (health insurance card) 4,718 households was authorized by the provincial level ofhealth department.Transportation service carried out by CV Petety, UD Sama Jaya, PO Sasa, throughopen/public tender.Distribution supervision carried out by UBSP Sukamaju.Distribution controlled by volunteers at the sub-regency.Total aid 40 kg maximum, and sugar 5 kg, but depend on the working day.Source: Edy , Plan International in Kupang, 30 January 1999.NGOs ReflectionAround 14 NGOs, as part of member of Nusa Tenggara Timur (NTT) of the NGO forumhave share reflection on food aid, while total member of the forum around 32 NGOs. All 14NGOs have acted, but some still actively act as supervisor of the food aid in the province.Around 50% (6 NGOs) claimed source of crisis in Indonesia cause by agricultural policyexecuted by the New Order regime. During the last 32 years the GOI stresses to top-downpolicy or rice minded policy. Food policy oriented to rice, has had caused the GOIimplement subsidy/credit scheme, high yielding varieties, pesticides, chemical fertilizers,technology. This, as consequent, the farmer highly depended to it.Current rice aid to the communities has not solved root of the problem, claimed one ofNGOs. But agricultural policy that accommodates to farmers aspirations with localperspectives will give positive answer.Around 4 NGOs added rice aid to poor communities would cause laziness, spoil, andmaking depended to aid. They will lazy to plant their farmlands, forget that they are farmers.Even though in the farming communities there are expectation that rice aid will becontinuously given to them. More further, rice aid is also could destroy the existing localmarketing network.Two NGOs presumed rice aid in NTT are being sold to consumers at large with value at Rp1.000 per kg, therefore the poor people can not afford it. Other people who higher layer thatpoor people consumed it most. This indicated corruption, although it just small scale.Around three NGOs illustrated food for work, by improving the infrastructure like road,bridge, and other physical development, then it was paid with certain amount of rice.However, the NGOs suggest food for work should be directed to food production scheme,this will helpful.In the future food policy in Indonesia must be directed to food diversification, it should bealternative food to rice as complementary such as corn, sweet potatoes - perhaps in otherareas there sago, taro (yam), banana, cassava, beans, etc. This reflected by three NGOs, 53
  • 54. while the other three NGOs suggest to the application of farming with nature or organicfarming that laid to the local demand on food.It worthy to note from 14 written materials of reflection by NGOs, two are indirectlyexpressed their reflection, while one NGOs have difficulty to state a reflection.Source: Proceed from written reflection by NTT NGOs Forum at Inaboi Hotel, 29 January1999.Additional info:An NGO activist complains the difficulty to expand the agricultural work duringimplementing food for work. The activity is to expand farmland and rehabilitation of criticalland by regreening with perennial trees in Flores Island.However, these activities seem conflicting to almost similar activities but different system.He promotes organic agriculture, while another NGO, the so-called Fado promote herbicideapplication.Source: Alex at Inaboi Hotel 30 January 1999.Catholic Relief Service (CRS)The food aid channeling through emergency program covered NTT (East Nusa Tanggara),NTB (West Nusa Tenggara), and Lampung provinces with seven counterparts (local NGOs).Until 30 January 199 two shipments of rice aid have been received by CRS EmergencyProgram, while another shipment is waiting. All rice aid came from US with valuedUS$2,112,000 per shipment.Emergency Program broken down into community level activity popularly entitled Food ForWork (FFW) and supplemental food. This program targeted to 25,000 families or 125,000persons while supplemental food targeted to 21,000 under five children.FFW consisted of terracing development, land improvement, road construction, drainage,irrigation, and dam development and watercatchment management. Total activities reached2,507,600.50 man days with 4 units dam, 53,457.91 meters irrigation, 60,718.00 metersdrainage, 750,695.00 meters road construction, and while rice amounted 4,934,735.00 kg.Moreover, women workers reached at about 49.97 percent (for detail sees table).Roughly said, one household work for 20 days per month with compensation amounted 2.5kg of rice. However, maximum “payment” to each household is 50 kg of rice. 54
  • 55. Results of FFW, according CRS in Kupang, agricultural productivity increased, as well asinfrastructure capacity (road, dam, irrigation, etc.). Moreover, project coverage reach 225villages in 69 Kecamatan (sub-regency) in NTT, NTB and Lampung province.Problem faced during executing the emergency program:The second shipment of rice was looted at seaport of Dili East Timor on 11-12 December1998; the ship loaded two packages of rice aid, for Care in Dili and CRS in Kupang, but thefirst loaded off at seaport in Dili. Therefore CRS made additional shipment, but not receiveyet.Insect infestation to the most of rice. In the second shipment (the third shipment actual; seeabove) most of the rice infested by weevil. In Waingapu, for another example found 133bags of rice infested by weevil too.Another problem is to get quick the official claim or statement for rice qualification when itfound rotten and/or damage. It’s hard to get laboratory analysis statement to rice, meanwhileif it bring to other provincial health laboratory relatively expenses. One sample of rice if itbring to Bali Island, will be charged around US$ 75 per sample. This problem is remaining.At community level, there was overlapping area for food aid from different agencies alsoreported by CRS on October 1998. Four villages, all in one kabupaten (regency), foundreceived overlap aid from three agencies, while two agencies mostly overlap in 19 villages.From this identification found 73 villages that receiving food aid. CRS identified theinternational agencies are World Food Program, Ausaid, World Bank, DAN, GTZ, CCF,WVI (World Vision International) and other (mostly mentioned: Dept. F).However, once it found in village CRSs rice was substituted with lower quality, namelyberas OPK (low quality of rice for the special market operation). According to CRS, riceprice of this emergency program valued at Rp 4,195 (cost of freight and insurance) whilerice price of OPK only Rp 1,000.Source: CRS Reps in Kupang, 30 January 1999. 55
  • 56. FFW Report July-December 1998Counterpart Workers % Activity Women Terracing Land Road Drainage Irrigation Dam Water Man days Rice Workers Impro Const catch ha ha m m m Unit Unit KgLKB 53.00 0.00 93,250.00 57,450.00 19,500.00 1.00 0.00 379,352.50 1,067,450.00 24,174.00 1,376.50YSM 36.07 459.70 21,382.00 3,268.00 18,770.00 1.00 6.00 272,730.00 761,625.00 14,457.00 2.00YAPENSKAK 52.00 687.85 468,989.00 0.00 8,472.00 2.00 0.00 680,779.00 711,100.00 92,141.00 7,635.14YASSKA 51.00 3,650.75 0.00 0.00 6,715.31 0.00 0.00 568,940.00 925,850.00 24,189.00 391.82YKBST 54.75 2,019.85 18,874.00 0.00 0.00 0.00 0.00 130,461.00 265,262.50 9,117.00 98.56YTN 48.00 1,620.40 0.00 0.00 0.00 0.00 0.00 214,180.00 537,100.00 10,974.00 8,954.58PSE 55.00 1,385.06 148,200.00 0.00 0.00 0.00 0.00 261,158.00 666,347.50 27,571.00 0.00Total 49.97 6,922.96 750,695.00 60,718.00 53,45 7.81 4.00 6.00 2,507,600.50 4,934,735.00 202,623.00 18,458.60Source: CRS Emergency Program Report on FFW July-December 1998 56
  • 57. NTT Provincial GovernmentBriefing by Governor NTT Piet Alexander Tallo:Food Policy consists of several things. First, food security came from several aspects. Thatare, food availability in general, then food diversification locally, and quality of the food.Not just eat and drink. Dont just give low quality of rice ("hard taste of rice" or "goat classof rice"). And then, was stabilization of the food prices. This related with national policy forsocial safety net.Social safety net directed to accommodate productive of manpower such drop out fromschool, university and laid off workers. Then, to improve the weakness or low purchasingpower by community that cause by financial and economic crisis, and especially for NTT tohelp people/farmers/villager from impact of prolonged drought last year. Then, all activitiesfocus to labour intensive work. Other relates to SSN is to increase the people economic, inturn to increase purchasing power of community. People economic’, mostly lay to homeindustry and small scale industry.According Governor, godfatherism pattern or development strategy with conglomeratepatron-clientele approach is not success. Therefore, to empower small scale industry shoulddirected to empower the cooperative. He assumed the only way to eradicate the poor peopleis through development strategy to cooperative as economic development units. Cooperativeis one of instruments in the development of family economic. This has been proof by historyof Indonesia. Characters of cooperative and solidarity values have been exist within theIndonesian, based on religious aspects or within social institutions.Thats all related to food policy. Then, understanding to ecology and ecosystem of NusaTenggara Timur (NTT), also the climate. There three basic crops that driven to be cultivatedby NTT people. This three crops are locally specific. First, papaya, banana, and sweet potatois the first rank (while the head of Dolog starring at him..!). Orange came from WestSumatera. Then, secondly, the native crops are lontar, tamarind and coconut. Because ofcycle of season make heal the people or seems strong. The old generation used to drink"tuak". Third, was how to utilize the existing marine resources. The weakness of NTTpeople is low mentality to marine resources. Most dominant character of inlandcommunities.In the near future, the development strategy will be based on natural and human resources.Then, it will add with strengthening the institution and encourage pro-people management.For the agriculture, is utilize farm land properly to match local soil conditions, then watermanagement to relatively dry areas, high yield variety application (he expect NGOs will alsocontribute). Then, fertilizers, that is our problem. Then, how to make it clear the land forfarming area. 57
  • 58. NTT can be perceived into classification: Flores, Sumba and Timor and Alor. West part ofFlores and west part of Sumba and Timor are food production areas. Its impossible tocultivate sago on rice field.Then, east part of Sumba and west part of TTU and Belu are cattle or livestock productionareas. Ende, and Sikka is tradeable crops. Also marine resources surround NTT. He, then,ask to high rank officers in the province to motivate his idea to public at large.In sum, food policy in NTT, the governor claimed has set up 13 food security areas. Heexpects all related agencies in the province will translate into programmatic or technicalactivities covers husbandry, plantation and fisheries.Regarding to answer of Day-cha about the relation of Thai rice and NTT, he did notunderstand, but didnt want be translated. He, even, said rice aid if will come can be carriedout by NGO to NGO directly.He shared the information about the declining of rice productivity in IRRI.Source: Governor NTT, Piet Alexander Tallo. A meeting with Sub-team D. Kupang 30 Jan.1999.Statement by head of Dolog NTT, LumbangaolFirst, he asked about the quality of Thai rice with 25% broken. So, Day-cha of Thailand hasno choice but explained the rice situation in his country.He confused why the price of Vietnam rice lower than Thai rice although the quality ofVietnam rice better. Its about Rp 25. He, then revealed the difficulty to control rice marketin the province. The application of the ceiling price slightly disturb, its also affected to localprices of rice. More often Thai rice came than Vietnam, also the amount.The food aid managed by Dolog such as instructed by Bulog.Dolog NTT received the US rice as Japan aid totaling 10,000 tons. This rice does not allowdistributed (freely) for the civil servant, but for pre-welfare family through Operasi PasarKhusus (Special Market Operation) with Rp 1,000 per kg. This rice classified as allocationfor December 1998. Stock amounted 9,000 tons. Then, he would like to flood the market tolowering the local rice variety, namely Lonceng. Maximally, will equal with the US rice. Atthe market, US rice around Rp 3,250 maximum price.The problem, consumers just known Lonceng rice varieties. He, then, combine the marketwith several rice varieties.Source: Governor NTT, Piet Alexander Tallo. A meeting with Sub-team D. Kupang 30 Jan.1999. 58
  • 59. Tips: Dont forget to quote: land dispute of rice field by lowlander in east part of Kupang.East TimorIn brief there are phasing out of traditional farming system, especially on farm preparation inEast Timor. In small size rice fields, as long as observed there are two type techniquepractices. Fist by using a flock of water buffaloes and second by hand tractor to plough andaerating topsoil of rice field. It was shown even in part of rice fields the city of Dili andother smallest towns.But there is slightly different between Dili and its outsides in using water buffaloes. In kindof cash in Dili, while in the rural areas is share cropping.ManatotuPart of lowland in the areas, the army territorial unit, through AMP (ABRI ManunggalPertanian) is developing unutilized rice fields, which targeted reach 25 hectares. Thisdevelop by utilize simple irrigation from a big river, and applying hand tractor for fieldclearing and they will use high yield varieties of rice seed. It seems the best of rice field inthe areas.A native person in the army yang work in the field said each soldier get Rp 7,500 per day ascompensation. He added most of the army had granted 10 kg of rice and 2 kg of sugar suchas classified prewelfare program (social safety net). The aid granted from Singaporegovernment.LaleiaAnother illustration of dual systems of farm preparation was in part of lowland of north costof East Timor Island. One of rice field areas along road side of Laleia shown a traditionalstumping technique by a flock of water buffalo was still faster compare to rotary hand-typetractor, although amount of manpower is the same. That is three persons, while the waterbuffalo around 15..According to farmers work in the dual system techniques, water buffaloes application isfaster compare to hand tractor. In a day it can achieved two plots by traditional techniquecompare a plot by hand tractor (perhaps still in the learning process). Moreover cost for rentof hand tractor amounted Rp 200,000 while traditional technique is share cropping withfifty-fifty. But the most important thing community values of farmer are still maintaining bywater buffaloes.AileuIn rice retailer shop in a market found Thailand and Vietnam rice with 25% broken. A sackwith 50 kg of Thailand rice sold with three prices, Rp 1,500 for a medium can of margarinecan, and Rp 2,000 milk can size, and a small sack for higher quality of Thailand rice is sold 59
  • 60. with Rp 43,000. A sack of Thailand rice bought from canvas car with around Rp 117,000 toRp 120,000, while a sack of Vietnam rice with 12 kg sold with Rp 40,000.Food sources:Rice, traditional diet such as corn and sweet potatoes for the most East Timorese, andcassava for fisher families from South Sulawesi (observed at Laleia areas).Additional Info for West Jawa1. Village 1. Legonkulon 4. Pangarengan 2. Legonwetan 5. Tegalurung 3. Mayangan 6. Karangmulya 7. Bobos2. Population 20.111 person3. Ricefield 2.192 ha4. Peasant (farmer w/ share cropping 3.160 person; average land for rice System) cultivation 0,69 ha5. Irrigation system Technical non-technical 2.045 ha 147 ha6. Planting season 2 times in a year7. Rice variety 1. IR-64 3. Sticky rice 2. Cirata 4. Muncul8. Yield in 1 ha 35 quintal9. Unhusked rice price per quintal 1. Common Rp 190.000 (with optimistic calculation) 2. Government Rp 150.00010. Production costs per 1 ha per Rp 1.120.000 planting season (1US$ Rp 8.800)Source: YKD, 28 January 1999.Production costsThe following is production costs for one planting season, based recalculation andverification by the Fact Finding team and farmers and the agricultural extension workers(PPL), and local host (Mr. Moech. Mansur of Yayasan Kesejahteraan Darussalam)Production costs for rice cultivation on 1 hectare rice field1. Land preparation/ hand tractor Rp 330.0002. Transplanting Rp 180.0003. Seed of paddy 75 kg @ Rp 3.000 75.0004. Fertilizer: a. Urea 200 kg @ Rp 1150 230.000 b. SP36 150 kg @ Rp 1600 240.000 60
  • 61. c. KCL 75 kg @ Rp 1800 135.000 d. ZA 100 kg @ Rp 1.000 100.0005. PPC/ZPT 2 lt @ Rp 20.000 40.0006. Pesticide 4 lt. @ Rp 33.000 132.0007. Labor: a. Dyke making 150.000 b. Weeding 240.000 ------------------- + Total Rp 1.852.000BULOG, HQ JakartaInterviewed BULOGPada tanggal 8 Februari 1999 Southeast Asian Food Security and Fair Trade mengadakanpertemuan dengan Badan Urusan Logistik (Bulog) di Jakarta. Dalam hal itu Bulog diwakiliMohammad Amin, Deputi Pengadaan Beras dan DR. Ir. P. Suharno, MSc, Kepala PusatPenelitian dan Pengembangan. Sedangkan Dewan Keamanan Pangan diwakili oleh RizaTjahjadi (PAN Indonesia), Po Li Kheng (Executive Secretary SAFS-FT) dan BagongSuyoto (petani Lampung dan aktivis PAN Indonesia).Menurut Mohamad Amin, penyebab krisis pangan di Indonesia disebabkan pertama, olehadanya kemarau yang panjang. Kedua, adanya krisis ekonomi, yang menyebabkan jatuhnyanilai rupiah. Dampaknya adalah terjadi kondisi sosial yang semakin memburuk. Akibatkemarau panjang itu, Indonesia kekuarangan pangan, dan melakukan impor beras dariberbagai negara. Pada tahun 1998 impor beras sekitar 4,1-4,5 juta ton dari sejumlah negara.Mohammad Amin mengatakan, pada saat Bulog mengadakan pertemuan dengan IMF danWorld Bank, bahwa bantuan yang diberikan itu dapat mematikan. Ia membenarkan bukuberjudul “The Killing Aid”. Bantuan pangan seperti beras dapat membunuh aktivitaspenduduk, membuat orang malas. Seharusnya bantuan itu dapat mendorong orang bekerjaagar dapat membatu dirinya sendiri (self-help).Mengenai krisis di Indonesia, setiap daerah kondisinya tidak sama. Contoh daerahTasikmalaya, di situ terdapat banyak usaha kerajinan rumah tangga, mempekerjakan banyaktenaga, dan produk-produknya diekspor ke luar negeri. Contoh lain untuk mendapatkan uangdi masa krisis ekonomi ini, seperti Pak Harno (yang mendampingi Mohmammad Amin)memiliki usaha perikanan/tambak ikan lele (Hito fish). Untuk memelihara ikan itumembutuhkan pakan yang harganya hanya Rp 250/kg. Pakan ikan itu diramu sendiri.Kegiatan-kegiatan usaha kecil ini dapat dikelola guna mendapatkan uang, dimana ikan leletersebut dipasarkan ke kota. Bagaimana caranya usaha-usaha kecil itu dikelola agarmenghasilkan keuntungan? 61
  • 62. Bagaimana usaha-usaha itu dapat dijalankan secara baik, harus didiperhatikan polapemasaran (marketing), pengorganisaian, kompetisi. Juga bagaimana dengan pakagingbarang dan pola penjualannya. Usaha kerajinan di Tasikmalaya, dan tambak ikan lele diPondok Gede tersebut, yang menjadi masalah utama adalah uang/modal dan pemasaran. Bilausaha itu dapat dikelola dengan baik akan dapat menghasilkan Rp 2 juta/bulan atau lebih,seperti yang diusahakan Pak Harno, yang masih merupakan usaha percobaan.Dalam krisis pangan ini Indonesia telah mendapat bantuan dari sejumlah negara, sepertiAustralia. Bantuan itu sifatnya sementara, tetapi bagi Indonesia bantuan itu sangat penting.Bulog sebagai lembaga pemerintah, yang ikut serta menangani masalah bantuan pangan,mengharapkan agar semuanya berjalan secara harmonis dan dengan tanggung jawab yangsama. Fungsi Bulog sendiri adalah menjaga stabilitas harga dalam pembagian beras secaramemadai. Fungsi Bulog sangat penting sebab Indonesia merupakan negara pertanian.Pemerintah telah melakukan operasi pasar khusus (OPK) untuk golongan keluarga Pra-Sejahtera dengan harga Rp 1.000/kg. Kita berpikir bagaimana petani kecil bisa mendapatkanberas di masa krisis ini. Ini merupakan program “kotak pengaman” (safety box). Dalam halini Bulog telah mengadakan diskusi dalam komite penanganan bantuan beras seperti MenteriPangan dan Hortikultura, Menteri Pertanian, Menteri Sosial, Bappenas, dll.Berdasarkan penetapan pemerintah, yang mendapt subsidi beras itu berasal dari golongankeluarga pra-sejahtera dan KS I? Kasus yang terjadi di sejumlah daerah di Lampung, banyakorang kaya (bukan kerluaga pra-sejahtera) juga minta beras? Sedangkan di dearal lainseperti Nusa Tenggara Timur (NTT) ada beras bantuan yang dijual kepada masyarakatumum dengan harga Rp 1.000/kg, sedangkan penduduk miskin yang berhak menerima jatahtidak kebagian? Menanggapi kasus ini Deputi Pengadaan Beras itu mengatakan, yangdiutamakan adalah golongan keluarga pra-sejahtera dulu, pada pembagian pertama 10kg/keluarga dan selanjutnya menjadi 20 kg/keluarga. Bila ada orang kaya yang mintabagian atau jatah beras itu dikembalikn kepada aparat desa/di daerah itu. “Mestinya orangkaya yang meminta jatah orang miskin itu malu … Ini menyangkut masalah moral,tandasnya.Bagaimana peranan Bulog di Timor-Timur? Pertanyaan ini diajukan oleh wakil Dewanberkaitan dengan pengumuman pemerintah BJ. Habibie belum lama ini akan diberikannyaotonomi yang seluas-luasnya atau pilihan terakhir meredeka bagi Timor Timur. MohammadAmin menyatakan, keputusannya tergantung pada keputusan rakyat, apakah dihapus atautidak. Yang dimaksud Mohammad Amin, adalah keputusan Majelis Permusyawatan Rakyat(MPR RI). Bulog merupakan lembaga pemerintah bukan lembaga swasta. Masalah TimorTimur merupakan masalah yang sedang dibicarakan dalam waktu transisi ini.Masalah pangan merupakan masalah yang sangat penting, baik dilihat dari aspek sosial,politik bik di Indonesia maupun negara lain. Untuk masa depan kita harus kembali kebelakang, yaitu kebijakan pertanian harus diutamakan sedang sektor industri berada di 62
  • 63. belakangnya. Karena sektor pertanian merupakan kunci keberhasilan untuk mendapatkanuang.Pada bulan Februari/April 1999 di Sumatera, Kalimantan, dan Sulawesi akan panen padi.Biasanya pada saat panen harga akan lebih rendah, tetapi sekarang harga beras lebih tinggi.Pada bulan-bulan ini hujan terus datang, dan ratusan hektar tanaman padi di Jawa Barattergenang air, dan lainnya diserang hama. Dalam hal ini pemerintah berusahamenanggulangi bahaya banjir, dan sekarang, kata Mohammad Amin tanaman padi sudahbesar, genangan air itu belum membahayakan. Sedangkan hama penyakit, seperti seranggadapat dikendalikan dengan penggunaan pestisida. Menurutnya, pola pengendalian hamaterpadu (PHT) tidak semata-mata atau sama sekali tidak menggunakan pestisida, sepertipemikiran yang ideal. Atau bukan berarti anti pestisida. Pestisida tetap digunakan secaraefektif.Jakarta, 10 Februari 1999BULOGRice status managed by Bulog Year Domestic Imported Total distribution Stock by end of Selling Procurement month Price (ton) (ton) (ton) Average (ton) Average (Rp/kg) 1983 963.129 1.154.928 2.244.369 1.367.963 300.50 1984 2.504.768 375.158 1.723.763 2.399.111 325.42 1985 2.030.478 0 2.024.125 2.940.792 318.48 1986 1.509.322 0 1.949.991 2.499.710 343.75 1987 1.358.745 119.950 1.966.538 2.109.546 383.66 1988 1.334.448 0 2.132.849 1.103.890 465.82 1989 2.577.265 464.449 1.685.952 1.863.924 493.00 1990 1.270.455 29.839 1.800.127 1.764.770 518.69 1991 1.430.339 178.880 2.075.723 1.277.696 557.84 1992 2.564.913 634.217 1.920.395 1.942.606 603.68 1993 1.963.175 0 1.964.849 2.125.202 592.25 1994 938.347 876.240 2.766.379 856.110 660.37 1995 922.980 3.014.204 2.660.222 1.066.540 776.38 1996 1.431.053 1.090.258 2.319.750 2.517.359 880.00 1997 1.948.811 523.626 3.150.781 2.510.635 1,064.03 1998 249.078 5.782.926 5.192.364 1.888.445 2,099.71 1999 3.248 610.000 331.238 2.528.861 2,803.81Source: Proceed from several Primary Data prepared by Rodiawat Bulog 1999.Report on urban slum in south Jakarta also available in Bahasa Indonesia ---oo0oo--- 63
  • 64. Bantuan Pangan Dalam perspektif Hibah dan HutangCatatan untuk Advokasi Infid, International Forum on Indonesia Development (sebagian, update dari Draft Report on Food Crisis in Indonesia) dipersiapkan oleh PAN (Pesticide Action Network) Indonesia since 1982 Rasa ketidakamanan memiliki beras, dan juga, minyak goreng dalam masa menjelangpemilu muncul kembali pada golongan yang mampu berbelanja ke pasar-pasar swalayan.Main borong, terulang kembali, sebagaimana nyaris setahun silam, meskipun berbedasituasinya penyebabnya. Tetapi rasa panik mudah hinggap di kalangan masyarakat kota. Perilaku ini menunjukkan betapa masyarakat Indonesia sedemikian kuatnyamengkonsumsi beras (nasi) dibandingkan bahan pangan lainnya, terlebih-lebih persepsibahwa cheap food price policy masih akan dipertahankan sejak diberlakukan pada masaOrde Baru. Ketika musim kemarau panjang tahun 1997 hingga 1998 yang menyebabkan berkurangnyaproduksi beras nasional. Lalu, berkembang istilah krisis pangan yang pada tataraninternasional menunjukkan betapa mengerikan citra rawan pangan di Indonesia.. The food crisis in Indonesia has reached proportions calamitous enough to make headline news in all the major world newspapers. At the heart of the crisis lie several factors: the Rupiah had devalued by almost 500% in less than a year; the El Nino drought has caused a severe decrease in rice yields; ethnic tensions have pit producers against millers and retailers; soaring rice prices have caused looting in warehouses and shops, and even the stealing of paddy directly from the rice fields and, finally, the channels of the newly fallen Suharto regime are still suspected to hold tremendous influence in the incumbent President Habibies government. As a result, production, distribution and trade mechanisms for food have been struck asunder. The horrifying reality is that the Indonesian government has announced that 17 million households or approximately 89 million people will go hungry1 And that in this year itself, Indonesia would need to import 5.1 million tonnes of rice – a quarter of the worlds trade.2 Is there enough rice available on the world market? (SEA FS&FT, 1998) 1 Indonesias agony and the price of rice: Tensions rise as a country with 200 million peopleferments over growing hardship and rising prices, The Economist, p. 31-32. 2 Ibid. 64
  • 65. Bagaimana asal muasalnya kebutuhan beras tambahan beras bagi Indonesia merupakansuatu debat tersendiri. Methodological mistakes Early in April 1998, the World Food Programme (WFP), in conjunction with the Food and Agriculture Organisation of the United Nations (FAO), released a food and crop assessment based on statistics provided by the Indonesian agency BULOG. This assessment, which proved to be critical in triggering the flow of aid to Indonesia, concluded that Indonesia needed to import about 3.4 million tons of rice in 1998. A few months later, in October 1998, the two agencies revised their estimate to a higher figure of 5.14 million tons. But the joint assessment projections were contradicted by the FAOs independent projections. According to A.W. Jalil, the resident representative of the agency, their first assessment in April had a much higher figure of 5.6 million tons, but a second assessment conducted in September revised import requirements significantly downward to 3.2 million tons. Indeed, Dr. Elmar Mueller, Senior Food Security economist of the FAO based in Bangkok, disputed the joint WFP-FAO October reestimate of 5.14 million, saying it was based on the wrong methodology, and that the actual estimated shortage that needed to be imported was 840,000 tons. 3 But even more serious was the quality of government statistics (produced by BULOG, the National Logistics Agency), on which the joint WFP-FAO assessment was based. Pada sisi lain FAO telah pula memberikan peringatan keliru. False alarm attracts massive food aid In any event, the April WFP-FAO figure raised the international alarm about impending starvation, calling for 2 million of the 3.4 million tons to be filled by international aid. Having closed its office in 1995, the WFP had been requested by the Indonesian government to reopen it eighteen months later. It then coordinated much of the relief effort, which went into motion as governments earmarked food assistance to Indonesia. Several countries pledged to provide Indonesia with rice. Japan pledged to supply 500,000 tons of rice in soft loans and 100,000 tons as a grant. Taiwan promised to sell 200,000 tons, China 250,000 tons and Vietnam 10,000 tons, while Thailand declared that it would donate 5,000 tons. The US agreed to grant 12,000 tons of rice and sell 300,000 tons. The Singapore government provided S$12 million worth of humanitarian assistance (grant) in rice and medicines. Tak mengherankan, berkembang skema bantuan pangan, yang berupa pengadaan hibahpangan maupun pembelian beras dengan memakai pinjaman lunak (soft loan). Beberapanegara, karenanya menyatakan bantuan pangan bagi Indonesia. Bahkan Kantor PBB untukProgram Pangan (WFP) yang sudah tutup tahun 1995 pun dibuka kembali tahun silam.Kenapa? Karena dorongan donor..! Siapakah mereka? Pemerintah dan ornop dari Australia, 3 65
  • 66. Amerika Serikat, Jepang, Jerman, Perancis, dan Norwedia (Clarke, 1999). Apakah besarmakna dari datangnya WFP? Hibah pangan (food aid) menurut Philip Clarke tidaklah besar,hanya sekitar satu (1) persen dari pengadaan pangan nasional (Clarke, 1999). Total amount of food aid received by Indonesia in the fiscal year 1998/99 (April to May) is less than 250,000 MT and in a country with a consumption of around 30 million MT of rice, this means less than 1% (Clarke, 10/03/99) Pengadaan pembelian beras dari luar negri, secara berhutang (soft loan) diwarnai denganpolitik penjualan dengan kredit jangka panjang dari Jepang. It soon became evident, however, that the aid being committed was a channel through which the donor countries also sought to advance their political and economic interests. In the case of the Japanese government, clearly as important as the humanitarian mission was the desire to dump excess stocks of rice that had become politically problematic. In the July 1998 issue of the International Development Journal, 4 Nagasawa Takaki showed how the provision of Japanese food aid was used pushed by the ruling Liberal Democratic Party (LDP) in order to serve as an outlet for excessive rice stocks in the possession of the Ministry of Agriculture, Forestry and Fisheries (MAFF). Owing to two years of good harvest, the MAFF had had excess rice stocks of 4 million tons. Disposing these, however, faced two barriers: First, part of the excessive stocks included rice imported by the Ministry of Agriculture under GATT Agreements. This rice has been stockpiled due to stagnant domestic demand. But the Japanese faced strong pressure from the US to import more rice, and importing without disposing of the excess rice would merely compound the problem. The second problem was an internal rule that requires Japanese rice to be sold at internationally competitive prices (the international price of Thai rice is about 40,000 yen/ton while Japanese rice is as high as 300,000 yen/ton). To overcome these two barriers, the new mechanism formed was the category of "emergency food aid" whereby the rice is "loaned." It was under these conditions of a repayable loan, in cash, at globally competitive prices that the aid was given to Indonesia. In the case of Singapore, its rice was specifically earmarked for the military—no doubt part of the island countrys effort to conciliate Indonesia, whose president had accused it of not having a constructive attitude towards its neighbors during the financial crisis. (Marco—footnote) As for the United States, it saw aid as a way to dump wheat into the Indonesia, thus opening up a previously unexploited market. Dalam hal hibah gandum, terselubung persaingan dagang Canada questions US motive in Indonesia wheat aid 4 LK—need reference 66
  • 67. WINNIPEG, July 20 (Reuters) - The Canadian Wheat Board (CWB) on Monday accused the United States of moving in on the Indonesian wheat market, after President Bill Clintons announcement of food aid donations to the Asian country. Clinton said on Saturday the U.S. would buy 80 million bushels or $250 million worth of surplus wheat, and donate it to hungry countries to help shore up falling U.S. crop prices. "Indonesia is our seventh largest customer overall, said Brian White, head of the CWBs market analysis group. ``Its part of their (U.S.) concern to regain the market share. White said Indonesia had been a recipient of U.S. food aid in the 1970s but since then had become a commercial customer, with Canada and Australia as the major sellers. Clinton said on Saturday the U.S. wheat would be given to Ethiopia, Sudan, Eritrea, North Korea and Indonesia which, because of domestic crises, could not feed themselves. "I dont know if I would necessarily put Indonesia into the same category of those other countries in terms of need, White said. Indonesia is one of several countries to have fallen victim to last years Asian financial crisis. "I think its laudable to provide food aid, White said. ``I think we should be realistic whether theres more than one agenda. The European Union on Monday also criticized the U.S. for the move, saying food aid should not have been driven by a desire to prop up falling U.S. prices. Clinton said the donation could boost depressed wheat prices by as much as 13 cents per bushel. "From the point of view of Canadian wheat farmers, if it does bolster wheat prices, thats positive, White said. Bantuan pangan pada akhirnya kembali ke kota (wilayah urban). Akhir Januari 1999WFP menyatakan bahwa terlihat potensi kecukupan atau liatnya masyarakat desa terhadapgoncangan/ fluktuasi beras dibandingkan masyarakat di perkotaan. Karenanya, pemerintahbersama dengan WFP melakukan pentargetan-ulang (retargetted) ke wilayah kota. BulanJuli 1999 hingga April 200 program hibah pangan akan dilaksanakan. Ini menunjukkan pula,bahwa masa pemilu diupayakan tidak tergelincir ke dalam money politic. Pada sisi lain, panen padi pada pertengahan Februari hingga April 1999 punmempengaruhi kebijakan untuk menghentikan sementara impor beras, sebagaimanadiucapkan Menteri Pangan dan Hortikultura Maret silam. (...) The minister also reiterated that the government has stopped rice imports from March through May as the country has entered harvest season during the three-month period. "Until May there will be no transactions for rice imports. Private sectors are also banned to do it [the importation]," Saefuddin said. Saefuddin said Indonesia is expected to have a 2.9 million ton rice deficit in 1999. Rice production in 1998/1999 is expected at 29 million tons, while the demand could reach 31 million tons. However, the production could be higher as farmers until next May will only harvest 50% of their fields.—Antara (12 March 1999). 67
  • 68. Data from the ministry show that as of March, Bulog warehouses have 540,608 tons ofsugar, 2.53 million tons of rice and 444,438 tons of wheat flour in stock (Ind. Observer, 3May 1999). Seberapa besarkah kebutuhan beras pada tahun 1999 ini? FAO/WFP menyatakan /99 UN: RI to import 3.1m tons of rice TOKYO — Indonesia will need to import 3.1 million tons of rice within the next 12 months because of damage caused to its rice crop, the UN Food and Agriculture Organization (FAO) said in a report released yesterday. The report, based on a survey in March, said the rice harvest in Indonesia in 1999 is expected to be good as there has been plenty of rain, but because of an extended period of drought since 1997, the rice-planting area will be reduced somewhat. As a result, total rice output is expected to decline 0.39% to 48.66 million tons, roughly 3.10 million tons short of the 52 million tons projected by the government. Although the import amount is about half that of fiscal 1998 ended last March 31, when the rice harvest suffered a series of blows because of El Nino and other weather hazards, so far, only about 1.30 million tons of imports have been ensured through rice aid programs, the FAO said. The FAO urged the international community to provide additional rice aid to Indonesia to ensure the poor will not be deprived of food. The agency also said in the report that rising crime rate and hikes in rice prices remain serious problems in Indonesia. Though farm wages have risen 20 to 40% during the nine months from December 1997 to August 1998, consumer prices climbed 81% during the same period. The declining purchasing power became a major factor in causing a food crisis in Indonesia, and an increasing number of people has been unable to purchase food because of the rice shortage, the FAO said. The survey was conducted in conjunction with the World Food Program, another UN agency, during a 10-day field research March 15-24, the FAO said. — Kyodo (21 April 1999) Dalam estimasi awal WFP akan menyalurkan bantuan beras sebesar 160.000 ton,gandum 150.000 ton dan belended food 17.000 ton. Bantuan ini terbesar dibandingkandengan CRS, 25.233 ton beras dan World Vision sebesar 11.033 ton beras. Tetapi bantuanmelalui WFP itu lebih kecil dibandingkan kredit lunak Jepang sebesar 400.000 ton. Totalbantuan beras 596.266 ton (lebih lengkap lihat Tabel 5, dalam Special Report, FAO/WFPCrop and Food Supply Assessment Mission to Indonesia, 1999). Bagaimanakah WFP bekerja mempertajam target untuk periode Juli 1999 hingga April2000? WFP melakukan sendiri pendataan. Mengapa? Data mengenai jumlah orang miskin,yang diterbitkan oleh Bank Dunia, BPS ataupun BKKBN saling beda. Berapa jumlahnyatarget, bagaimana WFP menetapkan besaran orang miskin, sebagai target programnya,hendaknya disimak dalam beberapa waktu mendatang. Catatan dari Fact Finding Mission secara khusus terhadap Bank Dunia: 68
  • 69. During our time in Jakarta, we were told that the World Bank would cut back by half the official figure of 80 million Indonesians currently living under the poverty line. By fiddling with the definition of poverty, Indonesia was able to report a phenomenal drop in poverty from 70 million in 1970 to 22.6 million in 1996. Societal stability has been unraveling with the past 30 years of economic growth. What the Banks motivations are unclear. What is certain is that this latest statistical barrage will not add to its credibility (Final Draft, 1999).Agenda kerja advokasi Fact Finding Mission dilakukan oleh SEA FS & FT ketika tanaman padi menjelang siappanen, namun situasi petani tidak benar-benar terekam secara faktual dan mendetil. Padahaldua minggu berikutnya, bermunculan kasus-kasus tidak siapnya instrumen pembeli gabahpadi petani oleh pihak Bank Indonesia (BI). Malahan BI menunggu keputusan departemenkeuangan, dan sebagainya, hingga ketidaksiapan BRI. Hari-hari berikutnya, giliran munculkabar di berbagai tempat bahwa petani terpaksa menjual gabah padinya di bawah hargadasar yang ditetapkan oleh pemerintah. Keterlambatan pemerintah membeli merupakan hal baru dalam 32 tahun terakhir ini.Namun, petani yang menerima harga jauh di bawah harga dasar merupakan kenyataan yangberulang nyaris setiap tahun. Pola dan kebijakan intervensi pemerintah untuk menciptakancheap rice policy, ternyata malah tidak pernah membahagiakan petani, dan pada sisi lainmemperlihatkan buruknya administrasi maupun skandal-skandal di kalangan Bulog. Karena itu, secara retorik, pemberdayaan terhadap posisi tawar petani di era bebas (bebasimpor dan ekspor beras) menjadi sangat penting, khususnya bagi ornop (dan koalisinya)yang bekerja di pedesaan maupun pertanian. Jaring pasar-pasar alternatif secara parsialsudah dan akan terus dibangun oleh ornop dan kelompok tani di berbagai tempat, namunpembesaran skala merupakan agenda yang berjangka menengah dan panjang. PenegakanHak Petani (Farmers Rights) sebagai salah satu unsur HAM di perundangan nasionalmerupakan agenda kerja yang sangat spesifik untuk diberlanjutkan. Khusus mengenai profil perdagangan beras di Indonesia sedang diteliti dan akan selesaidibukukan - diterbitkan oleh SEA FS & FT Council - sebagai bagian dari perdagangan berasdi Asia Tenggara akhir 1999. Survei awal telah dipublikasikan oleh PAN Indonesia(Terompet No. 21/V/1999).Pada jangka segera, perlu dikembangkan strategi untuk:1. Mendorong negara/organisasi donor untuk mendudukkan masalah pangan di Indonesiasebagai food affordability, sebagai acuan utamanya kepada mass media barat, danmendiskusikan dengan ornop (Infid) mengenai strategi dan metodologi kerja pelaksanaan 69
  • 70. hibah pangan di wilayah urban untuk periode Juli 1999 hingga April 2000, kepadaornop/lsm.2. Pembagian kerja, atau identifikasi terhadap ornop/lsm untuk melakukan pemantauanterhadap hibah pangan yang sedang dan akan tiba.3. Mendesak kepada negara/organisasi donor untuk mengagendakan bantuan untuk risetterapan yang berfokus kepada strategi dan ujicoba/kampanye pengembangan potensi pangannon-beras di Indonesia.Jakarta, 11 Mei 1999. _________________________ RujukanClarke, P. the head of the World Food Program (WFP) Mission. Personal Communication.Jakarta, 10 May 1999.Clarke, P. Comments on your summary. e-mail to Ms. Poh Li Kheng. 10/03/99.SEA Council on Food Security and Fair Trade.The Food Crisis in Indonesia. A ProjectProposal.FAO/WFP Crop and Food Supply Assessment Mission to Indonesia, 1999. Special Report. Attachment ___________________________ PetikanDraft-Final Report EXECUTIVE SUMMARYThe foregoing account could well have been filed on the current situation in Indonesia.Despite widespread reports to the contrary, there does not exist a famine or a food crisis in atraditional sense. This is the firm conclusion of an investigating mission that visited Indonesia in late 70
  • 71. January and early February 1999 under the sponsorship of the Southeast Asia Food Security and FairTrade Council (referred to as the Council).The 16-member mission visited several sites in Jakarta, then fanned out to other parts of thearchipelago. They focused on data gathering at the micro or community level through semi-structured interviews with the urban poor, farmers, small rural tradespeople, fisherfolk, governmentofficials, various church groups, non-governmental organizations (NGOs), and relief organizations.Correlation of micro data with macro-data yielded the main conclusion that the so-called "foodcrisis" stemmed from what was initially mistaken projections of rice output, which were thenmanipulated by certain forces within the country to consolidate their political position, with aidagencies acting as witting or unwitting accomplices.The critical steps in this manufactured crisis are the following:1. A key agency, the Food and Agricultural Organization (FAO), projects a massive food shortfall following a survey using questionable methods.2. On the basis of this projection, the government issues an international call for food aid, which leads to its becoming the worlds top recipient for food aid in 1998.3. The drought-caused famine projected by the FAO does not materialize, but food aid is retargetted by the government and aid agencies like the World Food Program from the countryside to the cities, to pacify people who have been laid off as a result of the financial fiasco caused by the government and International Monetary Funds macroeconomic policies. As one consultant to a key agency told our team members, "Hungry people are angry people."4. The government then uses the aid not only for social pacification but as mechanism to gather and consolidate electoral support for the June 1999 elections.This is not to say that economic conditions in Indonesia are not bad. They are, but these conditionsdo not call for food aid. They call for economic policies that will provide jobs and income forpeople that will enable them to eat consistently and have an adequate diet, and buy goods andservices to meet their other needs. Aside from serving questionable political ends, food aid in thiscontext can only serve as a band-aid solution to a larger structural problem.That problem has two dimensions, a short-term one and a long-term one. In the short term, the crisisstemmed from the massive loss of confidence among foreign speculative investors. This led to ahemorrhage of capital that triggered the collapse of most of the countrys financial institutions and agreat many of its key corporations. This short-term crisis, however, has its roots in a developmentmodel imposed on the country over the last three decades by the Suharto dictatorship and the WorldBank. The elements of this model, which has been unravelling in spectacular fashion in the last twoyears, were:1. development based on foreign capital and foreign markets;2. an industry first policy, or a strategy that subordinated agriculture to industrial priorities; and3. within agriculture, the implementation of a Green Revolution-based riskiculture. 71
  • 72. Agriculture is in trouble in Indonesia, but it is a crisis that is strictly man-made, not one that stemsfrom drought. Tremendous dependence on fertilizers and other chemical inputs characteristic ofGreen Revolution technology has resulted in a fragile agro-technology that can easily be unravelledby policy decisions like the ending of the fertilizer subsidy. Pushing rice as the staple crop, at theexpense of other crops even in regions that formerly consumed non-rice staples, has ended up withan equally fragile dietary dependence that leads to dire consequences under conditions of riceshortage.Indonesia is not experiencing a classical crisis of hunger. It is experiencing a man-made economiccollapse. What its people need is not food aid but economic reforms of a fundamental kind that willcreate the jobs and income that will enable them to surmount not only hunger but poverty.Indonesias problems are not conjunctural but structural. INTRODUCTIONReports of famine and hunger coming out of Indonesia have alarmed the world in the course of 1998.Coming on top of the grave economic and political crisis being experienced by the country, this newshas naturally elicited grave concern, especially in Southeast Asia. Humanitarian considerations havecertainly been uppermost, but also a source of great worry was the international impact, since inresponse to the crisis, Indonesia needed to import more than 25 per cent of the rice available in theworld market in 1999.In recent months, however, news has filtered out contradicting the official picture. The worry abouta famine was said to be greatly exaggerated. Many agricultural communities were said to beprospering in the midst of crisis. Indeed, the inflow of food aid that began in late 1998 elicitedprotests, including a refusal by one of the largest NGOs in Solo, Java, of requests from some donorsto distribute milk powder.5As more conflicting reports emerged, so did many questions come to the fore, such as:- How could a country that was supposed to have one of the most successful agricultural systems in the developing world lurch into a crisis of hunger, simply as a result of a financial crisis and a relatively short drought?- If indeed a serious food crisis did not exist, was the diversion of global food aid to Indonesia depriving other, more deserving countries in crisis, such as North Korea? This was not a theoretical question since Indonesia emerged as the worlds largest recipient of food aid for 1998.In view of these conflicting reports, the Council decided to send an investigating mission toIndonesia to ascertain the actual state of food security. 5 Conversation with Ahmad Mahmudi, director of Lembaga Pengembangan Technologi danPendesaan (LPTP), Solo, Java, Indonesia, 31 January 1999. 72
  • 73. The Fact-finding teamOur host in Indonesia was Riza Tjahjadi of Pesticide Action Network (PAN) Indonesia. The overallcoordinator was Poh Li Kheng. In Jakarta, Luisa Caparas provided assistance in coordination oflogistics. The members of our team were Francisco Lara Jr. of the University of the Philippines,Philippines; Cass Evert (translator) of PIJAR, Indonesia; Ovan Sopandi of Pesticide Action Network,Indonesia; Marco Mezzera of Focus on the Global South, Thailand; Simon Karunagaram of ERAConsumer, Malaysia; Indra Tata Purwita of Walhi, and Bagong Suyoto of Pesticide Action Network,Indonesia; Walden Bello of Focus on the Global South, Thailand; Tran Hong Truong of VACVINA,Vietnam; Daycha Siripatra of TREE, Thailand; John David Comtois of RRAFA, Thailand; and Dr.A.Z.M. Obaidullah Khan, the former director of the FAO Asia Pacific; Congressman LeonardoMontemayor and former Senator Leticia Shahani, both of the Philippines; and Anuradha Mittal ofFood First, USA.Sites visitedJakarta, East Timor, and four provinces (West Java, Central Java, East Kalimantan, Nusa TenggaraTimur) of Indonesia were selected for the purpose of the mission. The selection criteria were basedon accessibility to communities through local NGOs working on food and agriculture issues. Wevisited West Java, Jakarta, Central Java (Yogyakarta, Solo, Pacitan, Rembang), East Kalimantan,Nusa Tenggara Timur (Kupang) and East Timor. In all these places we visited with the urban poor,farmers, small rural tradespeople, fishermen, government officials, various church groups, non-governmental organizations (NGOs) and relief organizations.MethodologyThe mission investigated the cause and impact of food insecurity, the gender differential, regionalvariations, the ethno-cultural differential in food insecurity, and the accuracy of data that is beingprovided by multilateral institutions. We also looked at issues relating to production, distribution,purchasing power, and levels of food intake (e.g., Is there real starvation? Is it a question ofmalnutrition? Or is low food intake more related to more structural conditions such as poverty andinequality?)The main method of data gathering at the micro or community level was through semi-structuredinterviewing . The team collectively and critically discussed the interview results. The analysis andwrite-up team brought together the final analysis of the micro data and integrated it with macro data.Indonesian organizations and individuals consultedIn Jakarta, besides visiting several urban poor communities, we met with the Minister of FoodAffairs and Horticulture, A.M. Saefuddin, the FAO, WFP, several NGOs, the World Bank, Bulog(National Logistics Agency) and Bappenas (the National Planning Agency).Other organisations, located both in Jakarta and other parts of the country, which assisted us orwhich we visited or spoke to were Terre Des Hommes; AULIA; YASPUK (Yayasan PendampingPerempuan Usaha Kecil); PPSW (Pusat Pengembangan Sumberdaya Wanita); Professor BungaranSaragih (Institut Pertanian Bogor); Jennifer McAvoy, Oxfam Great Britain; Catherine Hurst,AUSAID; Bill Barclay and Philip Clarke of the World Food Programme; YLKI (Yayasan Lembaga 73
  • 74. Konsumen Indonesia); Yayasan Kesejahteraan Darussalam; Yayasan Padi Indonesia; Bapedalda(Environment Management Agency); Plasma; Rio Tinto Foundation; CARE International; ProfessorLoekman Sutrisno of University Gadjah Mada; Yayasan Mitra Tani; Father G. Utomo and HPS(Hari Petani Sedunia); USCF/Satunama; LPTP (Lembaga Pengembangan Technologi danPendesaan); Bosco; the Governor of Nusa Tenggara Timur; Plan International; Dolog; SalesianOrder in East Timor, Brother Ephrem Santos; FOKUPERS; ETADEP; Caritas Dili; UNICEF Dili;CARE International Dili; YHAK (Yayasan Hak); CNRT (Council for National Resistance of EastTimor); DSMTT (Democratic Students Movement in Timor Timur); OSK-TL (Youth SolidarityGroup); and LSK (Lembaga Studi Kemasyarakatan and Bina Bakat).To these individuals and groups in Indonesia, we offer our sincere thanks and heartfelt appreciationfor all the help and time they provided, without which the trip could not have been possibleJakarta, 11 Mei 1999. ---All materials prepared by Riza V. Tjahjadi of PAN Indonesia (above), then, reformulated by Infid,the International Forum on Indonesia Development, Secretariat in the following. ---oo0oo--- INFID STATEMENT ON FOOD AID Paper prepared for the INFID Annual Lobby 1999The problem of food crisis in Indonesia during the last few months, as a part of theeconomic crisis in Indonesia, should necessarily be straightened up. The blown-up food aidproblem derives from the following:• The new Indonesian government under Habibie announced that around 17 million household or 89 million people are threatened with famine, and therefore Indonesia needs to import as much as 5.1 million tons of rice (one-fourth of the world’s rice trade volume).• That announcement was triggered by the assessment made by WFP-FAO in April 1998 based on BULOG data, implying that it was necessary to give food-aid to Indonesia. It concluded that Indonesia’s rice import requirement was 3.4 million tons in 1998. Later in October 1998, WFP-FAO revised its assessment to even bigger number, namely 5.14 tons. This figure is different from the joint-assessment announced by A.W. Jalil in his final report in September 1998, estimating Indonesia’s rice import requirement at 3.2 million tons. Dr. Elmar Mueller of FAO-Bangkok also disagreed with the initial estimate 74
  • 75. for reasons of methodological error, and he estimated that Indonesia needed to import 840,000 tons of rice only.• However, the WFP-FAO statement in April 1998 sounded an alarm to international community, followed by the offer of grant and soft-loan commitments to Indonesia. The WFP office in Jakarta, which had been closed in 1995, was reopened in 1998 at the requests of donor countries and the Indonesian government.• Several countries pledged to provide Indonesia with rice. Japan pledged to supply 500,000 tons of rice in soft loans and 100,000 tons as grants. Taiwan promised to sell 200,000 tons. China 250,000 tons and Vietnam 10,000 tons, while Thailand declared that it would donate 5,000 tons. The US agreed to grant 12,000 tons of rice and sell 300,000 tons. The Singapore government provided S$12 million of humanitarian assistance (grant) in rice and medicines. Total assistance received in fiscal year 1998/1999 (April to May) was less than 250,000 tons (less than 1% of Indonesia’s total rice production of around 30 million tons). Besides, rice assistance was also received from foreign NGOs, among others from CRS amounting to 25,233 tons of rice and from the World Vision 11,033 tons. The total rice assistance from donor states as well as donor agencies amounted to 596,266 tons.In reality, food-aid was found out to serve the interests of several donor countries. Theprovision of Japanese food aid was pushed by the ruling Liberal Democratic Party (LDP) inorder to serve as an outlet for excessive rice stocks in the possession of the Ministry ofAgriculture, Forestry and Fisheries (MAFF). The MAFF had excess of rice stocks of 4million tons. In the case of Singapore, its rice was specifically earmarked for the military –no doubt part of the island country’s effort to conciliate Indonesia, whose president wasaccused of not having a constructive attitude towards its neighbors during the financialcrisis. For the United States, it saw aid as a way to dump wheat into Indonesia, thus openingup a previously unexploited market. These motives were criticized by Canada and theEuropean Union, as actually such assistance was given against the background of tradecompetition to expand their market in Indonesia.On the other hand, the Indonesian government is highly interested in its rice policy as aninstrument for economic stabilization, and especially on the eve of the general election.Fortunately, although WFP food assistance will be continued, it would resume only in July1999 to April 2000, so that it would not be used as an instrument of money politics duringthe election. Meanwhile, as a result of good rice harvest in the middle of February to April1999, the government stopped its rice import for the time being. Moreover until May 1999,the farmers have finished harvesting only half of their rice-fields. This year, Indonesia’s riceproduction is predicted to increase, namely reaching 49.2 million tons, an increase of 6%from last year production of 46.44 million tons. Meanwhile in BULOG’s own warehouses astock of 2,53 million tons are stored.Ironically, the farmers themselves are among the unfortunates. This year the governmentwas late in buying rice from farmers, so that the farmers were compelled to sell theirunhulled rice far below the floor price. Basically cheap rice policy victimizes the farmers. 75
  • 76. On the other hand, a pressure put to bear on the government by the IMF to liberalize ricetrade (import and export), has encouraged some business circles (such as in South Sulawesiand Merauke) to export rice.So, it can be concluded that:1. Rice remain to be the main food commodity in Indonesia, and therefore the government attempts at all cost to secure supply of cheap rice.2. WFP food aid will be continued (for July 1999 to March 2000), despite the fact that actually there is not food crisis any longer.3. Therefore in medium and longer terms – after 2000 – food aid should be eliminated from the government’s mind, and Indonesia should not rely its rice supply on assistance from donors as well as UN organizations (WFP). It would be paradoxical, if Indonesia continues to request for grants, while on the other hand it is able to export rice.Therefore it is recommended that the future advocacy works of non-governmentalorganizations should be directed as follows:1. It is necessary to monitor strictly on future food aid. Donor countries should be requested not only to give food-aid (grant), but it is also necessary to give a picture and a clear specification on the origin, process and treatment of food production itself. This is especially aimed at preventing unsafe food dumping (food production whose safety on human consumption has not been known) because of the prevailing tests of genetically engineered food (g-e food). This will also constitute an entry point for the revision of Law no. 7 year 1996 on food, that has allowed the production of genetically engineered food for human consumption.2. Concerning assistance in the form of seeds, above principles should also apply, and information should be socialized in such a way that the farmers or growers have a clear understanding on the origin of the seeds and the possibility of their negative impacts. Above scheme can reduce to a minimum the possibility of farmers being used as guinea pigs by monopolistic seed seller (due to the introduction of patent system) and the introduction of g-e seeds by TNC agribusinesses whose safety for humankind and environment calls for serious doubt. If such practice is not prevented, the farmers will have to pay royalties and return to the old trap of exploitation and dependency systems, economically as well as ecologically. It is worthwhile to note that biotechnology is a FAO favorite to bring about a second green revolution for global food security – as it was submitted in the World Summit in November 1996.3. Organic agriculture is suggested to be reconsidered as a priority in providing seed assistance packets.4. It is necessary to establish different mechanisms from planning, implementation to monitoring on food aid and to be popularized extensively and transparently, so that deviation cases like the ones found in the implementation of social safety net programs could be prevented.No date indicated by Infid Secretariat ---oo0oo--- 76
  • 77. Background, compiled by RVT, PAN IndonesiaRice SituationJakarta, IndonesiaOctober 19, 19989. Retail and wholesale rice prices have declined by 5-10 percent in most regions of the countrysince early September. We have increased our releases from public stocks at prices closer to, but stillbelow, prevailing market prices and are implementing the other elements of the seven-point strategyfor rice that was adopted in September. Import parity prices have declined as the rupiah hasstrengthened, and the gap between domestic and international prices is now modest, eliminatingincentives to smuggle rice from the domestic market. To maintain a higher level of releases frompublic stocks until the main harvest in February-March, we have taken steps in September to ensureadequate imports through public tenders and direct contracting. In addition, a ministerial decree wasissued in late September that authorized the import of rice by any private trader.10. To ensure that the poorest have continued access to rice, the government is rapidly expanding thehighly subsidized targeted program to deliver 10 kilograms of rice monthly to poor families at aprice of Rp 1,000 per kilogram (about one-third of the market price). The program was extended toreach 5.6 million very poor families by September, and is expected to expand to 9.5 million targetfamilies by the end of October. The government is considering to broaden the scope of the programby increasing the target group to possibly 17 million families nationwide, and to increase themonthly delivery per family.11. We are making strong efforts to streamline distribution procedures and make adequate foodsupplies available to the most vulnerable groups. Key challenges include ensuring that poor familiesare better targeted in all localities, especially in urban areas. The government is now consulting withthe World Bank on how to coordinate with private voluntary organizations specializing in foodassistance and bilateral donors to marshal appropriate technical expertise, particularly for improvedtargeting and community monitoring. The World Food Program is exploring ways to supplementtargeted rice distribution with additional aid, including an expanded food for work program, and thegovernment will launch in October a supplementary feeding program for children and pregnantwomen.September 11, 1998Dear Mr. Camdessus:The Government of Indonesias economic program, now being supported under an extendedarrangement, was set out in the Memorandum of Economic and Financial Policies (MEFP) attachedto the letter sent to you on July 29. This economic program is on track, and remains appropriate toIndonesias circumstances. However, aspects of the program have been developed further, and thesenew measures are described in the attached Supplementary Memorandum.We have established indicative targets for monetary and fiscal variables, and for internationalreserves for end-October and end-November, in order to guide policy during the fourth quarter, andthese are set out in the annex. The review scheduled for November 25 will be based, inter alia, onperformance in relation to the October indicative targets for base money, net domestic assets of BankIndonesia, liquidity support to banks and net international reserves.Sincerely yours, 77
  • 78. For the Government of Indonesia,Ginandjar KartasasmitaState Coordinating MinisterFor Economy, Finance and IndustryJakarta, IndonesiaSeptember 11, 1998 Supplementary Memorandum of Economic and Financial Policies1. The Government of Indonesias economic program, most recently described in the Memorandumof Economic and Financial Policies (MEFP) of July 29, 1998, remains on track. In particular, therupiah has strengthened considerably since mid-July, reflecting strong policy implementation andgrowing confidence in the program. Monetary policy has been in line with the program, and thefiscal balance is well within the program limit. Important structural policy measures taken in recentweeks in several areas, especially bank restructuring and corporate debt, have also contributed toincreasing market confidence. Although inflation was high in July and August, it is expected todecline substantially in the period ahead, given the strengthening of the rupiah and the measuresbeing taken to improve the food situation. In these circumstances, while major changes to theprogram are not envisaged at this stage, we have further developed some aspects of the program, asdescribed below. An updated matrix of structural policy commitments is attached to thismemorandum. The revised program has been worked out jointly with the IMF, World Bank andAsian Development Bank.12. To help ensure that inflation is reduced quickly and that the rupiah continues to strengthen, weintend to continue to implement a firm monetary policy, consistent with the monetary targets alreadyestablished as part of our program. As inflation declines, and provided the rupiah remains in linewith the program path, we expect that interest rates will decline gradually, easing the pressure on thecorporate and banking sectors. At the same time, we are taking steps to ensure that fiscal policy is assupportive of recovery as programmed. In particular, development expenditures, including those forthe social safety net, which have been running below the programmed level, are to be stepped up inline with budget targets.3. Increases in food prices, especially for rice, have been a major factor behind the pickup ininflation in July and August. For rice, a disappointing second harvest and some panic hoarding havecontributed to the sharp run up in prices in recent weeks. As a result, domestic market prices arecurrently close to international prices. This has made it even more urgent to shelter the poor from theeffect of high rice prices. Therefore, our program for providing rice at very subsidized prices to poorfamilies, which has already been extended to over 2 million households, will be extended further toat least 7.5 million poor families by October. In order to stabilize and reduce market prices paid bythe general public, BULOG is increasing substantially the quantity of rice released into the market atbelow market prices, and will maintain a higher level of releases until the main harvest. Also, for thefirst time in thirty years, we will allow private traders to import rice. These steps are part of the sevenpoint strategy adopted by the government as an immediate response to the rice situation. In addition,we will continue to provide physical protection to traders and for warehouses and transportation ofsupplies. Even with these steps, however, recent developments have proved that maintainingdomestic prices substantially below prices in international markets is not feasible.4. As an additional step to improve the food situation, we have eliminated the BULOG monopoly onwheat, sugar, and soybeans, and we intend to turn over their importation to the private sector. We 78
  • 79. have also recently decided to eliminate the subsidies on wheat and sugar and to gradually phase outthe subsidy on soybeans. While it would have been desirable to maintain the subsidies for the timebeing, as had been foreseen in our program, their benefit to consumers was being eroded by thedifficulties to prevent illegal exporting and higher markups of traders. The decision of thegovernment to eliminate these subsidies was thus dictated by the reality of market participantsbehavior, and was not made as a commitment under the program. For the same reasons, subsidies forthe importation of soybean meal, fishmeal, and corn have also been eliminated. For all thesecommodities, relevant import duties have been removed. In the case of sugar, it is expected that thesemeasures will not lead to upward pressure on the domestic price, which has recently been aboveinternational levels. For the other commodities, significant price increases are not expected,reflecting increased competition and efficiency, and also the removal of import duties. The removalof subsidies on these commodities means that existing export bans (except for rice) are no longerrelevant, and these will be eliminated by September 21.5. In coming weeks, we will be working closely with the World Bank and the Asian DevelopmentBank on additional steps to improve the targeting of remaining subsidies, and consideration will begiven to selective increases in administered prices. Subsidies on aviation fuel will be eliminated byOctober 1, 1998. A mechanism for regular adjustments to administered prices to be introduced for1999/2000 will also be developed. In addition, also in collaboration with the World Bank, we willdevelop a plan for the longer-term role and the corresponding restructuring of BULOG.6. The Government is fully committed to moving ahead with privatization and a master plan forprivatization is nearing completion, including provision for the sale of majority stakes in stateenterprises over the medium term. The privatization program for this year, however, has beenproceeding more slowly than originally hoped, because of the weakening of the domestic economy,and an adverse shift in investor attitudes toward emerging markets generally. Procedural difficulties,including with respect to regulatory and legal changes required in some cases, and concerns aboutselling assets when prices are very depressed have also been factors. While in these circumstancesour privatization efforts in the near term will need to be more selective than originally envisaged, wehave been working closely with the World Bank, and preparations in a number of suitable cases arewell advanced. These include cement, some areas of telecommunications, mining, plantations, andinfrastructure. On the basis of current plans, achievement of the program target for privatizationreceipts for 1998/99 is still possible. However, given the exceptionally unfavorable environment andinevitable uncertainties related to privatization, especially as regards timing, a shortfall from theprogram revenue target is now likely. This should not jeopardize the achievement of the overalltarget for the fiscal deficit, given the savings on subsidies now in prospect.Seven Point Strategy for Rice 1. BULOG will release large quantities of rice of all qualities into the market in the coming days.2. This rice will be released into the market at less than the market price.3. BULOG will increase direct deliveries of medium quality rice to retailers and cooperatives.4. To put further downward pressure on prices, VAT on rice (and also other essential commodities)will be suspended.5. The program for delivering rice at prices well below market prices to poor families will beexpanded as quickly as possible, with the help of provincial governors.6. BULOG will actively seek new import contracts for rice to ensure that stocks remain adequate.7. Private traders will be freely allowed to import rice.Food Security and Distribution NetworkJuly 29, 1998 79
  • 80. We attach the highest priority to ensuring that food and other essential items are available ataffordable prices to the entire population. However, food prices, in particular the prices of rice andcooking oil, have risen drastically since the beginning of May, causing serious social hardship. Inaddition to the increase in subsidies provided for in the budget, and the special program for rice (seeparagraph 10 below), the stabilization of prices for these items will also require that the distributionsystem functions fully and efficiently.8. While most private trade is functioning well, we are taking a number of actions to ensure thatthere are no remaining impediments to the efficient movement of supplies of basic commoditiesthroughout the country. These steps include the physical protection of traders to reassure them thattheir business can be carried out normally; the protection of warehouses, trucks, and containers ontrading routes to encourage them to build up stocks; and assistance to traders who suffered damageduring the riots, to rebuild their facilities. We are also enhancing the daily monitoring of all relevantaspects of food security including price developments, movements of goods including imports,stocks, and releases of commodities by BULOG. A special team headed by the Minister of Food andHorticulture has been created with overall responsibility for monitoring the food situation.9. We are concerned about pressures on food prices because substantial exports of subsidizedcommodities have occurred over the past several weeks, driven by the wide differential betweendomestic and international prices. As an emergency measure, we have therefore imposed atemporary ban with effect from July 26 on exports of rice, wheat and wheat flour, soybeans, sugar,kerosene, and fishmeal. Within three weeks from July 26, these bans will be replaced by exporttaxes. These taxes will be phased down as price differentials are reduced.____________________________________Subject: letters of intent info. request reply Date: Thu, 25 Feb 1999 11:22:53 -0500 From: Kay Treakle <bicusa@igc.org> To: biotani@rad.net.idJakarta, Indonesia Excerpts from Letters of Intent Concerning IndonesiaDear Riza,In reply to your information request dating 2/18/99 I have compiled thefollowing series of excerpts concerning letters of intent related toagriculture. My source was the IMF website. All of the letters areaddressing Mr. Michel Camdessus, Managing Director, International MonetaryFund, Washington DC 20431 and are from the Government of Indonesia, ByGinandjar Kartasasmita, State Coordinating Minister For Economy, Finance,and Industry.If you have any questions please do not hesitate to ask.Sincerely;Melissa McNameeIntern 80
  • 81. Bank Information Center Nurina letter of Intent 2.doc Name: Nurina letter of Intent 2.doc Type: Winword File (application/msword) Encoding: base64 ---oo0oo---"Li Kheng Poh" <lk.poh@focusweb.org>Question and commentsDear Li Keng,What wrong with you, Keng? Why there are (always) mistake whenever you circulatemessage(s). Please, read two-three times before you send it out. You shouldnt in hurry,right? Or, youve got stressed?By the way, please, send minutes of KL meeting on May in text file. If text too long, pleasesplit into two messages.Then, how about this?<4. Indonesia food security report>a. The trip by the Malysians have been delayed because their contact have told them it isnot safe. However I am pressing them on this.>>b. This is a note to Rachael on this: it is important that you go there as soon as it ispossible. I will be calling Indrani on Monday on this matter.(from: Subject: Update 4; Date: Sun, 12 Jul 1998 16:47:37 +0000)What are the result(s)?Moreover, I have some comments to final draft of research design.First, why Indonesia just an optional? It’s common question, but it can be assessed intofollowing questions. 81
  • 82. Its is not important variable of research purposes or what? Is the Indonesia has no significantrole(s) to rice in the Asia and/or SEA region?Secondly, it is not true statement or even misleading statement in the second paragraph of“Background”.Riots in Indonesia since end of 1996 to 13-14 May 1998 has victimized china minorityethnic, and then, to anti Christianity or catholic. I mean, target by anger mass had not onlystaple food traders/retailers, but cover to automotive showrooms, houses, all related toChinese conglomerate. (preliminary assessment on this misleading statement recently pursueby my field staff)Other information, it will interested to get significant finding between El NiÁo impacts, andthe gap of data on production (prepared by the ministry of agriculture) and marketing(prepared by Bulog). Meanwhile, riot during 13-14 May 1998 shown two tendencies:victimized Chinese ethnic by organized groups, and displacement of mass attention.I think Pancho has made general impressionHere my further info:Pre May 1998.1. Mass people angered during January/February to March, mostly by prices soaring.Coincidencely, many goods and staple foods stored by distribution channels.Post 13-14 May 1998 Reports from across the country (16 June 1998) say prices of various basic goods haveskyrocketed amid a scarcity in supplies resulting from the recent rioting that claimed nearly1,200 lives. Renewed rioting broke out on Monday and Tuesday in the crowded East and Central Javaprovinces, causing widespread property damage, but no reports of casualties. In East Java’s Lamongan district, angry residents burned several cars and homes onMonday, while in the Central Java district of Tegal at least 50 shops were damaged or lootedon Tuesday. The economic crisis has lowered people’s purchasing power. The Indonesian rupiah haslost up to 80% of its value since last July 1997.2. Data gap by Bulog and MoA. There was mismatch or gap data on supply side (unhuskrice production by MoA and milled rice procurement by Bulog), in turn, encourage Bulog toincrease importing rice.3. Highlight/situations in the last three months3.a. Distribution channels stagnance and return to control (monopoly) 82
  • 83. The second rice harvests starting next month in Java are expected to be good and thecountry is unlikely to have to raise imported stocks beyond five million tons in 1998, traderssaid yesterday. "We don’t know the size of the second crop yet. But if we survey Java, the planting looksexcellent and there has been a lot of rain," said one trader in Jakarta. "The crops tend to bebig... and maybe Indonesia does not need too much additional rice." The densely-populated island of Java is Indonesia’s rice bowl. Indonesia has said it would import 3.1 million tons of staple rice this year to help feed thecountry’s 200 million population who are struggling with rising prices of essentials becauseof the ongoing currency crisis. The rupiah has lost more than 80% of its value against the US dollar since last July. It wasquoted at Rp14,600/Rp14,800 per US$1 yesterday afternoon. Traders were quoted as saying by Reuters that the imports would take place during thefiscal year (April/March), but the country had previously secured imports of between 1.6-1.7million tons of rice, which means total imported stocks will reach nearly five million tons. But traders said a possible problem was if the National Logistics Agency (Bulog) whichimports rice and other essentials, failed to obtain the 1.1 million tons of rice it had alreadyagreed with major companies because of problems in opening letters of credit (L/C). Indonesia’s financial crisis means many foreign firms are unwilling to accept L/C’sbacked by domestic banks. "If Bulog does not get the 1.1 million tons of rice, it has to goback to the market and repurchase. But frankly, I don’t think Indonesia is in desperate needof more rice at the moment," said the trader. Traders said rice hovered at Rp1,600 per kilogram and distribution was reported to besmooth because of the stable rice prices. Minister of Agriculture Soleh Solahuddin has said the country’s unhusked production isestimated to fall 6.25% to 46.3 million tons in 1998 against 1997 production because of lastyear’s drought induced by the El Nino weather phenomenon. The August harvest accounts for a third of total output. The United Nations Food andAgriculture Organisation (FAO) said last week Indonesia’s food situation had worsened inrecent months and it was likely the key August harvest of rice would fall below target. Chief of Bulog, Beddu Amang, said the government has decided to carry out a ‘specialmarket operation’ on rice this month.This hopefully would ease people’s difficulties ingetting rice at a low price, Amang told newsmen after meeting with President BacharuddinJusuf Habibie. Some 7.3 million low-income families across the country — victimized by the economiccrisis that has caused massive layoffs and increased prices of commodities — are the targetof the market operation. Amang said the government will also revoke the presidential decree issued a few monthsago, stating that Bulog will only manage the trade of rice. The president will soon issue anew decree that will enable Bulog to take part in the distribution of important commodities,such as sugar and soybeans, he added. Amang also reported the start of an international tender by Bulog for the provision ofseveral basic commodities. "This Tuesday, a tender for wheat will be held," he said. 83
  • 84. The international tender will be carried out by Bulog with the assistance of the WorldBank and the US Department of Agriculture, under the supervision of Indonesia’s StateAuditing Body and the State Financial and Development Supervisory Board (15th July1998). (...) although food supply is adequate, there are still areas and communities vulnerable tofood scarcity for inability to buy rice, because of lowered purchasing power, high inflation,low rupiah exchange rate, and termination of employment. The FAO estimates that some 40million inhabitants are vulnerable to food scarcity for lack of buying power (2 July 1998). "People are experiencing income shocks. A lot of people have been sacked while prices ofessentials soared. Indonesians have become poorer and poorer. This rice policy is good, butnot for this time," said Dillon, executive director of the Center for Agriculture PolicyStudies. "Food consumption has taken away half of the people’s income. Do you really wantto put the people in further strain?" he asked. Traders said on Tuesday the prices of rice were mostly stable after rising last weekfollowing the government’s price hike. They said 40% to 50% broken rice is quoted atRp1,600 to Rp1,700 per kilogram, 25% at Rp1,900 to Rp2,000 per kilogram while 5% to10% broken hovered at Rp3,000 to Rp3,500 per kilogram (11 June 1998).3.b. Distribution channels stagnance (mostly focus to coocking oil) "This time I have to be frank with you," said the President, "if, in two weeks time, thedistribution of the basic commodities does not return to normal, I will ask producers to droptheir contracts with the old distributors, and give them to other companies who are willing toinvest in the distribution system." President Habibie further added: "I don’t think we should only think of a couple ofthousand distributors. We must also think of the fate of more than 200 million peoplewho are suffering because of the lack of a distribution system that has resulted from thefailure of many distributors to return to work. President Habibie yesterday called on the Association of Young Indonesian Entrepreneurs(Hipmi) to take over the distribution networks left behind by Chinese Indonesians who fledthe country following the mid-May rioting. "The president has asked Hipmi to reestablish the distribution system and to be pro-activein its efforts to find new business opportunities during the prolonged crisis," HipmiChairman Bambang Wiyogo told reporters after meeting with President Habibie at the BinaGraha here yesterday. "Although Pak Habibie asked ethnic Chinese businessmen to return to the country and hasguaranteed their security, he has also asked Indonesian young entrepreneurs to participate inrebuilding the distribution system," Wiyogo said (8 July 1998).4. Farmers perspective Agriculture Minister Soleh Solahuddin put forward that farmers had the right to store theirrice, because its price was increasing. The government is convinced this will not disturb thedomestic supply of rice. In time a rice price equilibrium will be reached which is fair toeverybody. 84
  • 85. According to Soleh, many factors have led to the hoarding of rice by farmers.The increasein the base price of unhulled rice, Rp 1,000 per kg, did not overly much influence theincrease of prices in the market. Besides the rice price being partly determined by importprices, it also followed the general increase in other commodities. Transportation and the distribution mechanism were also influencing factors. He said thatthe government promotes the price increase periodically through the base price of unhulledrice. Soleh said that the government wanted the market mechanism to take over in time. Oncondition that economic conditions would have to be better than at present, so the price ofrice would reflect a true market-determined value, and thus a fair price for the farmers. He admitted that currently a nation-wide production decrease was taking place. This couldonly be coped with by increasing production of the present planting season, and thescheduled rice import. He said that he was optimistic that the unhulled rice price increase toRp 1,000 per kg, announced by the President, would move the farmers to increaseproduction (16 June 1998).Well, I think, I can prepare such research activities with limited or smaller locations. But, Ido not know how (much) for implementation support by Research division or Secretariat.Regarding proposed (next) meeting, I prefer Manila.Thats all?Take care,Riza VT09/08/98 85