Roles of Commodities in Poverty Alleviation
and Strengthening Landscape Management:
Towards Sustainable Advantage
Prof. Dr. Bustanul Arifin
barifin@uwalumni.com
Professor of Agricultural Economics and UNILA
Board of Founders and Senior Economist with INDEF
Chairman, Indonesian Society of Agricultural Economics
Workshop “Perencanaan Tataguna Lahan dan Pengelolaan Sumberdaya Alam”,
Kementerian Koordinator bidang Perekonomian dan CIFOR, 26 April 2016 di Jakarta

Comparative Advantage: Necessary, but not Sufficient
• Indonesian has adopted the strategy in the last half century. As a result,
– Coffee, number 3: production 710 thousand tons, export 500 thousand tons
– Cocoa, number 3: production 800 thousand tons, export 450 thousand tons
– Rubber, number 2: production 3.2 million tons, almost all for export markets
– Palm Oil, number 1: production 30 million tons, export 26 million tons
• The strategy is necessary, but not sufficient to contribute to farmer’s welfare
• Low yield, poor access to good agricultural practices (GAP) and technology.
• Supply chains and marketing systems of the crops are generally not efficient
• Small portion of economic benefit of trade is received by smallholder farmers
• Indonesia then adopted the development strategy that focus on improving the
competitiveness of the Indonesian economy, competitive advantage

Competitive Advantage: Micro and Macro
Also known as: Porter’s Diamond

Agroforestry Landscape: Sustainability?
Forest
Agriculture
Forest
Intensive
agriculture
Tree
plan-
tations
Agroforestry/
eco-agriculture
Tree
cropsAgriculture
Forest
Source: Van Noordwijk, 2008

Sustainability Certification: Three Scenarios
1. Leaving it to the market: Institutionalization of private
governance arrangements, more inclusiveness, increasing
relationships between schemes. Weakness: Producers not sure
of a premium fee, inefficient duplication of efforts
2. Bringing the state back in: Transparency and accountability
requirements, creating complementarities between private and
state regulations, information dissemination and training.
Weakness: Doubts about the capacity of developing countries
for system changes, many governments are not interested in.
3. Institutionalizing meta-governance: Collaborative public-
private efforts to enhance coherence in the world of sustainability
standards. Weakness: Focus only on technical aspects, doubts
about power and mandate of meta-governance attempts

Closing: Towards Sustainability Advantage
• Business initiatives on PISAgro (Partnership for Indonesia
Sustainable Agriculture): PPP (Government, KADIN & WEF) to
implement the New Vision for Agriculture (NVA): food security,
economic opportunity and environmental sustainability
• Initiatives on PISAgro to implement the NVA are subject to
scale-up and scale-out strategies to be replicated across
different agro-ecosystems, so that the government supports to
provide incentive systems are really needed.
• Sustainability shall become new norms and business practices
in the future by broadening into ABGC (academics, business,
government and civil society) collaborations and networks.
• Future research on the subject is really needed, so that best
practices of sustainability advantage could be formulated in
different lines of business and macro-economic environment.