A Land Without Farmers: Indonesia’s agricultural conundrum

(Main photo: Indonesia - Employment in agriculture, services and industry [% of total employment]. The data is according to the World Bank compilation of development indicators, collected from official sources.)

The rate at which the country is losing farmers is a cause for concern. If it continues, Indonesia is likely to have no farmers left in 50 years. What will we eat?

“Well, we will be hungry,” said Adang Parman, 58, a farmer from Ciburial village in West Java. Every day, the father of three heads out to the field at the break of dawn to pull out weeds, water his plants or pluck vegetables from his rows of plants. His sons, meanwhile, plow the land with a handheld walking tractor.

Adang has been working in the fields for more than 40 years. The work is demanding and laborious. This probably explains why fewer and fewer people are taking up the profession.

The country lost 5.1 million farmers between 2003 and 2013, with their numbers falling to 26 million, according to Statistics Indonesia (BPS). The trend is expected to continue in the next few years. At this rate, Indonesia would lose all its farmers by 2063.

“A large proportion of young people view agricultural work as low-wage, manual labor that is more suited to those from poor backgrounds who have limited education,” a 2016 SMERU Research Institute report reads.

Agriculture is a huge contributor to Indonesia’s economy. Around 29 percent of the Indonesian workforce works in the agriculture, fisheries and livestock sector, which contributes nearly 13 percent to the country’s GDP. It is the third-biggest contributor to the economy after manufacturing and trade, according to Statistics Indonesia (BPS) data.

Fewer young people are pursuing farming as a profession compared with previous generations. Only 23 percent of the country’s 14.2 million people aged between 15 and 24 worked in the agriculture, forestry and fishery sectors in 2019, data from the National Labor Force Survey showed.

Asep, Tisna, Dika – Adang’s three sons – represent the minority of young people venturing into agriculture, following in their father’s footsteps.

With a population of just 12,000 — less than a quarter the capacity of a major football stadium — Ciburial offers vast expanses of lush, fertile land, perfect for farming. This is not the case elsewhere in Indonesia.

Between 2013 and 2019, Indonesia’s agricultural land decreased to 7.46 million hectares from 7.75 million ha, according to data collected by the Agrarian and Spatial Planning Ministry, BPS and several other government institutions.

Problems like increasing production costs, changes in weather and pest attacks have also pushed farmers to change professions, with land owners either converting land to other uses or selling it, the SMERU report states.

So, what went wrong? How can we support more farmers like Adang and his family? The Jakarta Post spoke to farmers, agriculture and food companies, policymakers and experts on the challenges and opportunities for Indonesia’s farmers and the agriculture sector.

6 Reasons Why Farmers Can Barely Make Ends Meet

1. Not earning enough

 

Rp 55,503 (US$3.81). That is how much farmers earned on average per day as of June, according to nationwide data compiled by Statistics Indonesia (BPS). Compare that with Rp 89,737 per day for construction workers.

In the concrete jungle of Jakarta, the official minimum wage is Rp 3.9 million per month, roughly Rp 160,000 per day, three times what farmers earn.

“Most young people are image-conscious. Most of them are afraid of getting dirty,” said Tisna Rohmat, a 33-year-old farmer. “They want to work in offices instead.

Cahyono Kurnia, a farmer from Ciwidey, West Java, said price uncertainties that lead to losses had discouraged young people from joining the sector and had forced some farmers to stop farming until they could raise enough capital to start again.

“Farmers must deal with harvest cycles. Some get their capital back, some do not,” said Cahyono, who now sells his tomatoes directly to consumers with the assistance of agritech start-up TaniHub Group.

2. The middlemen trap

Without access to a distribution chain, most farmers rely on middlemen to market their crops. Indonesians call them tengkulak, a word that carries negative connotations.

Middlemen buy from farmers in bulk at very low prices, sometimes locking in orders long before harvest — a practice called ijon. Farmers entrust their produce to these middlemen, as they don’t have the networks to market their products.

In a 2016 special report, the Post spoke with shallot farmers in Brebes, Central Java, the biggest shallot producing region in the country. They said they “are on the foolish side” and only knew how to farm and sell shallots to middlemen.

“The ups and downs of farming impact people’s level of interest in working in the sector, especially among younger generations,” SMERU researchers wrote. They studied farmers and farmlands in Cianjur and Bekasi in West Java and the Banjar regency in South Kalimantan for the 2016 study.

“Most of us have been lied to by tengkulak in the past [...] We didn’t have any price certainty when we sold our vegetables,” said Cuandi Yusuf, a farmer from Ciwidey, West Java, who produces red chili, carrots and cabbage.

Cuandi, who farms his own 800 square meter field and 1,400 sqm he rents from a nearby pesantren (Islamic boarding school), now sells his produce directly to modern markets. He is one of the beneficiaries of the Indonesia Japan Horticulture Public-Private Partnership Project (IJHOP4), organized by the Japan International Cooperation Agency (JICA).

3. The rise of processed foods

From frozen vegetables to wheat breads, breakfast cereals and instant noodles, cheaper and more convenient processed foods are rising in popularity, posing a threat to those who sell fresh agricultural produce.

Sales of ultra-processed food have increased 10 percent per year in middle-income countries, according to studies cited in a 2019 report from the United Nations Food and Agricultural Agency (FAO). This contrasts with declining growth in agricultural production and crop yields in recent years.

The FAO estimates that growth in global demand for agricultural products will fall from an average of 2.2 percent per year over the past 30 years to 1.5 percent a year for the next 30 years. This slowdown will be more dramatic in developing countries.

Ciwidey tomato farmer Cahyono also raised concerns about people’s health.

“[Without farmers], there may not be healthy food because most healthy food comes from vegetables,” he said. “If we don’t farm, what will city people eat?”

Making matters worse is the flock of imported agricultural and processed food products. Farmers for some commodities have to also worry about flooding imports threatening their existence.

Take soybeans as an example. University of Lampung (Unila) agricultural economics professor Bustanul Arifin said local soybeans had fulfilled about 90 percent of national consumption in 1992. But the sector soon faltered due to waves of droughts, economic crisis and cheap soybean imports from the United States in the next decade.

Now, local soybeans can only fulfill 30 percent of national needs. United Nations Comtrade data show that Indonesia imported 2.44 billion kilograms of soybeans worth US$1.06 billion last year, three times the volume and five times the value in 1992.

Several other local commodities also struggle to compete with imported products for industrial consumption due to their lackluster quality and high prices, with inefficiency in the production cost and logistics system contributing to such high prices.

"I'm worried that our own products will not be the 'host' in our own country," said Bustanul. "Regarding the impact on farmers, it will be hard to fix if it is already broken."

4. Climate change making matters worse

Extreme weather conditions caused by climate change, such as prolonged droughts and severe floods, have led to crop failures across the country.

Agricultural production could fall 15 to 40 percent due to extreme weather patterns that cause “negative shocks” throughout the agricultural sector, said Bogor Agricultural University (IPB) economic and agriculture expert Hermanto Siregar.

For farmers, losing a harvest season can have serious repercussions on future production, as farmers survive on thin cash flow, meaning a crop failure could leave them without the capital to start anew.

“When the general public see farmers, they only see their products but they don’t understand the process that goes into producing crops. For me, the process is quite challenging,” said Cahyono.

At 110 of 113 countries, Indonesia ranks among the lowest in the natural resources and resilience category of the 2019 Global Food Security Index. The category highlights global food security vulnerability as a result of depleting resources and climate change.

Droughts during the long dry season of 2019 caused the production of rice, a staple food in Indonesia, to drop 8 percent, Bogor Agricultural University (IPB) professor and agricultural expert Dwi Andreas Santosa said.

Around 22 million people in Indonesia endured hunger from 2016 to 2018, showing that the country’s food availability remains low, according to a 2019 report by the Asian Development Bank, the International Food Policy Research Institute and the National Planning Agency (Bappenas).

5. Lack of investment

Investments in agriculture have largely been channeled into palm oil plantations, with only a fraction going to other forms of farming.

Three-fourths of the Rp 313 trillion in investment pledges in 2019 went to the palm oil sector, according to data from the Agriculture Ministry.

Yet the Bappenas study states that the country could end hunger by 2030 through investment in agricultural research and development, irrigation expansion and improving water use efficiency, among other areas.

But attracting such investment has not been easy. “If you are talking about investments by foreigners, I think the challenge is the regulation of foreign investment […] it is very challenging, especially for small and medium enterprises,” Hiroshi Bingo from JICA said.

He said the minimum investment requirement of Rp 10 billion (US$692,501) was a deterrent to foreign investment in agriculture.

6. Pandemic hits farmers harder

Indonesian farmers are facing even more hurdles to stay afloat today with the pandemic weakening consumer purchasing power, while supply chains have been severely disrupted by limited business activities.

The farmers exchange value (NTP), the ratio of farmers’ incomes to their household expenses, has gradually fallen since January and hit rock bottom in May at 99.47, the lowest rate since July last year. The rate was recorded at 99.6 in June. A value below 100 indicates that farmers’ expenses are higher than their incomes.

Galuh Octania, a researcher at the Center for Indonesian Policy Studies (CIPS), said the pandemic had aggravated farmers’ losses because the yields from the current harvest season could exceed demand as people spend less.

The spending power of most farmers has also taken a hit, as about two thirds of Indonesian farmers are net consumers, she added.

This will make it even more difficult for farmers to bounce back. Farmers also struggle with limited land, limited access to financial services and having to sell their produce via middlemen who elongate the supply chain.

They also face weather risks, pest attacks and plant diseases, making returns on their initial investments uncertain, said Bingo from JICA.

“It’s hard for farmers to have the right prices for each market, and also for the market stakeholders. It’s also difficult to determine which farmers have the most potential and capacity to produce good products,” he said.

Future of farming depends on investment

Tisna Rohmat, 33 years old, spoke of his vision for the future of farming during The Jakarta Post’s visit to his family farm in Ciwidey, West Java. Seeing this family of passionate farmers, while rare, shed light on what could be the future of Indonesia’s agriculture sector, if Tisna’s peers followed his lead.

“If you want more young people to farm, you must show them our success stories, surely people will come around, and they will learn what farming is like. So we have to show farming to young people and invite young people to share and have a chat,” said Tisna, beaming with hope.

“There is no job where you can exert as much effort as farming. In farming, the potential is limitless. It all depends on what our capabilities are and how we use our intelligence.”

But for all Tisna’s passion, he needs support. Investment in agriculture must come from individuals, the private sector to the government and NGOs, people involved in the sector say. In a nutshell, it takes a village to sow the seeds for the future of agriculture.

“Increased investment in agriculture to modernize food systems and markets and make them more efficient is key to breaking this vicious cycle,” the Asian Development Bank (ADB) wrote in its 2019 report Policies to support investment requirements of Indonesia’s food and agriculture development during 2020-2045.

“Such investments will not only help improve the country’s food production but will also enable households to engage in more productive sectors and earn better incomes.”

Infrastructure investments in rural roads, electricity, cell phone towers, markets, cold chains and processing facilities should be expanded in partnership with the private sector, the crucial element to this effort, the report states.

The government’s increased investment in expanding irrigation and improving existing systems will increase crop yields and area, while promoting the adoption of advanced technologies, it adds.

Technology to break down barriers, reshape agriculture

Some technology-based companies are bridging the yawning gap between farmers and consumers. The likes of TaniHub and Sayurbox allow consumers to buy fresh produce directly from farmers.

Beyond that, TaniHub’s peer-to-peer lending arm TaniFund allows individuals to lend money to farmers so they can have a source of funds to expand their operations. TaniFund has channeled Rp 82 billion in loans to 1,500 borrowers since its founding in 2017.

Cahyono Kurnia, a 36 years old farmer from Ciwidey, West Java, is a TaniFund borrower who decided to focus on tomato farming to improve his yields. In his 16 years in farming, Cahyono has tried beans, potatoes, spring onions, cabbages — you name it.

Now with 1 hectare of land of his own and another hectare he rents, he feels more confident about his produce, also thanks to TaniHub’s tutor system that allows its field specialists to monitor farmers’ progress.

"Before TaniFund was available, I was hesitant to sell my harvests. I had doubts, as I wasn’t able to estimate my earnings from my crops because prices were unclear. Now, prices have been stable, and I can earn money from good prices,” said Cahyono, a father of two.

Agricultural technology startup Habibi Garden chief executive officer, Irsan Rajamin, said the utilization of internet of things (IoT) technology could be a magnet for millennials and youth to bring them into the agriculture industry.

“Millennials cannot take their eyes off of their phones, even for just an hour, so we just have to make their habits more productive,” he said.

Habibi Garden uses digital platforms and IoT to help farmers. By connecting sensors and irrigation systems in farms to the internet and providing data based on machine learning, Habibi Garden can help farmers monitor and maintain their farms and crops remotely.

Meanwhile, the Indonesia Japan Horticulture Public-Private Partnership Project (IJHOP4) uses blockchain technology to connect farmers with loans and insurance.

In partnership with data exchange platform HARA and local lender BTPN, the government-to-government initiative aims to improve farmers’ financial access and cultivation techniques, optimize local supply chains and facilitate links with modern markets.

"If demands can be met, it will improve the social and economic conditions of thousands of farmers," said Setia Irawan, the CEO of farmers’ cooperative-cum-Islamic boarding school Al Ittifaq, a beneficiary of the Indonesia-Japan partnership.

Demand for the Japanese kuroda carrot variety alone from Al Ittifaq can reach 5 tons per week throughout the year.

Al Ittifaq empowers Islamic boarding school students to cultivate dozens of agricultural product types on its 14 hectares of land in Ciwidey, West Java, an area famous for its ecotourism that is two hours’ drive from Bandung city center.

‘Extraordinary challenge’ but hopes high: Government

Agriculture Minister Syahrul Yasin Limpo knows well that encouraging young people can be an “extraordinary challenge”. But the NasDem party politician has pledged to support young farmers by expanding access to innovations and funding schemes.

In its COVID-19 response, Rp 1.85 trillion from the Agriculture Ministry’s Rp 14.06 trillion budget for 2020 has been reallocated for seed assistance, labor-intensive programs, stabilization of food stocks and prices as well as food distribution and transportation.

The minister said the ministry would continue to develop district-based agricultural counseling centers under the Kostratani scheme to better respond to the needs of farmers, in addition to providing microloans to farmers and seeking to triple agricultural exports.

“I am optimistic that the agriculture sector will thrive and young people today will seize the opportunity. They are a generation that is good at capturing opportunities,” said the minister, a former governor of South Sulawesi.

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