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KADIN INDONESIA

Indonesian Chamber of Commerce and Industry

KADIN INDONESIA

Indonesian Chamber of Commerce and Industry

Alternative National Rice Policy

Kadin Indonesia held an FGD with the topic "Efforts to Increase Food Security Through Strengthening National Rice" on Tuesday (22/8/2023).

Tujuan FGD ini antara lain :
1. Provide input to the government on improving food security through strengthening national rice that can improve the welfare of rice farmers, provide affordable rice for consumers and also improve the performance of the rice industry.
2. Discuss breakthrough steps to increase national rice production that supports food security and improves the welfare of rice farmers.

Rice is a staple food for the people of Indonesia that has a strategic role because it is still the main source of carbohydrates in Indonesia, its contribution is relatively large to food crop GDP and inflation rate.

The production of rice commodities for the 2018-2022 period has not experienced a significant increase, even though Indonesia's population has experienced a continuous increase and is still higher than the rate of decline in per capita rice consumption that has occurred recently. Therefore, the national rice demand still has an increasing trend.

Some of the important problems faced by the national rice sector are: Land conversion of rice growing areas, declining interest of the younger generation to become farmers, limited infrastructure and production factors, relatively low welfare levels of rice farmers, and fluctuations in grain and rice prices.

Land productivity and rice factory efficiency will be realised if national rice production can be increased, where increased production is needed so that rice farming and the rice industry remain strategic and become more sustainable, through :
- Intensification: by applying a series of innovations/biotechnology. Indonesia's rice productivity needs to be increased to be at least 25 per cent higher than the productivity of other ASEAN countries.
- Extensification: in two ways, firstly agro forestry activities. The area of Indonesia's forests that can be utilised is still relatively large, so it can be used to open new paddy fields. Secondly, optimising the use of food estate areas that are suitable for rice cultivation. Both of these can encourage some farmers/farm labourers in Java and other densely populated islands to migrate to other islands, so that the distribution of rice planting areas becomes better/not concentrated in Java.

Prices are a counterweight to demand and supply and should therefore be left to market mechanisms, especially in the premium quality rice market segment, which is consumed by middle-high income earners. Through this, farmers will receive relatively high grain prices.

For other segments of the rice market, a relatively stable price that is within the reach of low-income consumers is needed. SOEs can collaborate with the private sector to keep the price of medium-low quality rice stable and affordable while still being profitable for rice farmers.

In striving to strengthen the national rice industry, farmers will certainly not be able to work alone, it requires the role of all stakeholders in it. Development in agriculture is the duty and responsibility of all Indonesians because food is a matter of life and death for a nation and the agricultural sector is the spearhead of the progress of the Indonesian nation in determining the level of welfare of its people.

Responding to challenges in efforts to improve food security through strengthening national rice, it is necessary to formulate alternative national rice policies, so that these policies can encourage the realisation of a competitive rice supply chain with a balance of roles among supply chain actors.

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KADIN INDONESIA

Indonesian Chamber of Commerce and Industry