FOOD SECURITY IN INDONESIA SHORT RUN AND THE LONG RUN ISSUES

Introduction

1.     During  the  past  three  decades,  Indonesia  made  remarkable
progress  in  improving  food  security.    Increasing  food  production
during the first three five years development plan of 1969-1984 was
dominated by the effort of achieving self-sufficiency of rice.    The
successful   achievement  of  rice  self-sufficiency  in 1984   has
improved the status of food availability.   The domination of rice in
agricultural  development  was  quite  understood,  since  rice  was
contributed  about  18%  to  Indonesia's  GDP  in  1968  and  shared
more than 30% of consumer budget in urban area. Rice became a
dominant factor to the formation of inflation and placed the prime
attention in the maintenance of economic stability.   Rice was also
poses a strategic role in employment generation for the rural sector.

2.     Until 1996 food policy followed by the Indonesian Government was
oriented  toward  improving  the  nutritional  status  of  population
through  increasing  the  availability  of  food  items.     Increasing
domestic  production  has  been  the  main  instrument  for  the
maintenance  of  sufficient  food  availability,  while  import  was
considered as complementary sources.   Although the share of rice
in the consumer expenditure sharply declines, but rice still dominant
in the carbohydrate's source of the people's diet.   Up to now self-
sufficiency   of   rice   remains   a   national   goal   for   agriculture
development aimed at maintaining food security.

3.    The  development  of  food  supply in  aggregate  terms  indicates  a
progressive achievement, where the energy availability has exceed
3200   kilo   calorie/person/day,   and   this   is   considerably   high
compared  with  other  developing  nation.     However  the  high availability  of  energy does  not  followed  by the  composition  food items in accordance with balance diet principle.   On the other hand the   impressive   aggregate   availability does   not   reflect   the achievement of food security at the household level.

4.     In     1996  Indonesia  for  the  first  time  promulgated  the  food  law
number 7/1996 on food related mater.   The law basically outlined
the basic regulation on food safety and food security issues.   The
formal definition of food security that been adopted by Indonesia is
the  condition  that  food  should  be  sufficient  for  all  household  as
indicated  by  availability  of  food  supply  sufficiently  in  terms  of
quantity  and  quality,  that  food  is  safe,  equitably  available  and
affordable.   The food law no. 7/1996 is enacted since November 4,
1996 prior to the holding of the World Food Summit in Rome.   This
food law has provides the legal basis for food security regulation in the future.

5.     The year of  1997 recorded as the worst food crisis in history of
Indonesia's economic development in the post independence.   The
first half of the year 1997 still dominated by optimism on the stability
of food production as experienced in the previous year of  1996.
That  achievement  resulted  the  amounting  domestic  rice  surplus
available in domestic market where the domestic purchase of rice
by  government  exceeded  2  million  tons.    However  entering  the
second  half  of  the  year  Indonesia  faced  double  disasters.    The
disasters  to  the  Indonesian  economy  are  the  prolonged  drought
which  has  serious  effect  on  food  production,  and  the  monetary
crisis started since the end of July 1997.   The long drought persist
until early  1998 which caused delay of rice planting for the main
crop season and harvesting in the consecutive year.   Therefore rice
production has below the target for two consecutive years of 1997
and 1998.

6.    The  double  disaster  has  worsened  the  food  security situation in
these  two  consecutive  recent  years.    The  insecurity  of  food  in
Indonesia exists in terms of aggregate supply as well as the ability
of the community to access the limited supply of food.   Recent food insecurity
situation in Indonesia has produced an important lesson,
because  it's  also  produced  creative  thought  on  food  security
solution,  where  in  the  past  solely  depend  on  market  oriented
subsidy  and  government's  intervention  mechanism.    This  paper
trying to review the achievement in food security development and
outlines  the  possible  approaches  for  food  security  development
under the free trade regime when the cloud of exchange rate crisis
is over.

Food Security Status: Policy and Progress

7.     Food and nutrition development in the six five year development
plan     (1994/95-1998/99)  have  been  oriented  toward  achieving
certain goals as follows:a. improvement of food security status; b.
Improvement in the Balance Diet of the population as indicated by
the improvement Balance Diet Index  (known as score of PPH  =
Pola  Pangan  Harapan  or  desirable  dietary  pattern)  at  direct
household   consumption   and   aggregate   availability   levels;   c.
achievement of average direct energy consumption by household at
minimum   of 2150   kilo   calorie/person/day   and   the   protein
consumption  of  46.2  grams/person/day,  while  at  the  availability
level are 2500 kilo calorie and protein of 55 grams (40 grams from
plan source and  15 gram from animal source); d. free from food
items  that  dangerous  to  human  health;  e.  better  institutional
supports;  f.  increased  people  awareness  and  understanding  on
nutrition; and g. reduced for basic nutrition prevalence.

8.     To achieve the above-mentioned goals the government adopt five
basic   policy   namely:   a.   improving   food   security   status;   b
Diversification  of  food  consumption;  c.  improving  food  safety
condition;  d.  institutional  development;  and  e.  improvement  of
nutritional status.   Based on this policy three basic programs have
been  adopted  namely:  maintenance  of  food  sufficiency,  food
diversification, and improvement of nutritional status and supported
with several programs related to education, training, extension and research and development.   During this five year development plan, especially up to the year of 1997 has been implemented following the set guidelines.

9.     As   reported   earlier   that   in   aggregate   term   Indonesia   has
accomplished her task to meet the need of the basic food for the
population.   One of the achievement is the improvement in average
energy  availability  has  exceed 3,000  calorie/person/day.     The
energy availability has increased from  2,899 calorie in the end of 1993 into 3,208 in 1996.   In addition the availability of protein has improved  as  well.    Provision  of  sufficient  food  supply  has  been made possible because of increased domestic production couple with  increasing  import  of  all  food  items.    This  effort  has  made possible  for  Indonesia  to  acquire  impressive  improvement  in aggregate food supply.

10.     Judging from supply side, the effort of maintaining absolute food
self-sufficiency, particularly rice, Indonesia has fails to manage it as import  increases.     There  diverge  arguments  on  the  failure  to maintain absolute self sufficiency in rice, ranging from declining rice field, macro policy bias that causes disincentive to rice farming, and the  growing  competition  in  land  utilization  within  the  agricultural uses  themselves.    On  the  other  hand  the  record  on  food  trade balance appears with different story, where Indonesia has enjoyed continues surplus trade balance for food since 1983 and still gains favourable aggregate surpluses even this day.

11.     During the period of  1990-1998 rice import is increasing and the
average quantity of import is 794,408 matrix ton.   Other basic food
items  have  also  increased  with  the  same  trend.    The  average
annual imports for other food commodities are: corn  470,000 mt,
soybean  607,000 mt, wheat  2,883,000 mt and sugar  553,000 mt.
On the other hand the food trade balance during  1990-1997 has
increased with the amount annual average surplus of trade balance
for all food items amounted to more than 1,775.5 million US $. This
contradiction  indicates  that  food  sector  has  increasingly  poses
competitive strength, however cereal production is not necessarily to be forced into absolute sufficiency.

12.     This  split  trend  between  absolute  sufficiency and  monetary food
trade balance has invites a big debate in formulating food security
policy  for  the future, whether  Indonesia should fight for  rice self
sufficiency or neglect it.   The sixth National Workshop on Food and
Nutrition held in  1998 has recommended the new approach that
food security is the prime objective and self reliance is the way to
achieve  it.    Self  reliance  has  allow  some  flexibility  in  managing
domestic  production  and  the  maintenance  of  sufficiency  in  food
supply and provided with row for healthy competition in resource
utilization as well as the achievement of food diversification.

13.     The number of people experiencing the undernourished status also
declined significantly in terms of proportion to the total population
and in absolute number.   The most promising feature is the result
that distribution of food consumption is more even as compared to
the income distribution, hence income inequality do not appear as
the  barrier  to  the  improvement  of  nutritional  status  (Jatileksono,
1997).    This  study  also  reported  the  progress  of  food  security
development as evaluated from the perspective of the risk of being
fall  into  food  insecurity  situation  using  the  aggregate  household
food security index introduced by FAO.    In fact the progress on
nutritional  status  has  placed  Indonesia  into  the  group  of  highly
secure  country  in  terms  of  aggregate  food  security  index  as
reported by FAO (1996).   The improvement of the nutritional status
of the population has been the direct impact of poverty reduction
from 70 million people in 1970 into 27.2 million in 1990.   The farther
reduction of poverty incidence has gone down as far as 22.5 million
in 1996  or  11% of the population before worsened back due to
recent economic crisis.   The lessons from Indonesia's development
also support the argument that poverty is the prime caused of food
insecurity.

The number of urban household experiencing undernourished has
declined from 44 % in 1984 into 20.40 in 1996.   On the other hand
seems   to   have   a   slower   progress   in   the   reduction   of
undernourished   people,   where   during   the   same   period   the
percentage  of  undernourished  household  declined  from  37  % to
23.2    %.  This  calculation  has  include  the  estimate  of  food
consumption  outside  the  house    (Jatileksono,    1997).    Nutrition
experts usually only considered the real observable consumption in the household for accuracy purposes.

15.     Surprisingly  up  to     1996  the  evidence  of  energy  inadequacy  or
energy deficiency is dominant in Java that has well known as the food surplus's regions.   Being the food producing regions East and Central  Java  have  dominated  the  feature  of  energy  deficiency similar  to  what  happening  in  Nusa  Tenggara's  provinces.    The explanatory factor to the heavy incidence of undernourished in the situation of plenty supply is the poverty incidence.   This argument is confirmed by the evidence of vocational distribution of poor family within the region, where the locations with poor resources are suffer more than the other part.

16.     The progress on improving food security during the last decade is
actually contributed by two important factors, firstly increased food
availability resulted from increased domestic production and import
of  wide  range  of  food  items,  and  secondly increased per  capita
income coupled with speed poverty reduction.   However in macro
terms  the  burden  of  the  country  on  maintaining  food  availability
remain  unease,  since  population  growth  remains  positive  and
caused continues growth in food demand.   Rice as the main staple
food economically has become less important to macro economic
consideration as per capita consumption started to decline and its
share  the  consumer  expenditures  become  smaller  made  it  less
sensitive  to  inflation  formation.    The  Central  Bureau  of  Statistic
(CBS) has reported that direct household consumption for rice has
consistently  decline  over  the  three  periods  of  national  socio
economic survey in 1990 (118.14kg/cap), 1993 (116.38kg/cap) and 1996 (111.49kg/cap).

17.     The concept of food security adopted in the food law no 7/1996 is
basically consistent with the principle of self reliant adopted in the
Rome  Declaration  of  the  1996  World  Food  Summit.    The  law
basically  considers  that  food  is  fundamental  human  right  having
strategic position in human resource development, that it should be
safe, better quality, sufficient in quantity and variety oriented for the
welfare of the community, and food should be viewed as traded
commodity.    On the food security matter the law also provide a
basis  for  national  food  reserve  that  are  consists  of  government
reserve and community reserve.    The government is obligated to
promote  community  base  food  reserve.     Over  the  last  three
decades of food price stabilization policy the orientation only limited
to stabilizing market prices and do not involve directly in addressing
food  insecure  group.     The  enactment  of  this  food  law  is  an
important  step  in  the  development  of  institutional  support  to  the
food system.

18.     Before   embarking into other section the high light of the status of
food security development up to the period of the economic crisis
come can be summarize as although there are significant increased
in  food  availability  and  improved  the  aggregate  household  food
security  status,  the  number  of  undernourished  people  are  still
relatively high.   Rice self sufficiency facing a severe challenges to
maintain it, but economically Indonesia shows stronger in managing
food trade balance surpluses.   This suggest that sufficiency is no
longer the sole determinant for food security improvement.   Rising
income and more opening up economy will suggest greater variety
of people diet.

The Impact of Double Disasters

The rice production has enjoyed a high growth in the year of 1995
and    1996  when  recorded  increase  of    6.65    %  and  2.76  %
consecutively.   This impressive brought rice production exceed the
trend required to maintain on trend self-sufficiency.   However due to
heavy drought in the second half of  1997 rice production felt by
3.64% and the impact was even longer until the early quarter of
1998 which caused 2-3 months delay in planting of the main crop
season  of  1997/98.    It  caused  the  forecast  for  1998  production
down  below  the  1997  level,  earlier  forecast  indicated  that  1998
production only slightly lowering down by 2.45%. But as the second
harvest was not quite successful the second forecast is even worst
indicated that the production is expected to decline further by 6.4%.

20.     The rice situation in 1997 was considerably abnormal, since the first
half of the year the optimistic feature there.   This was indicated by
the  performance  domestic  procurement  by  BULOG  exceeded  2
million ton, but during October-December rice price increased about
10-15% in a very short period and another increase experience in
the  next  first  quarter  of 1998. Using  the  production-supply-
consumption-stock movement reported by CBS (1998) indicate that
the carry over stock in the community by the end of December 1997
was only 1. 19 million ton or two weeks consumption.   In the normal
year the average stock during the off-harvest season about  1.5 x
monthly  consumption,  hence  the  government  market  injection
needed to stabilize market price only about  10-15  % of monthly
consumption.

21.     The situation in the first half of 1998 is worst as the forecast of rice
production  seriously  decrease  due  to  late  planting  and  lower productivity.   The situation may be the worst during the post 1984, where net production-consumption balance is deficit.   Over many years  there  are  a  margin  to  cover  stock  replenishment  and additional  demand  for  new  households  and  expansion  of  rice trading activity

The  total  rice  supply  through  out  the  year  of     1998  seems
considerably sufficient, although December-January will be many
big event related to Christmas and New Year, Idul Fitri and Chinese
new year.   This optimism is based on the forecast for ending stock
of  more  than 6  million  tons  will  be  sufficient  for  two  month
consumption before the fresh rice from main crop harvest enter into
the  market  in  late  February 1999.    The  weather  forecast  also
indicated the rainfall will above the normal days, hence people are asked to prepare for the possible damage cause by the existence of LA  NINA  this  year.     Therefore  the  macro  rice  situation  is considerably will be no much problem, but micro level there are still many obstacles to be confronted by the government if household food security is the prime concern.

23.    In the short run there are three principal food security challenge
faces by Indonesia, these are:
to ensure that adequate supplies of food are available, through domestic production and trade, to meet the national needs;
to protect the food consumption of the poor  (food affordability challenge); and
to  reduce  the  volatility  of  availability  at  the  household  and national level.
The  three  objectives  are  inter  related  and  required two pronged strategy at macro and micro level to give the instrumental inputs to the maintenance of peaceful situation at the grassroots level.

24.     Looking from different angle, more specifically from accessibility of
the people there are some factors constraining them to access the available food supplies.   Negative economic growth during this year coupled with the collapse of the private banking sector has brought significant  effect  on  unemployment  in  urban  areas.    At  present many reports are estimating that the number of unemployment has reached nearly 17 million.   The urban poor and poor family in Java is suffering more than those are in outside Java.   This partly due to the nature of the economic activity, those who involve in the export oriented  agribusiness  are  gaining  from  the  rupiah  crisis.     The increasing number of unemployed worker has significant effect on jobs availability in the urban sector.

25.     The  data  on  the  household  condition  organized  by  the  National
Family Planing Board also indicated that the number of the poorest
family (Pra Sejahtera) has increased due to recent economic crisis.
The total number of household falls into category of poorest (KPS)
are 7.998 million households and the poor (Sejahtera 1) are 9.478
million  households,  make  in  total  of 17.476  million  households
(BKKBN,  August-Sept  Report).     The  CBS  estimate  on  poor population at present is nearly  80 million people.    Both data are match each other and complementary in identifying the poor.   The BKKBN  data  provide  individual  household  list  on  the  status  of household, although there are different approach in identifying the poor.     However  it's  still  lack  of  capability  in  identifying  urban citizenshipless that are not in the list of poor family.

26.     In   approaching   the   food   insecurity   situation   Indonesia   has
developed a Food and Nutrition Surveillance System (FNSS) which
was  originally  implemented  in  the  areas  facing  hunger  and
malnutrition.   Since 1994 the system has been adopted as a part of
improving the effectiveness of food insecurity monitoring system.
This system is basically consists of three sub-system namely  (i).
production  and  availability  surveillance  sub-system    (MOA);    (ii).
distribution surveillance subsystem (BULOG); and (iii). consumption
and nutrition sub-system (MOH).   This team coordinated by Ministry
of Food and Horticulture (MOFH).   The system has able to identify
the food insecure areas base on three basic category of the record
in production failure, existence of food shortage and the evidence of
undernourished.    However  this  approach  does  not  provide  any
information  concerning  the  list  of  household  facing  the  famine
threat.   For the purpose of improving the effectiveness in targeting
the  on  household  has  adopted  in  monitoring  the  food  security
situation.


Policy for Confronting Food Crisis

27.     The economic crisis has brought Indonesian sign a moratorium as
economic  policy  reform  package  with  the  International  Monetary
Fund for securing foreign loan and assistance.    One importance
aspect  under  the  moratorium  is  the  liberalization  of  several
marketing board for food commodities and schedule for reduction of
subsidy.     Starting  from  November 1, 1997  schedule  for  trade
liberalization has been made among others are:
(i).     Dismantling monopoly of food importation for sugar, wheat
grain,  corn,  feeds  and  soybean.     The  govermnent  has
consistently implementing this program and to some extend
has been done faster than it's schedule.   The completion of
full trade liberalization was done on September 1, 1998.
(ii).     BULOG still responsible for importing rice and distribution to
the market, however some new arrangement has been made
by   the   Reform's   Government   in   performing   better
transparency on rice importation.   At present importation of
rice  by  the  private  sector  is  allowed  for 6  months  period
starting September 1998.
(iii).    Ban  on  export  of  subsidized  food  items  to  avoid  supply
shortage  in  domestic  market.    This  policy  considered
important during the situation where sharp price differential between  domestic  and  neighbouring  country  exists.    This policy  will  automatically  relaxed  when  exchange  rate  of rupiah has come to its parity value.
(iv).    In  view  of  securing  the  second  rice  crops  of     1998  and
1998/99  main  crop  the  government  has  right  off  the
outstanding loan of farm credit, keeping fertilizer subsidy and
expanding  the  absorption  of  farm  credit. In  addition
government through MOH has organized an accompanying
program  for  increasing  food  production.      About 5,000
students  and  university  graduates  has  been  recruited  and currently living in the field with the farmer.
28.     In   coping   with   shortage   and   food   insecurity   problem   the
Government of Indonesia has introduced new distribution package
of rice for the poor households.   Starting on July 1,  1998 at pilot
scale  the  special  rice  sale  to  the  poor  household  has  been
implemented in Jakarta Metropolitan Province and the Suburb of
Bogor, Tangerang and Bekasi.    Starting August  1, this year  the
operation  has  been  expanded  into  53  districts  scattered  in 15
provinces those are facing potential food insecurity.   And starting October this year the operation is expected to cover all the poorest household all over Indonesia.    The province of East and Central Java who have the highest rank in the number of poor household has  started  to  do  the  special  sales  operation  and  reported  very successful compared to other region.

29.     The  special  rice  sale  serve  as  the  base  for  addressing  the
potentially food insecure group, where each family only eligible to buy 10  kilograms  of  medium  quality  of  rice  every  month  at subsidized price of Rp. 1,000.00. The rice is provided by BULOG down into the village area or distribution point that are agreeable by the parties concern.
The local government act as the leader in special rice sale, while
the family planing officers responsible for providing the list of the
household eligible for special rice sale.    The idea of the sale is
basically an embryo for developing such food stamp network.   This
new scheme has been considered as an instrument for targeting
the  subsidy.     One  important  feature  of  this  new  scheme  is