THE MARKET POTENTIAL FOR AGRICULTURAL MACHINERIES, TOOLS AND EQUIPMENTS IN INDONESIA
Despite the fact that the industrialization process has rapidly proceeded in Indonesia during the last three decades, agriculture remains the country’s leading economic sector and will remain one of its major economic pillars and contributors to the overall growth. In 2003, the agricultural sector contributed nearly 16% to the country’s GDP and involved 37 million people out of a total number of 98 million labor force. With a total population of 215 million, the fourth most populous country in the world, the objective and focus of the government in agricultural policy is to maintain food security and promote efficient production, processing and marketing of agricultural products.
Out of the country’s 190 million hectares territory, around 130 million may be considered potential for agricultural development and out of which nearly 10% or 13 million hectares are agricultural land cultivated and concentrated on the main islands of Java, Madura and Bali, which are domiciled by around 80 million people, approximately 60% from Indonesia’s total population. Meanwhile, only 22% of the potential agricultural areas outside Java, Madura and Bali have been utilized and cultivated, which shows that on one side there has always been an imbalance in the development of the potential agricultural areas within the country and on the other side the potential to develop agricultural projects in the other outer islands are still widely open.
The national agricultural system involves many small-scale even micro economic undertakings, especially those in the process of cultivation and production of food crops and horticulture. This system constitutes the weakest link of the country’s economic chain. Marking such condition are low agricultural and food crops productivity, high percentage of poor farmers and under employment and low added-value of agricultural and food crops enjoyed by farmers. Efforts have been made to establish an integrated agricultural and food crops development program by including supporting economic sectors and activities such as credit schemes, technology and information development and institutionalization of farmers’ community as well as efforts related to programs of food diversification and genetic engineering.
The agricultural sector development in Indonesia covers food crops, horticulture, plantation estates and animal husbandry. Food crops cover the cultivation, production and processing of paddy or rice, cassava, sweet potato, corn or maize, soybean and ground nut. Rice, the major food crop produced and consumed in the country, is mainly cultivated in Java. Although decline of productive paddy fields on the island of Java has been registered in recent years due to land conversion and for other purposes, the production of rice has increased steadily despite the import necessity; the increase in the rice production is attributable to higher productivity and extensive harvest area. With few exceptions such as for soybean and corn, other food crops production has registered an increase in the production similar to the rice production figure.
Horticulture consists mainly of the cultivation, production, processing and marketing of various vegetable and fruit products such as onions, shallots, cabbage, carrot, potato, oranges, mango, papaya, banana, avocado, cashew nut, pineapple, and guava. The horticultural development, however, is very weak especially in the field of research and development of biotechnology, the overall management obstacles as well as financing problem. Following the lifting of import restriction, this agricultural sub-sector is now facing serious competition especially from imported fresh fruits such as apples and oranges.
The plantation estate in Indonesia is divided into large-scale plantations and smallholdings. Major crops are coffee, tea, cocoa, coconut, oil palm, clove, pepper, which are also called perennial crops and seasonal crops such as tobacco, sugarcane, ginger and jute. Oil palm and cocoa plantations have emerged as Indonesia’s major export commodities and replaced “traditional” plantation export commodities such as rubber, coffee, tea coconut and tobacco. Cattle and poultry industry compose the animal husbandry sub-sector in the country; standard of living and purchasing power determine pretty much the consumption pattern of the consumers and poultry meat for the Indonesian people is much preferred and more affordable as compared to the cattle products. The poultry industry is categorized into two major groups, e.g. the integrated, large modern poultry industry, mostly foreign-owned and related to animal-feeding, breeding and processing activities and the traditional poultry industry, utilizing traditional, local methods in poultry farming.
During the last decade, however, Indonesia has become a large importer for quite a substantial number of agricultural products, starting from rice, soybean, sugar, corn to fresh fruits. This has partly been a result of shrinkage in productive agricultural areas, low productivity and efficiency and partly also due to failure to modernize or revitalize agricultural undertakings; for instance, not only are the machineries and equipments of the Indonesian sugar industry, obsolete, since these factories have been set up during the Dutch colonial time and never been up-graded or modernized ever since, the sugarcane plantations have also never been revitalized in respect of re-planting with new seedlings, harvesting techniques and plantation management, which consequently have resulted in low productivity and efficiency. Soybean is another example of how an agricultural commodity, used to be produced sufficiently in the country, becomes an import commodity for Indonesia. Drastic shrinkage of soybean plantation acreage has caused a disparity in the supply-demand relation; soybean production output drastically decreased because of drastic decrease of soybean plantation acreage and simultaneously, the increase in population growth demanding soybean as “cheap” agricultural commodity can no longer be balanced; additionally, the soybean farmers have less interest to grow this agricultural commodity, since there is no incentive available apart from the fact that in many cases they will have to produce soybean at a loss price, a situation caused by the structure of how they grow this commodity, e.g. small-scale, causing lack of economies of scale and low productivity and efficiency.
By understanding the profile of the Indonesian agricultural industry, it is obvious that the development of the Indonesian agricultural tools, machineries, and equipments are heavily oriented towards the development of the existing cultivation, production and processing methods and techniques of major food crops and horticulture sub-sectors. The level of technology and know-how of such machineries and equipments are of middle-level technology and indeed, the machineries and equipments produced domestically are relatively simple and not sophisticated such as shovels, picks, hoes and rakes, ploughs as well as tractors and various types of pumps. There is no doubt that by improving the standard of technology level of such machineries and equipments, the result of cultivating, producing and processing such agricultural products will also improve and be more efficient and productive.
Out of the country’s 190 million hectares territory, around 130 million may be considered potential for agricultural development and out of which nearly 10% or 13 million hectares are agricultural land cultivated and concentrated on the main islands of Java, Madura and Bali, which are domiciled by around 80 million people, approximately 60% from Indonesia’s total population. Meanwhile, only 22% of the potential agricultural areas outside Java, Madura and Bali have been utilized and cultivated, which shows that on one side there has always been an imbalance in the development of the potential agricultural areas within the country and on the other side the potential to develop agricultural projects in the other outer islands are still widely open.
The national agricultural system involves many small-scale even micro economic undertakings, especially those in the process of cultivation and production of food crops and horticulture. This system constitutes the weakest link of the country’s economic chain. Marking such condition are low agricultural and food crops productivity, high percentage of poor farmers and under employment and low added-value of agricultural and food crops enjoyed by farmers. Efforts have been made to establish an integrated agricultural and food crops development program by including supporting economic sectors and activities such as credit schemes, technology and information development and institutionalization of farmers’ community as well as efforts related to programs of food diversification and genetic engineering.
The agricultural sector development in Indonesia covers food crops, horticulture, plantation estates and animal husbandry. Food crops cover the cultivation, production and processing of paddy or rice, cassava, sweet potato, corn or maize, soybean and ground nut. Rice, the major food crop produced and consumed in the country, is mainly cultivated in Java. Although decline of productive paddy fields on the island of Java has been registered in recent years due to land conversion and for other purposes, the production of rice has increased steadily despite the import necessity; the increase in the rice production is attributable to higher productivity and extensive harvest area. With few exceptions such as for soybean and corn, other food crops production has registered an increase in the production similar to the rice production figure.
Horticulture consists mainly of the cultivation, production, processing and marketing of various vegetable and fruit products such as onions, shallots, cabbage, carrot, potato, oranges, mango, papaya, banana, avocado, cashew nut, pineapple, and guava. The horticultural development, however, is very weak especially in the field of research and development of biotechnology, the overall management obstacles as well as financing problem. Following the lifting of import restriction, this agricultural sub-sector is now facing serious competition especially from imported fresh fruits such as apples and oranges.
The plantation estate in Indonesia is divided into large-scale plantations and smallholdings. Major crops are coffee, tea, cocoa, coconut, oil palm, clove, pepper, which are also called perennial crops and seasonal crops such as tobacco, sugarcane, ginger and jute. Oil palm and cocoa plantations have emerged as Indonesia’s major export commodities and replaced “traditional” plantation export commodities such as rubber, coffee, tea coconut and tobacco. Cattle and poultry industry compose the animal husbandry sub-sector in the country; standard of living and purchasing power determine pretty much the consumption pattern of the consumers and poultry meat for the Indonesian people is much preferred and more affordable as compared to the cattle products. The poultry industry is categorized into two major groups, e.g. the integrated, large modern poultry industry, mostly foreign-owned and related to animal-feeding, breeding and processing activities and the traditional poultry industry, utilizing traditional, local methods in poultry farming.
During the last decade, however, Indonesia has become a large importer for quite a substantial number of agricultural products, starting from rice, soybean, sugar, corn to fresh fruits. This has partly been a result of shrinkage in productive agricultural areas, low productivity and efficiency and partly also due to failure to modernize or revitalize agricultural undertakings; for instance, not only are the machineries and equipments of the Indonesian sugar industry, obsolete, since these factories have been set up during the Dutch colonial time and never been up-graded or modernized ever since, the sugarcane plantations have also never been revitalized in respect of re-planting with new seedlings, harvesting techniques and plantation management, which consequently have resulted in low productivity and efficiency. Soybean is another example of how an agricultural commodity, used to be produced sufficiently in the country, becomes an import commodity for Indonesia. Drastic shrinkage of soybean plantation acreage has caused a disparity in the supply-demand relation; soybean production output drastically decreased because of drastic decrease of soybean plantation acreage and simultaneously, the increase in population growth demanding soybean as “cheap” agricultural commodity can no longer be balanced; additionally, the soybean farmers have less interest to grow this agricultural commodity, since there is no incentive available apart from the fact that in many cases they will have to produce soybean at a loss price, a situation caused by the structure of how they grow this commodity, e.g. small-scale, causing lack of economies of scale and low productivity and efficiency.
By understanding the profile of the Indonesian agricultural industry, it is obvious that the development of the Indonesian agricultural tools, machineries, and equipments are heavily oriented towards the development of the existing cultivation, production and processing methods and techniques of major food crops and horticulture sub-sectors. The level of technology and know-how of such machineries and equipments are of middle-level technology and indeed, the machineries and equipments produced domestically are relatively simple and not sophisticated such as shovels, picks, hoes and rakes, ploughs as well as tractors and various types of pumps. There is no doubt that by improving the standard of technology level of such machineries and equipments, the result of cultivating, producing and processing such agricultural products will also improve and be more efficient and productive.
posted by Zumrowi Yunus at
3:16 PM
0 Comments:
Post a Comment
<< Home