7 - Challenges in Increasing Food Production in Indonesia (1968)

Summary

Introductory Note: In 1968 the Indonesian economy was in a state of transition which was of great significance for the period to come. In coping with the economic chaos inherited from the past, the government embarked on a course to stabilize and rehabilitate the economy. The major cornerstones of the stabilization and rehabilitation programme were: (1) to put order in our own house through fiscal and monetary measures, (2) to rely more on sound economic principles by providing greater freedom and more incentives; and (3) to re-establish sound economic relations with the rest of the world.

In implementing the stabilization and rehabilitation programme, we needed to know more about the demand and supply of rice in the Indonesian economy. With huge imports of rice, slow progress in food production, and rising food prices, the government and the general public have taken an increased interest in the food problems of the country. This workshop was a reflection of that interest.

At the initiative of the chairman of the Lembaga Ilmu Pengetahuan Indonesia (LIPI or the Indonesian Istitute of Sciences), Professor Sarwono Prawirohardjo, a Workshop on Food was organized. He invited the National Academy of Sciences of the USA to participate at the workshop and asked me to deliver the keynote address in the workshop, which took place in Jakarta in May 1968.

Increased food supply from domestic production is a prerequisite for long-term economic growth. Unless there is a substantial increase in food production, there will be a continued drain on foreign exchange to import food and a continued threat of inflation led by upward pressures of food prices. Major increases in food production is the top priority in the Five Year Plan which is currently under preparation.

The food production strategy as presently envisaged consists of a number of elements: Foremost is the creation of an economic climate which will make it profitable for farmers to use increased quantities of modern inputs. Also, to make sure that these new inputs — fertilizers, pesticides, and improved seeds — will be available at the farm level at the right time and right prices. Within this longer-run framework, it is important to choose the short-run courses of action.

In the short run, emphasis is placed on the availability of improved seeds — particularly the new rice varieties — chemical fertilizers, pesticides, and irrigation water.