Development in the agricultural sector is carried out through a strategy
that Is aimed at Increasing optimum benefit of domestic resources, extending
agricultural development spectrum through technological diversification,
resources, production, and consumption, improving the application of local
and applicable agricultural technology engineering and improving agricultural
production containing science and technology with high competition.
The reform occurred in every sectors and reached Its momentum on May
1998. Thus, the agricultural development approach should be improved in
accordance with the reform spirit which has spread out throughout the countries.
In relation with the spirit, to realize the mission and vision of the agricultural
development, eight reform agendas have been formulated, including endeavors
to make the agricultural sector the main supporting sector of the national
economy through improvement of productivity, efficiency, and quality; as
well as to make the agricultural sector take sides with the farmers and
fishermen as a subject of development to empower and improve their self-reliance.
Policy reform in product market is directed the Indonesian agricultural
product could anticipate trade liberalization. Several steps have been
taken, among other things: (a) to permit private importers to import rice
commencing on September II, 1998; (b) to give vast opportunities to cooperatives
and non-government organizations (NGO) to participate in foodstuff
The implementation of agricultural development concept, strategy, and
policy in the Reform Era is in the form of development programs. The programs
in short and medium-term development are focused on three main subjects.
I.e. (a) to improve food fortification; (b) to develop people's economy
(farmers and fishermen), and (c) to increase export and import substitution.
The concept of Gema (Self Reliance Movement) is used as a means to mobilize
support from various related parties in the form of planner level whether
in the central office or in regional offices until its operation on the
Since the fiscal year of 1998/1999, three Gemas and one fishery export
enhancement have been launched, i.e.:
1. Gema PaLagung 2001: i.e. Self Reliance Movement to increase
rice, soybean, and corn production to attain self-sufficiency in 2001.
2. Gema Proteina 2001: i.e. Self Reliance Movement to
increase animal protein production by the year 2001.
3. Gema Hortina 2003: i.e. Self Reliance Movement to increase
national production of tropical horticulture by 2003.
4. Protekan 2003: i.e. a Program to increase fishery products
for export with the target of export value of US$10 billion in the year
The effort to increase production through Gema and development programs
have shown satisfactory results. Rice production in 1998 reached 48.5 million
ton of dried hulled rice. that meant an increase of two million ton, compared
to that of the Second Projection of the Central Bureau of Statistics before
Gema Palagung was launched in July 1998.
Corn production in 1998 reached 10.06 million ton of dried peeled corn.
an increase of 14.7% as a result of extensification of harvest and productivity
areas by using superior and hybrid quality seeds. In 1998, the area of
corn field reached 3.8 million hectares with the productivity of 2.62 tons
Presently. 58 varieties of food crops and horticulture have been produced,
and 37 of them have been released, and 21 are still under preparation to
be released to support Gema Palagung 2001 and Gema Hortina 2003.
To anticipate production crisis in animal husbandry sector . in 1998
efforts have been taken to develop the production of broilers chicken,
duck. goat/sheep and cows by empowering husbandry small-holders known as
Self-Supporting Protein Production (Gema Proteina 2001). Cattle was chosen
for breeding, because a great part of meat consumption in 1994 came from
cattle's. 36.6% from broiler chicken, 21.5% from traditional chicken meat.
23% from beef. and 7% from sheep/goat meat.
Fishery infrastructure has also been improved through rehabilitation/development
of 18 Fishery Ports. 40 Fishery Landing Places, I School of Fishery. I
Fishery Academy. I Fishery Higher Learning Education. I Fish Catching
Development Center, and I Fishery Training Center. In addition, efforts
have been taken to develop fishponds in 10 provinces: to rehabilitate 5,650
hectares of fishpond canals. agro-input assistance granted to 1,475 hectares
of pilot projects area, and 35 units of demponds.
In the agribusiness sector, development activities have been changed
from production oriented in to rural agricultural development orientated.
In line with aforementioned, a number of endeavors have been carried out.
among other things, the formulation of the Indonesian National Standard
(SNI) for agricultural products and its socialization to the business world:
the development of 116 business groups as founders of cooperatives on the
Central of High Quality Commodity of Agribusiness and identification of agribusiness investment
potential throughout Indonesian.
In addition, the fostering of farmers is directed to increase their
income through P4K for low Income Farmers Group (KPK). Presently there
are 47,874 KPK, and 37,341 of them in 12 provinces are still active in
Phase II of P4K. From 88,866 Collective Business Plan (RUB) arranged by
KPK, 84,347 RUB have received credits amounted to Rpl38.7 million.
The mission of forestry and plantation development is set as follows:
a.To realize and guarantee forestry
and plantation resources through determination of forestry,
plantation, and natural preservation areas, covering land and water conservation,
to ensure the availability of resources so that it could support economic
capability, social, and cultural resilience and preservation of
b. To implement the management resources of forestry and
plantation and natural conservation areas in accordance with forestry
and plantation human resources as well
as to guarantee the opening of social participation and resources management
c. To prevent the increase of critical land and to
rectify degraded land function by way of social and environment oriented
rehabilitation and regeneration of forest and plantation:
d. To ensure a Just and equitable distribution of forest
and plantation resource.
The restructuring policy is regulated by Government Regulation No. 6
of 1998 on Forest Concession Rights (HPH) and Rights of Forest Product
Retribution on Production Forest, which limits maximum size of HPH by a
company. This policy is directed in such a way so as to ensure a sustainable
forest management and to, bring benefit the people. The long-term target
is aimed at enhancing the people's participation in cooperatives , small
and medium enterprises, and religious institutions , as well as traditional
groups, by reducing the roles of the government and big enterprises.
Alternative Financial Institution
Forestry and plantation are considered to be dependable sectors to
attract investment. Nevertheless, up to present time there are no the financial
institutions which focus their activities on financing forestry and plantation
sectors Commercial banks are very selective in granting loans and this
is not in line with the corporate culture of in the forestry and plantation
business. The corporate culture of this business is very specific which
is relatively long-term investment and is very much dependent on climate.
Therefore, high interest loan is not favorable for investment in this sector.
Due to this fact the Ministry of Forestry and Plantation has pioneered
the establishment of Alternative Financial Institution. In this relation,
the President has approved the formation of a financial institution with
special duty which is to fund investment in the forestry and plantation sector.
State-Owned Forestry and Plantation
To solve the problems of former Forest Concession Rights working areas
it is deemed necessary to establish a business institution that can insure
harmonious interaction between the economic, social, and cultural, and
ecological aspects. In addition, forestry and plantation business institutions
can any longer rely on the rent seeker pattern. Business institution having
the role and function as agent of development pioneer in forestry and plantation
enterprises is very much in need.
Thus, the Government will establish a new enterprise in the form of
public corporation (perum) or service corporation (perjan) in the forestry
and plantation sector, whose main task is to carry out rehabilitation of
former Forest Concession Rights areas and other related social task. As
well as to facilitate the development of smallholder plantation, mainly
to enhance production and productivity quality.
Land Grant College (Forest Concession
Rights with the Purpose of Education and Training)
Considering the existing potential, and noting the successful implementation
of these programs in other countries, the Ministry of Forestry and Plantation
will pioneer an implementation policy on Land Grant College (LGC), or Forest
Concession Rights with the purpose of education and training. This policy
will be directed to improving human resources capability and developing
science and technology in the forestry and plantation sector. To these
points, the role of Institute of Education and Research and the Higher
Learning Institution must be improved and established.
Nowadays, the policy of LGC will be carried on in more than 30 higher
learning institutions with the area ranging from 40,000 to 100,000 hectares.
On this phase, the higher learning institutions are expected to be able
to develop education and research programs, especially in forestry plantation
sectors so as, to Improve the local human resources. To speed up implementation
of the phase, an independent executive institution will be established
to select, monitor and evaluate forest or plantation land that has been
granted for the land grant college scheme.
Levy and Grant
The other policy step to improve human resources and science and technology
in the forestry and plantation sectoi is through levy and grant package.
This must be implemented in anticipation of the free trade in the globalization
era and preparation of the ecolabelling in the year of 2000, as well as
to enhance the competitiveness of our products.
Law and Regulation
In this Reform Era, demand for recognition of customary laws is increasing.
For the sake of the reform, this demand must be considered. Presently Law
No. 5 of 1967 is undergoing improvement to accommodate efforts to empower
people and recognize customary law in forest management. In general, this
endeavor is aimed at accommodating aspirations of new paradigm in forest
Abolishment of Corruption, Collusion,
and Nepotism (KKN)
In the framework of abolishing Corruption, Collusion, and Nepotism
practices, the Ministry of Forestry and Plantation has established a Team
against Corruption, Collusion and Nepotism. The team is established based
on Decision of the Minister Coordinator for Development Supervision/State
Administrative Reform No. 64/KEP/MK.Was.PAN/12/1998
on December 3, 1998; and as implementation of Decree of Special Session
of the People's Consultative Assembly No. XI/MPR/1998, especially on Article
4. In relation with the implementation of Corruption, Collusion, and Nepotism
abolishment mentioned above, several steps have been taken, namely:
a. To conduct a comprehensive audit to reforestation fund utilization
suspected to be Corruption, Collusion, and Nepotism practices.
b. To give administrative sanctions towards enterprises that
fail to pay the Forest Product Retribution and Reforestation Fund.
c. To conduct site supervision and administrative notification to corporations holding Forest
Concession Rights Forest Concession Rights of Timber Industryand Forest Concession
Rights of Natural Tourism and Plantation Business Permission suspected
to be Corruption, Collusion, and Nepotism practices.
d. To cancel the approval of the Minister of Forestry and Plantation
on change over of Forestry Area in question according to the
valid regulation, and to review of the land value of the replacement land.
Developing Peat Land
In the framework of national food safety, based on Presidential Decree
No. 83 of 1992, a decision on the One-Million Hectares of Peat Land in
Central Kalimantan Province has been taken. Of the designated area, 300,000
hectares have been opened.
The implementation of this project is considered unsuccessful because
it created problems, on the technical, social, economic and cultural as
well as ecological issues. There have been reports of big scale illegal
tree felling and forest squattering in non-cultivated areas which have
damaged the forest, including fauna habitat.
The policy that has been taken are: a) to revoke Presidential becree
No. 83 of 1982 which is amended by a new Presidential Decree to consolidate
activities by considering conservation principles; and b) due to the inconsistency
of the land, activities in the uncultivated area are stopped and its function
In relation with Reforestation Fund Management, steps that have been
taken are as follows:
a. In the future. Reforestation Fund Retribution is based on the
Government Regulation. The draft of the bill is to be discussed
by the Ministry of Forestry and Plantation with the Ministry of Finance.
b. Retribution reforestation Fund is proposed to be taken in the
Wood Pile-Up Site by way of official assessment.
Tea plantation at Gunung
Mas, Puncak, West Java, is also a tourist destination due to its beautiful
Rice field in South Sulawesi
Pepper plantation primaryly
executed in Maluku and Sumatra
Palm oil plantation at Lampung,
Fishponds development to
support the Protekan 2003 program in increacing fishery product
The utilization of society forest has been decided by Decision of the
Minister of Forestry and Plantation No. 667/Kpts-ll/1998. The decision
is to amend the Decision of the Minister of Forestry No. 662/Kpts-2/1995.
The principles of society forest concession are as follows:
a. To emphasize the interests of the people's welfare.
b. To develop and strengthen the local institutions which is
based on the local physical infrastructure, social, economic, and cultural
c. To provide training and assistance to realize a reliable and
professional social institution for sustained forest management.
The implementation of Forest Concession Rights of Society is a step
toward redistribution of forest concession, especially in the framework
of empowering people's economy.
Forest and Plantation as Food
Indonesia is facing various problems, among other things, providing
food problem for more than 200 million people. If it is well restructured,
forest and plantation will be able to overcome the problem.
From the forest and plantation area available for developing food crops,
it is estimated that the food crops production capacity could reach 1,560
million ton annually. This is more than enough as national food stock.
If this program is properly undertaken, the forest in Indonesia will be
able to serve as the center of the world food reserve.