INDONESIA´s HANDBOOK 2000

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CONTENTS

FOREWORD
LAND
PEOPLE
HISTORY
GOVERNMENT
DEVELOPMENT ACHIEVEMENTS
Economic Recovery
People's Welfare and Poverty Eradication
Food and Horticulture
National Logistics Agency
Investment
Agriculture
Industry and Trade
Mining and Energy
Cooperatives, Small and Medium Scale Enterprises
Transportation and Communications
Transmigration
The Law
The Environment
Defense and Security
Health
Social Affairs
Manpower
The Role of Women in National Development
Population and Family Planning
Religious Life
Education and Culture
Science and Technology
Housing and Settlement
Agrarian Affairs
The Younger Generation and Sports
Tourism, Arts and Culture
Empowerment of State Enterprises

AGRICULTURE

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 supply.

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 site.

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 2003.

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 per hectare.

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.

Forestry

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 environmental function:

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 mentioned above:

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 Enterprises (BUMN)

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 management.

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 is returned.

Reforestation Fund

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 scenery


Rice field in South Sulawesi


Pepper plantation primaryly executed in Maluku and Sumatra


Palm oil plantation at Lampung, Southern Sumatra


Fishponds development to support the Protekan 2003 program in increacing fishery product

Society Forest

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 aspects.

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 Resources

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.

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