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Jenderal Soedirman University

THE IMPACTS OF AGREEMENT ON AGRICULTURE ON ECONOMIC, SOCIAL AND ENVIRONMENT IN INDONESIA: THE RICE SECTOR CASE. Jenderal Soedirman University. UNSOED. Brief Description of the Project :. Main focus: - Economic, social and environmental impacts of AoA

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Jenderal Soedirman University

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  1. THE IMPACTS OF AGREEMENT ON AGRICULTURE ON ECONOMIC, SOCIAL AND ENVIRONMENT IN INDONESIA: THE RICE SECTOR CASE Jenderal Soedirman University UNSOED

  2. Brief Description of the Project: • Main focus: - Economic, social and environmental impacts of AoA - Effects of interrelationship between AoA and Structural Dev’t Policies on Indonesia’s rice economy • Institution involved: Jenderal Sudirman University, BULOG, Wacana Mulia, Ministry of Agriculture • Key stakeholders: National Planning Bureau, Ministry of Environment, Ministry of Agriculture, Farmer Groups, Local Governments, Traders

  3. BackgroundRICE is: • Main staple food • Consumed 130 kg/capita/year • Shared 21 % of HH budgets • Dominating rural employment ______________INDONESIA____________ • 1994  Net rice importer • 1998-2002: - Economic crisis in Indonesia - Radical trade liberalization

  4. METHODOLOGY • Stakeholder participation: - Stakeholders meeting: Minst. of Agriculture, Minst. of Industry & Trade, Minstr of Env’t, BULOG, UNSOED, Farmer Org, Land Research Institute, Wacana Mulia - International meeting in Geneva - SC meetings (Deputy Minst: Env’t, Planning, Agriculture, Foreign Aff, Trade & Industry, UNSOED) - Seminar • Analytical Method: - Economic Impacts  RRA, Interview, secondary data, I-O - Social Impacts  Interview, secondary data - Env’tal Impacts  Interview, secondary data, RCM & CVM

  5. MAIN IMPACTS IDENTIFIED BY IA • Economic Impact: - decrease in domestic real price of rice from Rp. 1,316 (1999) to Rp. 996 (2003) (-) - 261 respondents: 4% shift to other crops, 18% growing rice with reducing chemical fertilizers, 78% continue growing rice with lower income • Social Impact: - Local traditions & indigenous culture (-) - Poverty level (-) - Labor productivity decreased (-) - Urbanization (-) • Environmental Impacts: - Land conversion (-), water resource (-), Soil fertility (-)

  6. Main challenges: - Difficult to distinguish the impact of AoA & Stuctural Dev’t Policies - Difficult to understand, measure, & value the env’t services of the rice farming Improved capability in conducting similar/related project Opportunity to adopt env’tal service charge in agric land pricing MAIN LESSON LEARNED

  7. MAIN RECOMMENDATIONS Government should : • increase total rice production & yield because it has significant impact on food security & poverty reduction • develop rice marketing infrastructures to reduce marketing costs  higher share of income to the farmers • promote small-scale, post harvest tech, & mngmt to reduce losses and increase famers’ income • support the development & application of IPM, soil & water conservation to promote sustainable agric dev’t • aware in issuing permits for land conversion  incl env’t function • Giving input subsidies to reduce production costs should be allowed by AoA since rice production is for domestic rice consumption.

  8. MAIN ACTIVITIES TAKEN TO IMPLEMENT RECOMMENDATION • Seminar & publication • Main actors involve: Dept. of Home Affairs, BPN, Dept. of Agric, Ministry of Env’t, • Activities taken not yet

  9. MAIN ACHIEVEMENTS • High attention and participation from stakeholders • More comprehensive information  awareness • Improved understanding & better communication inter-ministerial, inter-institutional, among stakeholders

  10. MAIN ACHIEVEMENT • Gov’t policy to reduce rice import, discuss ESP, encourage organic farming • Policy and stakeholders behaviour move toward more env. friendly • Improve capability of researchers in conducting similar projects on integrated assessment • Replication is none, but other projects (Green GRDP, NR based dev’t plan, valuation on mining project)

  11. CHALLENGES TO MOVE AHEAD • Political movement for democracy is on the first priority, env. on the last • Intergov. finance system ecourages resource depletion & env. degradation • Civil workers underpaid; leads to inefficiency

  12. ACTIONS NEEDED TO MOVE AHEAD • Continue discussion and dissemination of ideas • Government takes the lead for dissemination & policy dev’t (Min. of Env., BAPPENAS, Dept. H.A., Dept.Agr., BPN, Univ.)

  13. EXTERNAL SUPPORT • Funding studies for application of Env. Service Charges (what, how much, how to implement, institutions involved, stakeholders participation). • Encourage governments on the protection of environment and application of env. service charges through international forum.

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