Smallholder farmers contribute trillion of rupiahs to investment in food

Smallholder farmers contribute trillion of rupiahs to investment in food

INDRAMAYURice is Indonesia’s main food, and it is important to consider the role of small scale farmers and women in the production of rice and other food. Small farmers and women have contributed immensely to meet the nutritional needs of the Indonesian population. According to national statistics, 73 millions tonnes of rice from the national rice production are produced by small farmers, most of which usually farm 0.25 to 0.5 hectares. The rice fields in Indonesia has a total land area of 13 million hectares.

Based on the farmers’ experience, the average production cost to produce rice is 20 million rupiahs per hectare per season including the rent for the land. Normally, smallholder farmers harvest rice twice a year, which means smallholder farmers contribute 520 trillion rupiahs (40 billion US dollars) per year as investment in food, particularly rice. (Investment in horticulture is not included.)

In rice farming, smallholder farmers provide 104 million on-farm employment and 26 million off-farm employment such as trading and processing. The off-farm opportunities are especially attractive to young farmers.

Smallholder farmers contribute a fair share to the investment in food in Indramayu. Currently, the total land area for rice production in the district is 240,341 hectares. On a regular cropping season, the average of productivity is 7 tonnes per hectare. Thus, smallholders contribute for the food (rice) investment 9.6 trillion rupiahs (73,951 million US dollars) per year.

Despite the important role of smallholders in the fulfillment of the needs for food, their protection and empowerment are very low. Smallholder farmers usually do not get better price protection. There is still a high disparity on the rice price on farmer versus consumer levels.

Based on the information from farmer and consumer in the field as shown in the graph, the difference of rice price on farmer level to consumer is 4,000 in 2015 and 4,500 in 2016. Currently, the rice price on farmer level is 7,000 rupiahs/kg (0.54 USD), while in consumer level 11,500 rupiahs/kg (0.88 USD/kg). This means 39% is added to the value of rice as a commodity which does not go to the farmers. Of the total rice produced in Indramayu, an additional 15.141 trillion rupiahs (1.16 billion US dollars) can be added to the earnings of the smallholder farmers in Indramayu.

The farmer households then purchase rice as food which is more expensive than the rice they sell to middlemen. Farmers also had to spend on food and other needs such as electricity, and their children’s education, among others. In some cases, the reduced earnings result to malnutrition of children and women. This is the current situation faced by smallholder farmers.

Thus, it is important that farmers are given protection and empowerment. Government, CSOs, and NGOs must support the increased production and added value of rice for smallholder farmers. Some of the ways to do so is by supporting marketing on farm level, supporting the cooperatives led by farmers, supporting price protection on farmer level, improving the irrigation, and protection from crop failure. (Rifai, API)

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