The Indonesian Chamber of Commerce has made a new offer of partnership as a solution to improving the welfare of farmers and fishermen. Through the partnership, it is hoped that the sector may grow even more.
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JAKARTA, KOMPAS – The Indonesian Chamber of Commerce (Kadin) has made a new offer of partnership as a solution to improving the welfare of farmers and fishermen. Through the partnership, it is hoped that the sector, which absorbs 31.8 percent of the nation’s manpower, may grow even more.
Kadin made the offer of an integrated partnership chain in the fourth Jakarta Food Security Summit (JFSS) held in Jakarta on Thursday and Friday (8-9/3/2018). The model seeks to connect farmers, cooperatives, corporates, insurance companies and banks in a sustainable cooperation.
Kadin chairman Rosan P Roeslani said that the sector – comprising agriculture, farming and fishery – contributes to 13-14 percent of the country’s gross domestic product (GDP) and absorbs almost 40 million workers. However, its growth remains small at only 3 to 4 percent.
The partnership scheme has been put into practice and is relatively successful in palm oil plantations. Through the partnership, farmers have market certainty as their products are absorbed by either corporates or partner industries. Farmers also receive training to apply proper cultivation systems and insurance to access capital with low interest rates.
Carried out in the Partnership for Indonesia’s Sustainable Agriculture (PISAgro), the partnership reached around 83,000 farmers in 2015 and 387,098 farmers in 2017. The total area of land managed in the partnership increased from 67,000 hectares to 259,433 ha in the same period.
Kadin deputy chair on food and forestry agribusiness Franky O Widjaja said that oil palm growers could purchase and use certified and high-quality seeds as they had adequate financial capital. Productivity increased, and cooperatives enjoyed their roles in liaising farmers with capital owners, buyers and the government.
Focus on welfare
In his opening speech on the summit, Vice President Jusuf Kalla said that apart from using technology, the best way to improve productivity and production was through improving farmers’ income and welfare. This is done through partnerships that enable farmers to achieve more efficient production cost, access capital with low interest rate, increase added value and have market certainty.
Improving farmers’ welfare must be a priority.
“Ask anyone who works the hardest and people will say farmers. However, their monthly income is continuously below Rp 1 million [US$70]. This is lower than the minimum wage in every region,” Kalla said.
National Development Planning Minister Bambang PS Brodjonegoro said that partnerships were the best solution to improving farmers’ welfare.
“This will cut the distribution chain and enable farmers to enjoy higher prices. Businesses can also enjoy more certainty in the supply of raw materials. With partnerships, I believe that farmers’ purchasing power will increase,” he said.
Coordinating Economic Minister Darmin Nasution said that the government applied commodity clustering to increase villages’ production scale. Through groups or clusters, farmers can work together.
Villages, Disadvantaged Regions and Transmigration Minister Eko Putro Sandjojo said that the forming of clusters was included in the Rural Areas’ Excellent Products program.
“Some 102 regents and 68 businesspeople participated [in the program],” he said.