Beyond first impressions: the case for investment in Indonesia

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It’s been proven that of all interventions designed to reduce poverty, improving agricultural productivity is the best – Bill Gates

This quote opened Dr Peter Warr’s presentation, “Agricultural research raises productivity and reduces poverty: Evidence from Indonesia and Thailand”. Dr Warr shared evidence of how investment in agricultural research significantly reduced poverty by 26 percent between 1995 and 2006.

As an Indonesian, my first impression was, ‘Really? Are you sure?’. I have been living in Indonesia for all of my 23 years and I have not seen much improvement in poverty from more investment in agricultural research. This statement initially seemed just wishful thinking  to me. I studied Food Science and Technology at the Faculty of Agriculture. In class, the lecturers were always mentioning how poor our farmers are and that the situation has not improved for decades.  As someone who lives in a rural area, I hadn’t seen a significant improvement of the agriculture in Indonesia in general.

But other evidence would seem to support Dr Warr’s research . According to Indonesia’s National Development Planning Agency: “Through various development policies and programs, such as better food security, agricultural development, the provision of revolving loans, investment in education, health services, and infrastructure, the number of people living in poverty decreased from 54.2 million (40.1%) in 1976 to 34.5 million (17.7%) in 1996.”

Although the time period is shorter, and the percentage change is slightly similar, this does indicate that increasing agricultural productivity has an impact in reducing poverty.

Now, having attended many sessions at the High Level Policy Dialogue on Investment in Agricultural Research for Sustainable Development in Asia and the Pacific, I am beginning to understand how investment in agricultural research and the input  of a range of stakeholders is needed to reduce poverty in Indonesia and to achieve the  Sustainable Development Goals (SDGs).

First, because the adaptation of international agricultural research to local circumstances has been found to be more suitable and easily implemented there. The international agricultural research centers play a role in generating pro-poor technology to farmers and can fulfill diverging and evolving roles within the innovation systems. This will accelerate the growth for the poor and enable farmers to have faster solutions to their field problems.

Secondly, a higher return of investment can be reached more quickly by improving research facilities. Dr. Warr’s research showed the internal rate of return (IRR) in Indonesia is as high as 27 percent, through increasing investment by one billion rupiah in agricultural research. Raising the investment has significantly contributed to Indonesia’s agricultural productivity, according to the research. However, this should be followed by lowering the prices of food to keep it within the purchasing power of Indonesian consumers. If these two efforts can be combined, Indonesia can maintain its food security and improve the living standards of the majority of poor people residing in rural areas and directly involved in agricultural production.

Looking at the evidence I have to conclude that the Government of Indonesia should be putting more attention on investment in agriculture—particularly in agricultural research – working across all relevant sectors and followed by a strong commitment and supervision in implementation.

 

Blogpost by Ratih Nawangwulan, #GCARD3 Social Reporter – ratih.nawangwulan(at)gmail.com

Picture courtesy: Mufid Majnun

This post is part of the live coverage during the #GCARD3 Regional Consultation for Asia and Pacific region. This post is written by one of our social reporters, and represents the author’s views only.


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