G-20 News

G20: key role of public companies in supporting the food resilience agenda

The role of public enterprises (EPs) as national economic engines is crucial.

SOEs are needed to support the success of Indonesia’s G20 Presidency food security or resilience agenda in 2022, which is seen as a year of determination for national and global economies.

Based on Attachment II on the Agenda Matrix of the Sherpa Track Working Group of the Indonesian G20 Presidency in 2022 in Ministerial Decree No. 27 of 2022, some of the priority agendas in the agriculture sector are building a resilient and sustainable food and agriculture system.

The attachment also lists the agenda for innovative agribusiness through technology and digitalization of agriculture to improve the welfare of farmers in rural areas.

Supporting public enterprises in achieving the G20 food security agenda involves encouraging the establishment of a national food ecosystem from the private sector to local governments.

To this end, the Minister of State Enterprises, Erick Thohir, invited food sector actors, such as local governments, professionals, private entrepreneurs and relevant ministries and state institutions, to build an agricultural ecosystem together.

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“We have natural resources, farmers, banks and markets. If there is no connected ecosystem, they will develop independently,” Thohir noted.

Thohir called for action to address several gaps in Indonesia’s food security ecosystem, particularly in aspects of food production and farmer welfare.

For example, the Minister noted that improvements were needed in the processing of Indonesian coffee production. Indonesia is rich in coffee products or resources, although he felt that the quality of processing does not match this wealth.

He admitted that the Indonesian coffee processing industry still lags behind those of other countries. One of the factors is that Indonesian farmers are trapped by loan sharks and forced to pay their debts by harvesting immature coffee beans. They are also forced to do the drying process in a hurry.

Another aspect to consider in improving Indonesian coffee domestically and internationally is the poor harvest situation.

Thus, public companies must prepare insurance for farmers to anticipate crop failures. Public banks, including BRI, BNI, BTN and Mandiri (Himbara), must also organize their financing for farmers. Moreover, another important part is the fertilization process which should be done on time.

Of course, the above recommendations must be taken into account when forming a national food ecosystem. Thohir established the Project Management Office (PMO) related to coffee products to encourage unified efforts to develop and improve the quality of Indonesian coffees.

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In addition, Thohir launched ID FOOD, a public food holding company aimed at improving the food supply chain through coordination.

The establishment of ID FOOD aligns with the mission and vision of the Indonesian government to carry out the transformation of the food sector in various commodities, such as rice, corn, chicken, cattle, goat, fish, chilli, onions, sugar and salt.

These different products will be connected in a supply chain that will end in retail sales that can then upgrade to become an international business.

Prosperity Program

One of the other public enterprise supports to the G20 innovative agribusiness food security program through digital agriculture to improve the welfare of farmers in rural or village areas is to continue to encourage the Makmur program or the Let’s Move Forward People’s Business program.

State-owned fertilizer company PT Pupuk Kalimantan Timur’s Makmur program project manager Adrian Putera said that under PT Pupuk Indonesia, his team felt the program was about improving the prosperity of farmers, and that it is in line with the Indonesian government’s agenda. Presidency of the G20.

Since its launch, the Makmur program has been designed to create an agricultural ecosystem.
The Makmur program focuses on implementing the triple bottom line (3P), which is People, Planet, Profit, in each of its actions.

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Therefore, the program is expected to make Indonesia’s agricultural sector sustainable through the use of fertilizers, pesticides, etc.

The program always ensures that the agricultural sector can have a positive impact on the Indonesian environment.

In addition, one of the areas of interest of the Makmur program is the use of technology integration and digitization, such as the use of drones for sowing.

This program has also been proven to increase the productivity of staples, such as corn by 42% and rice by 34%. On the other hand, farming community income can be increased by 52% for corn farmers and 41% for rice farmers.

This increase in farmers’ profits indicates that they have increased their purchasing power and have the opportunity to purchase unsubsidized fertilizers. This fact, again, corresponds to one of the objectives of the program on how to maximize the use of unsubsidized fertilizers for agricultural productivity.

Priority commodities include rice, maize, chilli, palm oil, cassava, coffee, pepper, cocoa, onions, sugar cane, tobacco, pineapple and mangosteen .

Meanwhile, PT Pupuk Indonesia aims that by 2022, the total planting area of ​​the Makmur program will cover an area of ​​250,000 hectares spread across Indonesia, and the sale of unsubsidized fertilizer is expected to reach 125,000 tons.

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The targeted area will be gradually increased until 2024 and is expected to reach four million hectares. Meanwhile, the number of farmers involved by 2024 is expected to reach four million.

PT Pupuk Kalimantan Timur is optimistic about expanding land development under the Makmur scheme up to five times by 2022, especially in eastern Indonesia.

The company’s CFO, Qomaruzzaman, said his team will continue to focus on expanding the development of the Makmur program, especially in the eastern region of Indonesia, given the huge agricultural potential. .

“We are creating a conducive agricultural ecosystem to help farmers achieve optimum productivity. Besides intensively assisting farmers in the daily operational process, we also continue to strengthen end-to-end collaboration with various parties, such as institutions financial institutions, government agencies and corporations,” Qomarushaman explained.

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