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Pricing policies, cash transfers make Indonesia better equipped to weather silent tsunami
JAKARTA, June 10, 2008 – Compared to its regional neighbors, Indonesia is expected to experience only short-term repercussions from the global food price crisis, thanks to its moves to raise agriculture production and transfer cash to the poor. This relatively stronger footing allows Indonesia to make investments that would help enhance its food security and agriculture industry in the long term.
“ Many are understandably concerned about the negative impact from high prices. We want to add that, for resource rish countries like Indonesia, high commodity prices are also a big opportunity to raise investment and reduce poverty ,” said Joachim von Amsberg, Indonesia Country Director, World Bank. “However, given that Indonesian farmers are now dealing with climate change and scarce natural resources – on top of the current price crisis – it becomes critical for Indonesia to invest in more effective and efficient ways of boosting agricultural productivity.”
These comments were made in a workshop today arranged by the Indonesian government, the Bogor Agricultural University (IPB) and the World Bank, with financial support from the Netherlands government. The aim of the workshop was to review the preliminary findings of the recent commodity price increases, their expected evolution, their implications in the short-run, and their implications to Indonesia’s development strategy.
“High commodity prices represent an opportunity for Indonesia as a major player in the production and export of commodities. In the first quarter alone, we’ve already seen a 25% export growth and a 6% growth in agricultural production,” said Dr. Bayu Krisnamurthi, Deputy Minister of the Coordinating Ministry for Economic Affairs. “The challenge now for the government and private sector is to boost agricultural productivity even further. We need better crop, nutrient, pest, and water management practices in order for rice production to be profitable for producers, and to supply sufficient affordable staple food for consumers.”
In Indonesia, the World Bank is currently supporting the Ministry of Agriculture through a US$123 million farmer empowerment project that supports the development of a market-oriented agricultural services system. It is also working with government on a new project that aims to enhance the performance of Indonesia’s agricultural research system, in the development and dissemination of farmer and market demand-driven technologies.
On the global stage, the World Bank Group has initiated the New Deal on Global Food Policy – a multi donor effort to help vulnerable countries overcome food challenges through a series of short-term to long-term measures. Under the New Deal, support for agricultural activities is set to go up from US$ 4 billion to US$ 6 billion over the coming year, while a US$ 1.2 billion fast-track facility has been established to address immediate needs arising from the food crisis.
To read more about the World Bank’s support for Indonesia visit: www.worldbank.org/id |
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