Socio-economic Transformation of Agriculture and … Ernan Rustiadi_MR3... · Socio-economic...

28
Socio-economic Transformation of Agriculture and Rural Development Long Term Scenario of A Lower Middle Income Country: Indonesia Case Ernan Rustiadi Bogor Agricultural University 1

Transcript of Socio-economic Transformation of Agriculture and … Ernan Rustiadi_MR3... · Socio-economic...

Socio-economic Transformationof Agriculture and Rural Development

Long Term Scenario of

A Lower Middle Income Country: Indonesia Case

Ernan RustiadiBogor Agricultural University 1

Introduction

• Indonesia is the 4th most populous country in the world with a population of 237.6 million people in 2010 of which 49% lives in rural areas (BPS, 2010).

• GDP at PPP: USD 1 030 billion in 2010 (the world’s 16th largest economy)

• GDP per cap. of USD 4 300 at PPP (2010)

• Indonesia is ranked as a lower middle-income country.

2

• The country has progressively shifted from a primarily agrarian economy towards stronger reliance on industry and services over the past five decades.

• The industrial sector contributed 47% to total GDP in 2010, including around 8% by the oil and gas sector, and 24% of manufacture.

• Agriculture share on GDP: 15% and employment share: 38%

3

Comparison of countries share of agriculture sector in GDP and share of employment

(1980-2007)

China

India

Indonesia

Japan

Korea

Malaysia

Philippines

Thailand

Vietnam

0

5

10

15

20

25

30

35

40

45

0 10 20 30 40 50 60 70 80

Agricultural sector's share of GDP

Agricultural sector's share of employment

1980 2007

Long Term Transformation Challenges for Rural Development

Current Traditional Challenges as a lower middle income countries

(poverty, less access to basic need, minimum public facilities and capital, low productivity of human resources, food security)

VsGlobalization, Climate Change,

New Paradigm of Sustainable Development(1) Diversification of Rural Economy(2) New and renewable energy, and (3) Shifting of consumption pattern

5

6

• Domination of small-scale/landless and low productive

traditional farmers have been creating labor surplus in rural

areas (disguised unemployment)

• Massive rural-urban migration, overurbanization in main

cities, informal sectors, trans-national labor mobility and others.

• Population growth rate is considered high (1.5% per year) and

still high for more then next 2 decade including in rural,

• Job-creation policy is the most important issue

• Developing rural based agricultural and bio-processing

(downstream sectors) in rural areas: shaping a more

convergence urban-rural development

• The Ministry of Agriculture is preparing

“Long-Term Development Planning for Integrated Agriculture System in Indonesia 2013-2045”

(including Forestry, Fishery, Agro/bioindustry and Rural Development)

Bioindustry development have been chosen as long term rural based economic prime mover

7

Dynamicsof

National Macro economy

8

Pertumbuhan Penduduk Perkotaan dan Perdesaan(2015 -2045)

0

50

100

150

200

250

300

350

400

20152020

20252030

20352040

2045

Perdesaan

Perkotaan

10

Economic growth rate(%), 1960-2011

-15,0

-10,0

-5,0

0,0

5,0

10,0

15,0

Sumber: Badan Pusat Statistik

National Poverty Rate (%)

National Poor Population

Urban

Rural

Share of Urban and Rural Poverty (1976-2011)

0

10

20

30

40

50

60

70

80

90

#REF!

Share miskin kota

Share miskin desa

Urban

Rural

Urban & Rural Monthly Income per capita

(US$, 1$=9.500)

0

10

20

30

40

50

60

70

80

90

2008 2009 2010 2011

Urban Rural

Manufacture Industry vs Agriculture sectors Shares in National GDP (1960-2010)

0

10

20

30

40

50

60

Pertanian Industri Agroindustri

Deindustrialization

A need for Industrial-Agriculture Transformation

16

Deindustrialization: For more than a decade, Indonesia has been

experiencing a relatively stagnant transformation in term of GDP

(agriculture vs manufacture)

Lack of labor absorption in Manufacture: Manufacture sectors capacity

on creating job (labor absorption) is consider very low, far behind its GDP’s

growth and its GDP share (25%). Labor absorption in manufacture was

relatively stagnant (12%) for more than two decades.

Foot loose Industries

Rural economies that predominated by leading Primary sectors (palm

oil, rubber, coal mining, etc) are trapped to be raw material exporters

Weak linkages between main primary sectors and manufacture industry.

Indonesia GDP Scenario(constant 2010 billion US$)

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045

SIPP KEN JICA Optimistic JICA Pessimistic

the world’s

10th largest

economy

Long term

Scenario of Economic Transformation (1980-2045)

% on-farm Agric GDP

% Rural Poverty Rate

% Manufacture GDP

% Agro & Bio Industry

on GDP

% Agro Services

Setors

% on-farm Agric

Employment

% on-farm Agro/Bio

Industty empoyment

% rural population

CONCEPTUAL FOUNDATIONfor Long Term National Development 2013-2045

TIERED STRATEGY:

1. GENERAL STRATEGY: THE DEVELOPMENT OF BIOECONOMY- TECHNOLOGY AND BASED SCIENCE

2. OPERATIONAL STRATEGY :

a. NATIONAL LEVEL: the development of the based “Agriculture for Development” paradigm, and

b. SECTORAL LEVEL: the development of Sustainable systems agriculture-based Bioindustry in rurals.

19

Bioprocess (agriculture) as solar energy transformation trough bio-processing

• It takes million years to produce fossil-based energy trough bio-geo-chemical process

• But we only need a hundred year to consume it

• Agriculture and bio-processing (plant, animal and microorganism) can produce energy, biomass and traditional agricultural products (food, feed, fiber, etc)

20

Indonesia Export Share on some agricultural in the World (1990-2010)

0

5

10

15

20

25

30

35

40

45

50

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Coconuts Palm oil Coffee Cocoa beans Rubber%

Kembali

COMPONENT OF BIOECONOMY

BIO-BASED

ECONOMY

FOOD

ENZYME

FUEL

BIOMATERIALSCHEMICAL

BIOREFINERY

FEED

22

“To be a prosperous, dignified, independent, fair and

prosperous country with competitive and

sustainable agricultural bioindustry system

supported by advanced technology driven

agriculture, forestry and marine resources economy”

VISION

of

AGRICULTURE AND RURAL

DEVELOPMENT 2045

MISION

1. To develop spatial plan and agrarian reform as the basis for

sustainable bioindustry system development;

2. To develop sustainable agroecological tropical integrated agriculture

bioindustry system through the protection, preservation, utilization and

development of genetic resources, and extension, development and

conservation of agricultural land;

3. To develop economic activities for agricultural

input, production, information, and technology within the sustainable

bioindustry system through the protection and empowerment of

agriculture human resources;

4. To develop agriculture processing system through increased

added value of extended post harvest within rural based agro-

energy and bioindustry;

5. Develop domestic and global agricultural value chain management

system for farm products through the development and empowerment

of agriculture quarrantine;

6. Develop agricultural research for development system based on

local specific innovation, quality human resources

development, improved entrepreuneurship, and strengthening

agriculture social capital to accelerate agricultural total factor

productivity growth;

7. Develop rural agricultural infrastructure to accelerate the

transformation process for agricultural and the national

economy;

8. Carry out imperative legislation, regulation and management

program for the development of sustainable nationwide agriculture

bioindustry.

MISION...

1. Annual income of industrial individual farmer of $ 1,845 by 2020 and

annual income of industrial agro-services farmer of $ 7,500 by

2040;

2. National food self-reliance status by 2020, national food sovereignty

by 2025, and community food sovereignty by 2030;

3. Self-reliance in energy through the implementation of

integrated agro-energy for a quater of the total rural areas by

2020, and for the total rural areas nationwide by 2035;

4. Integrated rural agriculture-bioindustry system for substitution

of 75 percent of national fossil-based products national product

by 2030 (bio-fuel)

5. Bioservices/agroservices sector as economic prime mover for a

quarter of total rural areas by 2030, and throughout the country

rural areas by 2040;

DIRECTION AND TARGETS

27

In developing sustainable agriculture-

bioindustry system an integrated

macroeconomic and sectoral policies

are required.

Toward Integration of: Ministry Agriculture

Ministry Forestry

Agro/bio industries sectors

Rural Development

THANK YOU

28