The contract farming system has already been proven effective during Anies Baswedan’s tenure as Governor of DKI Jakarta. Hence, it is inappropriate to compare it with the food estate project that has proven to be a failure. #aminkaninodnesia
JAKARTA | KBA – The Chairman of the National Campaign Team (TKN) for Prabowo Subianto-Gibran Rakabuming Raka, Airlangga Hartarto, is considered to have misunderstood the contract farming program proposed by Anies Baswedan to replace the food estate project run by the Joko Widodo Administration.
This is because the contract farming system promised by the number 1 presidential candidate is not a partnership with farm laborers or farmers, as stated by Airlangga. Instead, it involves collaboration with the Combined Group of Farmers (Gabungan Kelompok Tani or Gapoktan).
“Let me clarify, farm laborers are just workers, different from Gapoktan, which can provide production facilities, capital, marketing, and cooperation with other entities in the agricultural ecosystem,” explained economic observer Abdul Munir Sara on his account, @Munir_Timur, as quoted by KBA News, Tuesday, December 5, 2023.
He further compared the food estate, whose basis of collaboration tends to be with corporations, while contract farming works with farmers/Gapoktan.
Thus, the advantage of contract farming is that the government/state-owned enterprises (SOEs) act as standby buyers, guaranteeing to purchase agricultural products from farmers at a pre-agreed price, without limiting the amount of production that must be delivered by farmers.
The government/SOEs also provide technical assistance, input materials, and credit facilities to farmers.
“The benefit of this contract is that farmers can reduce price and market risks, as well as gain access to capital and technology,” said the author of “Jejak Esai Ekonomi Politik.”
From the supply chain perspective, it is also supportive. With the contract farming system, the availability of food products does not create price fluctuations, due to derivative policy products like the warehouse receipt system.
“The contract document can also be used as collateral for credit to farmers for financing superior seeds, fertilizers, agricultural mechanization, and e-farming,” he said.
He asserted that contract farming has already been proven effective during Anies Baswedan’s tenure as Governor of DKI Jakarta. Therefore, it is incorrect to compare it with the failed food estate project.
“Comparing the failed food estate project with contract farming that already has an evidence-based policy is a failure of thinking,” he concluded.
Previously, Airlangga criticized Anies Baswedan’s intention to replace the food estate project with contract farming. Airlangga said that if contract farming is implemented, farmers would not own their land.
“Contract farming means farmers who don’t own land. So, in Java Island, many are agricultural workers. We don’t want that,” said Airlangga last Thursday.
Therefore, the Chairman of Golkar Party and Coordinating Minister for Economic Affairs said, the solution is to develop food estates, especially outside Java and Papua. “As I said, we want farmers to own land. So, farmers are prosperous, not agricultural workers,” he added.
Meanwhile, Anies prefers the contract farming program over continuing the food estate for several reasons. Firstly, he wants to change the approach from centralistic to decentralization. This approach will encourage farmers who have been playing a role to take a more significant part.
Secondly, Anies aims to shift focus to the agricultural sector. Food estate focuses more on agricultural extensification, which he considers creates many environmental problems, especially ecological ones. Meanwhile, the contract farming approach refers to the intensification of people’s agriculture to increase agricultural productivity.
Thirdly, Anies wants to change the absorption of agricultural output using a work contract scheme. This scheme was successfully implemented during his tenure as governor in Jakarta. At that time, he collaborated with Gapoktan across Indonesia and contracted for five years to purchase their agricultural output.
“So, this cuts the supply chain, rice prices are higher, those in Jakarta receive cheaper rice prices, both benefit, and farmers get long-term certainty,” Anies explained.
Lastly, Anies wants to change the control of agricultural land. In the food estate approach, agriculture or farmers are controlled by capital owners. However, in contract farming, this approach is changed with agriculture run by capital owners and farmers.
“Hopefully, with the contract farming model, farmers across Indonesia will have the opportunity to obtain added value for their work and a fair system for all,” he concluded. (kba)