Farmers collect paddy during harvest day at a rice field in Candipuro district, Lumajang, East Java province, Indonesia. - Photo from Reuters
DESPITE its crucial role in maintaining and boosting agricultural land productivity, Indonesia’s fertiliser subsidy programme is poorly targeted, which hampers its effectiveness.
This could be addressed through better targeting data by integrating the results of the 2023 Agriculture Census (CA 2023) and the Socioeconomic Registry (Regsosek) as a basis for planning and executing the programme. Indonesia is facing a challenge in boosting the productivity of its agricultural land to feed a population of almost 300 million, which will continue to grow.
Paddy yield, for instance, has remained stagnant at 5.2 tonnes per hectare of dry unhusked paddy for the last five years.
The overall results of the 2021 Integrated Agricultural Survey found that only 10.5% of our agricultural land is underproductive and sustainable because of a low level of productivity.
When it comes to improving land productivity, using fertiliser is crucial.
Thanks to the Green Revolution in the 1980s that promoted the widespread use of chemical fertilisers to produce high yields, fertiliser has become a critical input in crop production to maintain the yield of improved seeds in Indonesia.
The results of the national Survei Ubinan (crop yield survey) found a significant difference in yield between paddy fields that used chemical fertilisers and those that did not.
In the context of paddy and maize cultivation, the CA 2023 pointed to high fertiliser use among agricultural holding companies (horticulture and fishery).
Around 19.2 million (74.5%) horticulture and fishery holding companies used chemical fertilisers in 2023, mostly in the forms of urea and NPK (nitrogen, phosphorus, potassium).
In the main producing regions for paddy and maize, such as Java and South Sulawesi, the participation rate was almost 90%.
Following its massive use as production inputs, fertilisers account for a substantial proportion of the total agricultural production cost, particularly in food crop production.
The results of the 2017 Food Crop Cost Structure Survey showed that the average ratio of fertiliser expenditure to total production cost for 1ha accounted for 9.4% for wetland paddies and 13.4% for maize.
Therefore, the availability of sufficient, timely and affordable fertilisers for farmers is inevitable.
Pivotal role
In this regard, the fertiliser subsidy programme plays a pivotal role, particularly for small-scale farmers with limited land.
The CA 2023 results also confirmed that our agricultural production is run mostly by petani gurem (small-scale farmers), who made up around 60.8% of a total of 28.4 million agricultural households in 2023.
Ideally therefore, the fertiliser subsidy programme must be directed to achieve two simultaneous targets: improving land productivity and social protection for small-scale farmers.
Unfortunately, although the government’s fertiliser assistance, mostly in the form of subsidised fertiliser, reaches more than half the total number of farmers, there is an indication that it has low effectiveness in boosting yield and improving small-scale farmers’ welfare. One of the reasons for this is that the programme is poorly targeted, exacerbated by weak operational execution that causes delays.
Despite a consistent decline in the budget allocation for the fertiliser subsidy programme over the last five years, the amount is still relatively high at an average 29 trillion rupiah per year.
Unfortunately, that large sum has not been accompanied by a substantial increase in added value and productivity in our agriculture sector.
From 2019 to 2023, our agricultural output grew at an average of only 2.2% per year, while agricultural labour productivity grew at an average of only around 1.7% per year.
Low effectiveness
This is an indication that the fertiliser subsidy has had relatively low effectiveness in improving our agricultural performance.
It seems that the root of the problem is poor accuracy of the data used for the programme’s planning and execution, particularly in determining the allocation and the beneficiaries of the fertiliser subsidy programme.
The Regsosek confirmed that around 61.5% of households receiving fertiliser subsidies in 2023 came from groups in the middle 40% and the top 20% of the welfare distribution demographic.
This means that only 40% of the subsidised fertiliser was distributed to those in the bottom 40% of the welfare demographic, which is mostly small and poor farmers.
Moreover, the Survei Ubinan results found that around 10.2% of paddy farmers said the fertiliser assistance arrived late.
Meanwhile, our research using the same survey (Kadir & Octavia, 2023) found that fertiliser assistance is effective in improving yield only when the assistance is timely.
Better targeting data needed
Therefore, improvements to the programme must start with better targeting data as the basis for planning and execution.
All this time, the programme has relied on administrative data collected from farmer groups by agricultural extension officers.
Called the Definitive Plan of Group Needs (RDKK), this dataset is used as the basis for determining the amount as well as the beneficiaries of the fertiliser subsidy.
As always, the main weakness of administrative data is poor validation during data collection, which can sometimes be exacerbated by a lack of objectivity due to vested interests.
Besides, the use of the RDKK might reduce the programme’s coverage since not all farmers are members of farmer groups:
The Survei Ubinan confirmed that only 75% of farmers were members of farmer groups.
Better data can be achieved by integrating the results of the CA 2023 and Regsosek to create a comprehensive database of farmers.
This is possible, since both the census and the registry use the farmers’ population identity number.
Therefore, they can be used together to complement each other.
Improving productivity
The new database will contain information on all farmers by name and address, as well as their welfare status (socioeconomic data) and crop production data.
This will allow the fertiliser subsidy programme to be directed toward achieving two simultaneous objectives: social protection and productivity improvement. — The Jakarta Post/ANN
Kadir Ruslan is an analyst and materials task force coordinator for the chief statistician at Statistics Indonesia. The views expressed here are the writer’s own.
