Other Agriculture Study
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Publication
An Exploratory Overview of Agriculture Finance in Indonesia
(World Bank, Washington, DC, 2020-06-19)The Government of Indonesia is aiming to diversify the country’s food system by developing and strengthening high-value-added and more nutrient-rich value chains. In this regard, the government is focusing on diversifying into horticulture and small ruminant livestock. Undertaking Value Chain Analysis (VCA) is a critical part of this process as it helps in the identification of constraints and opportunities in relevant sectors. Agriculture funding and finance are vital components of this analytical process. This report presents a preliminary overview of opportunities and constraints as well as areas for future interventions. The analysis is based on a World Bank and FAO scoping mission to Indonesia that took place between March 2 - March 13, 2020. This report focuses on the supply-side of capital. The key findings suggest that supply-side constraints are minimal. The liquidity in Indonesia’s banking system is enough and there already exist extensive physical banking networks within the country. The Indonesian banking networks include a selection of commercial and specialized banks, membership-based groups, and fintech organizations. Also, there exist several large food manufacturers that could potentially aid in the process of financing and the creation of linkages through vertical integration of value chains. The Small and Medium Size Enterprises (SMEs) in the food and agriculture sectors have been growing strongly, and they can act as accelerators and facilitate the process. The Indonesian government is supporting the development of value chains and has been actively promoting the creation of farmer organizations to aid the process. Lastly, there exists a demand for the creation of a blended finance facility that could help amplify the effects of the value chain projects, and the Tropical Landscapes Finance Facility (TLFF) is a proof of such a concept that is working well in Indonesia. -
Publication
Sustainable Management of Agricultural Research and Technology Dissemination (SMARTD) : A Strategic Framework
(Washington, DC, 2008-06)Revitalizing agriculture is critical for rural Indonesia's economic prosperity. Historically, Indonesia's dramatic poverty reduction was driven by progress in agriculture and agriculture continues to be a potent driver of growth and poverty alleviation. Agricultural sector growth strongly induces non-agricultural sector growth in rural areas, particularly through demand for locally produced and services. Agricultural sector productivity growth (along with price changes) has remained the most important way out of poverty. To shift agriculture along these dimensions, Indonesia needs to transition from its current and ineffective public stance, growing subsidies and selective output protection, to a more aggressive provision of public goods and services that build support systems for farmers to achieve continuous productivity gains. This will require an enabling agriculture policy environment, significant improvement in the delivery of services, agricultural research and extension in particular, and supporting enabling investments, which will encourage small farmers to move to high value agricultural activities. This will boost employment and raise incomes in rural areas while creating a bigger rural market with greater trade and investment opportunities. -
Publication
Sustainable Management of Agricultural Research and Technology Dissemination (SMARTD) : A Strategic Framework
(World Bank, Washington, DC, 2008-06)Revitalizing agriculture is critical for rural Indonesia's economic prosperity. Historically, Indonesia's dramatic poverty reduction was driven by progress in agriculture and agriculture continues to be a potent driver of growth and poverty alleviation. Agricultural sector growth strongly induces non-agricultural sector growth in rural areas, particularly through demand for locally produced and services. Agricultural sector productivity growth (along with price changes) has remained the most important way out of poverty. To shift agriculture along these dimensions, Indonesia needs to transition from its current and ineffective public stance, growing subsidies and selective output protection, to a more aggressive provision of public goods and services that build support systems for farmers to achieve continuous productivity gains. This will require an enabling agriculture policy environment, significant improvement in the delivery of services, agricultural research and extension in particular, and supporting enabling investments, which will encourage small farmers to move to high value agricultural activities. This will boost employment and raise incomes in rural areas while creating a bigger rural market with greater trade and investment opportunities.