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Publication(World Bank, Washington, DC, 2021-02-01) World BankThe report aims to advance a policy dialogue on how to address sustainability challenges from lowland developments. The specific approach discussed in this report is the "landscape approach" which, in turn, calls for improved "landscape governance." As a technical background study, the report serves four functions. First, it summarizes the principles of a landscape approach, elaborated in the context of Indonesia's lowlands through two previous technical studies. Second, it takes stock of current governance challenges in Indonesia's lowlands, focusing on those related to the government sector, and discusses how these challenges currently prevent a landscape approach from being implemented in Indonesia's lowlands. Third, it reviews Indonesia's recent efforts to address the governance challenges in the management of peatlands and other lowland ecosystems. Fourth, it offers recommendations on options to improve lowland governance in order to shift toward integrated management of Indonesia's lowlands based on a landscape approach.The report focuses on the lowland areas in eight fire-prone provinces, and on key landscape governance issues related to peatlands. Indonesia suffered many years of repeated fires and haze crises, with landmark events in 1982/83, 1997/98, 2002, 2006, 2009, and 2015. The 2015 El Niño-driven fires were particularly extensive and costly. Almost 80 percent of the 2015–16 fires occurred within the lowland areas in eight fire-prone provinces—Central Kalimantan, East Kalimantan, Jambi, Papua, Riau, South Kalimantan, South Sumatra, and West Kalimantan—which together account for 87 percent of lowland areas nationally. The report highlights the importance of sustainable landscape management of lowland areas, particularly of the peatlands within lowland boundaries, for achieving the Government of Indonesia’s objective in preventing land and forest fires.
Publication(World Bank, Washington, DC, 2021-02-01) World BankFor Indonesia's agricultural sector to continue to make a significant sustainable social and economic contribution, it will need to undergo a transformation. While the contribution of Indonesia's agriculture sector to national gross domestic product (13 percent) has declined greatly over the past three decades, it is still significant, ranking in third place in 2019 after the oil and gas processing sector (20 percent) and the non-oil and gas processing sector (18 percent). To ensure continued contribution of this sector, the Indonesian government has implemented a number of strategies and measures, including REDD+,1 low carbon development, Sustainable Development Goal (SDG) action plans, and green growth strategies. However, despite these efforts, performance in terms of environmental sustainability indicators and contributions to smallholders' livelihoods, particularly in lowland areas, is still suboptimal. Indonesia's lowland areas, in particular, have significant potential to contribute to increased agricultural production, especially in the case of rice, but also for a range of other food and non-food commodities. Indonesia's lowlands cover about 20 percent of Indonesia's total area of which about half are peatlands. Most of this area is found on Indonesia's three largest islands (Sumatra, Kalimantan, and Papua) amounting to 33.7 million hectares, or about 25 percent of the total land area of these islands (World Bank 2018). Indonesia has the largest area of tropical peatlands of any nation, of which more than 90 percent are distributed in the lowland areas of these three islands. However, lowlands are also of great importance for biodiversity, including mangroves, peat swamp forest and freshwater swamp forest with their specific flora and fauna. Despite the significance of lowland agriculture for the achievement of higher levels of national economic growth and environmental sustainability and for improving rural livelihoods in Indonesia, lowland agriculture must overcome several challenges if it is to realize its full potential.
Publication(World Bank, Washington, DC, 2018-01) World Bank GroupIndonesia is one of the main agriculture producers globally and largely relies on domestic staples for its growing population. Projections of climate change models for Indonesia point towards increasing temperatures and more extreme distributions of precipitation with more frequent dry and wet periods. The Government of Indonesia (GoI) has been focusing on modernizing rice production through improved irrigation infrastructure and early warning systems to better cope with developing droughts and support schemes for rice farmers. While governments use risk transfer solutions mostly for infrastructure, parametric insurance covers have become increasingly available for agriculture assets including crops, livestock, and forestry. This study investigates the development of a parametric insurance product as an ex ante risk management instrument that relies on regional drought indices and provides province-level payouts to the GoI in case of severe droughts. As a case study, the province of Central Java has been chosen given its importance in rice production and a recent request of the Central Java Government to transfer drought risk. This study uses over 50 years of historical gridded precipitation and temperature data to develop standard precipitation indices (SPI) and standard precipitation evapotranspiration indices (SPEI) to quantify drought extents at a resolution of 50 x 50 km. Preliminary results of this study have been shown and discussed with the Ministry of Agriculture of Central Java, the National Weather Service of Indonesia (BMKG), the Office of the Insurance Regulator, the Ministry of Finance, and leading Indonesian insurers in the form of workshops undertaken in Indonesia (Semarang and Jakarta) in July 2017. The availability of longer seasonal rice production data will improve the validation of the developed indices.