Agricultural Investment Policy in East Kalimantan

Balikpapan, 10/5/12. Investment/investing in East Kalimantan in general seems to only be in the growth sector or Coconut sector Oil palm, because this sector is very promising and is better known to the outside world, even though investing in East Kalimantan is not only in these two sectors, what is more important is the sector or better known as the food estate program which has been offered by East Kalimantan to the private sector and State-Owned Enterprises (BUMN).

This was stated by the Deputy for Agricultural and Maritime Coordination, Ir. Diah Maulida, M.A when giving a speech and presentation at the Broad Scale Agricultural Investment Policy Coordination Meeting in the Novotel Balikpapan Hotel meeting room. This event was held in collaboration between the Coordinating Ministry for Economic Affairs of the Republic of Indonesia Deputy Coordinator for Agriculture and Maritime Affairs and the East Kalimantan Provincial Government, attended by approximately 150 participants consisting of Regional Work Units (SKPD) within the East Kalimantan Provincial Government and Regencies/Cities throughout East Kalimantan as well as private parties or investors who invest their capital in East Kalimantan.

Meanwhile the Governor of East Kalimantan, DR.H. Awang Faroek Ishak in his speech read by Assistant II for Economic and Development Affairs for East Kalimantan Province stated that the support of the Central Government was to be further increased, especially in the agricultural or food sector in accordance with the agreement of the East Kalimantan Provincial Government which was willing to become a national food barn with the support of the food estate program in East Kalimantan which prepared land of approximately 343,461 hectares of which the Central Government requested 500 thousand hectares of land, with an investment value of approximately Rp.9 Trillion.

The Governor of East Kalimantan said that currently the economy of East Kalimantan is dominated by an economy based on the exploitation of non-renewable natural resources, from the 2012 GRDP of 390.63, dominated by the Mining sector at 50.79% while the agricultural sector only contributed 5.35%. Of course, this is not the economic structure expected by the East Kalimantan Provincial Government. Because it is believed that an economy that relies on natural resource exploitation that cannot be renewed in the near future will experience rapid decline as natural resource reserves run out.

Therefore, East Kalimantan has prepared a new Economic Locomotive based on renewable natural resources, with an approach of no longer exporting raw materials, but becoming an exporter of manufactured materials that have competitiveness, added value and are able to provide a significant multiplier effect for the people's sustainable welfare. The two major strategies adopted are developing existing industries and building and developing agriculture-based industries using an economic scale and industrial cluster approach.

Current agricultural performance has shown improvement, but is not yet optimal and is still far from what was actually expected. Several important notes that need to be taken into account by the current government, especially in the agricultural sector, are that rice production, which is the main food in the country, has not yet been established, and is able to stabilize food prices so that the inflation rate tends to be small (stable). So achieving a rice production surplus could provide an opportunityng for farmers to export abroad country.

Food needs in Indonesia always fluctuate every year, especially rice. This condition is influenced by many factors including; (1) climate change (floods, droughts, changing planting seasons, etc.), (2) land conversion, (3) pest and disease attacks, (4) late fertilizer, (5) superior varieties of rice seeds that are difficult for farmers to find.

In this regard, the East Kalimantan Provincial Government with the 2013 Kaltim Bangkit Program is carrying out agricultural revitalization in a broad sense to make a greater contribution to regional and national economic growth as well as improving community welfare, one of which is the development of large-scale food cultivation (FOOD ESTATE) which is part of the mandate of Presidential Instruction No. 5 of 2008 concerning Economic Program Focus and Presidential Instruction No. 1 of 2010 concerning Accelerating the Implementation of National Development Priorities for 2010.

The East Kalimantan Provincial Government is paying close attention to this matter and is aware that East Kalimantan has large areas of land that can be utilized for agricultural development. Post Penas in Kutai Kertanegara, East Kalimantan stated its readiness to become the center of the National Food Storage through the development of a 200,000 Ha FOOD ESTATE. To support this determination, currently 343,461 hectares of land is available spread across 10 districts for investors to cultivate. In time, Prof. Riyanto as one of the members of the Food Estate development acceleration team will convey the latest progress that has been made by East Kalimantan Province in developing the Food Estate.

The food estate concept is based on the integration of sectors and subsectors in an agribusiness system by utilizing resources optimally and sustainably, managed professionally, supported by quality human resources, appropriate technology that is environmentally friendly and strong institutions. Food estate is directed towards an agribusiness system that is firmly rooted in rural areas based on the empowerment of indigenous/local communities which is the basis for regional development.

Negative views on Food Estate development such as the marginalized role of farmers who are threatened by the expansion of large-scale agricultural companies and large-scale land control by foreign investors need to be answered wisely with institutional arrangements such as the Delta Kayan Food Estate.

Delta Kayan Food Estate is managed with a modern agricultural concept based on science and technology, capital and modern organization and management. This management is arranged in partnership between investors and indigenous (local) communities in a dignified manner to answer the slanted assumption that the Food Estate will eventually turn people into laborers on their own land.

Thus, the design for the development of large-scale food cultivation areas (food estates) is designed based on four approaches, namely (1) regional development (cluster) approach, (2) commodity regionalization approach, (3) environmental sustainability approach and (4) community development approach.

The basis for the sustainability of the food development program (food estate) is firstly, an agro-climate that is suitable for food development, secondly, the availability of land for rice fields (10 districts covering an area of ​​343,461 Ha), thirdly the presence of investors (there are already 18 investors willing and ready to build rice/food estates in East Kalimantan) and fourthly, supporting the East Kalimantan MP3EI program which will ultimately make East Kalimantan as a new food barn for Indonesia, to boost pan resiliencegan East Kalimantan and National.

The development of the Food Estate in East Kalimantan is not without obstacles, cooperation between parties is needed to ensure that the Food Estate in East Kalimantan can be realized, especially infrastructure support, accelerated investment realization with ease of licensing at the central and regional levels as well as support from the Regency government in ensuring clear and clean land as well as designing partnership patterns between investors, local communities and regional governments to avoid social conflicts and culture later in life. Said the Governor of East Kalimantan through Assistant II.

Speaker presentation and discussion in the second session moderated by Drh. Syaiful Akhyar, M.Si Head of the Food Security and Extension Agency for East Kalimantan Province on the first occasion as a speaker by Ir. Jamil Musanif, Director of Business Development and Investment, Directorate General of P2HP, Ministry of Agriculture with the title Government Policy in the Context of Increasing Wide-Scale Agricultural Investment; presentation by the second resource person by the Head of BAPPEDA East Kalimantan Province, DR.Ir.H. Rusmadi.MS with the title presentation of Agricultural Development Policy in the Broadest Sense in East Kalimantan; third presentation by Prof.DR.Ir. Riyanto, M.Sc Chair of the East Kalimantan Province Food/Rice Estate Development Acceleration Team with a presentation entitled Food Estate Development in East Kalimantan; presentation of the fourth resource person by Drs.H. Yadi Sabian Noor, MM Head of the Regional Licensing and Investment Agency (BPPMD) of East Kalimantan Province and the fifth or final presentation by Ir. Muhammad Yasir, General Manager PT. Sang Hyang Seri (Persero) Regional Office VI with a presentation entitled Implementation of the GP3K program in the context of increasing food investment.

The meeting discussion received appreciation from participants, especially investors, who asked for an explanation regarding the status of food estate land from the East Kalimantan Provincial Government and the East Kalimantan Provincial Government through the Head of the Regional Licensing and Investment Agency, Drs.H. Yadi Sobian Noor, MM provided clear explanations and was ready to help in providing services to investors. (Public Relations of BAPPEDA East Kalimantan/Sukandar, S.Sos).