Posts

How Agriculture is Ending Poverty in IndonesiaIndonesia has struggled with poverty since the Asian Financial Crisis of the late 1990s. However, the rate of poverty has been steadily decreasing over the years. In 1999, Indonesia’s poverty rate was a staggering 24%. In 2013, it had dropped to 11.4% and in 2019, it stood at 9.4%. Below are the ways agriculture is ending poverty in Indonesia.

Palm Oil Production in Indonesia: Providing Jobs and Alleviating Poverty

Palm oil is one of the most commonly used vegetable oils around the world and is found in half of grocery store items. Its popularity has skyrocketed globally since 1990, with global consumption growing from 14 million tons in 1990 to 63 million tons in 2015, 80% of which is supplied by Indonesia. After the Asian Financial Crisis, millions of Indonesians relied on the palm oil industry to relieve poverty. Between the years 2001 and 2010, 10 million Indonesians saw relief from poverty directly from working in the palm oil industry.

In 2017, 3.8 million Indonesians were working in the palm oil industry. Today,  17 million Indonesians rely on the palm oil industry for work, and 7% of Indonesia’s land is used for its production. Palm oil agriculture is ending poverty in Indonesia because it directly helps farmers in rural areas. Indonesia’s rural areas are most affected by poverty. However, by maintaining and increasing funding for palm oil production, families living in these rural regions can lift themselves out of poverty.

Indonesia’s COVID-19 Farmer Support

Farmers in Indonesia play a significant role in stabilizing the economy during the COVID-19 pandemic. The Ministry of Agriculture saw the necessity of supporting the many farmers of Indonesia—who make up 30% of the population—by providing necessities such as seeds and fertilizer.

The government is also providing 34 trillion Indonesian Rupiahs, or $2,284,494,000, in loan subsidies. The 2.7 million farmers also received 300,000 Indonesian Rupiahs, or $20, which is typically one week of wages, for three months.

USAID: Partnering with Local Farmers

The United States Agency for International Development (USAID) partners with farmers in Indonesia to help build a better livelihood, reduce poverty and help the economy. USAID ensures that farmers have a consistent supply of necessary resources needed to produce food at a high quality. This food security ensures that people see long-term benefits and avoid issues of malnutrition, weakened immune systems and cognitive health issues. At the same time, USAID is committed to achieving these goals in an environmentally-friendly way.

In its 2019 Annual Report, USAID clarified how its assistance with agriculture is ending poverty in Indonesia. USAID gained 2.9 hectares of farmland, which supports the livelihood of 11,400 people. Rubber farmers also received training on environmental sustainability and reducing the risk of forest fires, which have reduced by 74%. Additionally, 30% of farmers are now producing government-certified rubber products at a higher quality, which have increased in price from $0.50/kg to $0.80/kg. In addition, productivity has increased by 2.5%. USAID is focused on long-term goals and is expected to acquire 100 million hectares of forest land by 2030.

Agriculture is ending poverty in Indonesia at such a high rate because the agriculture industry is most effective at raising incomes compared to other industries. In a 2016 study by the World Bank, 65% of impoverished workers were able to make a living by working in agriculture The agriculture industry has made great efforts to eradicate poverty in Indonesia. Improvements in the practices of agriculture have correlated in better incomes and lifestyles for farmers, and are projected to steadily increase.

—Karena Korbin
Photo: Flickr

India’s Agricultural Supply ChainThe COVID-19 pandemic has indubitably altered the way goods and services are distributed. India, a country that relies heavily on agriculture, is an example of how agricultural economies falter in the face of a pandemic. India has the second-largest arable land area in the world, with a coastline of over 7,500 kilometers. In fact, agriculture is India’s largest employer, comprising 42% of the workforce. This means that disruptions to India’s agricultural supply chain hurt the wellbeing of its citizens.

Before the coronavirus, India was already experiencing some setbacks in agricultural production. First, India’s economy was growing at a slower rate, compounding existing problems of unemployment, low incomes, rural distress, malnutrition and inequality. Second, India maintains a large informal sector. An informal sector is one in which people do not report their incomes, and hence do not pay taxes on these incomes. Out of India’s 465 million workers, around 91% were informal workers in 2018. This sector is especially vulnerable because it comprises many agriculture workers and migrant workers. If India’s agricultural supply chain is disrupted, then these workers’ sources of income are consequently affected.

Lockdown Regulations

In response to lockdown orders, informal workers migrated back to their rural hometowns. They were hoping to wait out the virus and follow restrictions. As this period overlapped with the harvest season in mid-April, the annual harvest was disrupted. Major liquidity issues ensued, notably with the June crop.

During a lockdown, informal workers do not have access to their usual sources of income. On the other hand, many workers in the formal economy retain regular salaries. It is estimated that in the first wave of the pandemic, almost 10 million people returned to their villages, half a million of them walking or bicycling. As a result of this economic stoppage, the International Labor Organization has projected that 400 million people in India risk falling into poverty.

Transportation Restrictions

Among other industries, COVID-19 is disrupting India’s agricultural supply chains. In order to slow the progression of the virus, authorities heavily restrict movement across state borders, which blocks the movement and sale of crops. In addition, the lack of workers has interfered with the upkeep of machines and modes of transportation. Overall, limits on movement and a reduced workforce restrict the availability of food in India.

The transportation issue also translates into a range of export challenges. India’s agricultural supply chain serves domestic food consumption. In addition, it also is a top exporter of agricultural produce in the world. Unfortunately, many major economies have implemented similar lockdown restrictions, which creates backlogs in supply chains. For instance, around half a million tonnes of Indian rice is locked up in the supply chains, while perishable items cannot be processed due to fear of delayed transit. Nearly $40 billion of India’s agricultural exports are being severely affected by these repercussions of the pandemic.

Recovery

Even with these injuries to India’s agricultural supply chain, the country is expected to remain among the world’s fastest-growing economies. But these agricultural problems still call for new solutions.

Following COVID-19, digital innovations such as the eNAM (electronic National Agriculture Market) offer a pan-India electronic trading platform for farmers. The government recommended that states discourage the direct sale of crops and that farmers opt for rural wholesale markets. The government also launched an app that helps farmers and traders find transport vehicles.

Furthermore, several nonprofit organizations are working to ensure food security in India. For example, Rise Against Hunger India focuses on distributing meals and life-changing aid in rural India, after the organization noticed a lack of food supplies during the COVID-19 pandemic. The executive director, Dola Mohapatra, spoke about the rising hunger and food security concerns in India, giving special mention to the unstable incomes of informal workers and other daily wage workers.

Although India’s agricultural supply chain is currently facing issues, the government is working to overcome these challenges with innovations that expedite the buying and selling of agricultural materials.

Elizabeth Qiao
Photo: Pixabay

 agricultural sector

Kyrgyzstan is a mostly mountainous country situated between Kazakhstan and China. Its population is mostly Kyrgyz, with an Uzbek minority. Most of the population lives in the flatland regions, with only sparse settlements in the mountains themselves. The country also ranks as one of the poorest countries in the world, with numerous contributing factors to its low GDP, including the agriculture sector in Kyrgyzstan. Since leaving the Soviet Union, Kyrgyzstan has lacked a reliable source of resources and funds beyond their own borders; and despite trade, they struggle economically with exports.

Compounding poverty, the agricultural sector of Kyrgyzstan also remains underdeveloped despite the nation’s progress. Despite accounting for 40 percent of the country’s labor force, agricultural workers experience widespread poverty and food shortages, especially those living in rural areas. The lack of progress and modernization in this area is coupled with a combination of economic weakness and lack of oversight from a shifting government to create a stagnant environment. However, the aid programs discussed below are boosting the agricultural sector.

Agriculture in Kyrgyzstan is mostly a local affair. Families grow food for themselves in what is called “sustenance farming.” Large-scale commercial farming is still small compared to similar operations in other countries. Despite this, several foreign aid programs have been implemented to improve the agricultural sector.

Aid Programs – IFAD

IFAD is an organization dedicated to helping rural communities in developing nations. Through low-interest loans and investments in helping poor households and communities, they help spur growth in these sectors and countries. In Kyrgyzstan, they focus specifically on improving livestock productivity and improving livestock farmers’ access to better markets.

The funded programs provide training in techniques for rural farmers while guiding them to better markets. These programs teach better business practices, which leads to greater earning potentials for families. Finally, natural disaster insurance is also provided for these same households and communities, protecting families against extreme weather.

USAID’s Farmer-to-Farmer program

One of two major agricultural endeavors in Kyrgyzstan, the Farmer-to-Farmer project was a program implemented over five years, finishing in 2018. Similar to IFAD, the program focused on families and communities who relied on small farms and agribusinesses for income. This included providing agricultural training to improve yield as well as business training to improve market reliability and profit. Without proper training, small farming businesses often yield small quantities of product not enough to constitute “food security.”
By the time the program was complete, 21 agricultural education assignments were completed. These included the education of local businesses – leading to newly established guidelines and quality standards for food – as well as students and graduate students of agriculture. The program reached a total of 4,320 recipients, with 3672 successfully trained.

Agro Horizon

The other major agricultural endeavor of USAID in Kyrgyzstan, Agro Horizon, is still ongoing. Partnering with several corporations, Agro Horizon has provided over $30 million dollars in aid. The focus has been on the commercialization and industrialization of Kyrgyzstan’s agriculture in an effort to make it more profitable.
The program’s investments have taken several forms, both in modernizing production and processing methods, as well as grants and training opportunities for over 100,000 households. Thanks to a partnership with a local agricultural producer, the first commercial-scale production of safflower seed was launched. Similarly, the first Kyrgyz modern slaughterhouse following international standards was established. The program has already helped establish 1,200 jobs providing more stable income than previous.

There are still many opportunities to improve agriculture in Kyrgyzstan. Areas of untapped potential and continued aid stand to make agriculture in the country not just sustainable, but profitable. So long as aid for the agricultural sector in Kyrgyzstan continues, Kyrgyztan’s agriculture sector might be able to pull itself up from its current state.

– Mason Sansonia
Photo: Flickr