Jakarta, The Indonesia Post – Head of Research Center for Indonesian Policy Studies (CIPS) Felippa Amanta said the G20 Presidency in Indonesia opened up opportunities for the agricultural sector in Indonesia to expand access to global markets.
“The G20 Summit can be used to encourage a fair and inclusive global trade system, including through the reduction of non-tariff barriers that have been a market barrier for farmers and MSMEs, as well as encouraging the improvement of a more productive and sustainable agricultural food system through strengthening farmers and MSMEs,” said Felippa in Jakarta, Thursday.
According to her, Indonesia needs to take advantage of the momentum of the G20 presidency to encourage the participation of farmers and MSMEs in the agricultural food sector towards the global market. Farmers and MSMEs in the food and agriculture sectors play an important role in economic recovery, but currently, according to her, they are still unable to compete with other countries.
The quantity and quality of local farmers’ production and post-harvest processing in Indonesia is still considered a challenge. Felippa explained several things that became challenges, including limited land which caused limited business scale, difficulties in accessing agricultural inputs which caused the need for affordable seeds or fertilizers to be insufficient, and low productivity.
Felippa also added that the research and development culture is still lacking so that the transfer of innovation, technology and knowledge is still minimal.
“The existence of a support system is also not sufficient, for example storage and processing, drying or cold chains for perishable items such as fruit and vegetables,” she said.
These limitations, she continued, were compounded by difficulties in meeting international standards related to food safety, quality and sustainability, one of which was required by the European Union. On the other hand, external challenges arise from increasing non-tariff barriers to trade.
“As many as 96 percent of the agriculture, livestock and fisheries sectors are MSME actors. So one of the keys to economic recovery is to restore MSMEs,” she said.
The results of the CIPS research show that farmers and MSMEs need to be given wider access to get involved in the value chain so that their competitiveness is more competitive. In addition, they are also expected to be able to supply raw materials to industries, both midstream and downstream, or to exports.
In addition to encouraging policies at the global level through the G20, Felippa also recommended several things for the Indonesian government, namely ensuring an inclusive and fair trade ecosystem.
In addition, the government also needs to reduce barriers to market access in the form of non-tariff barriers, because this is considered to increase trade transaction costs that are more burdensome for MSMEs and limit access to quality agricultural inputs.
CIPS recommends that the government undertake several policy reforms to strengthen support for sustainable agriculture, through the reallocation of agricultural subsidies to research and technology activities. (ojn/bbs)
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