Securing Food and Nutrition in Asia

Responsible Business Forum highlights finance and small farms

By Gilang Ardana
Sunday, April 9, 2017

Making sure smallholder farmers get access to the right technology, financing and markets is the key to ensuring sustainability for the agricultural sector in Asia. That was the key takeaway of the 4th Responsible Business Forum (RBF), held in Jakarta on March 14-15.

The event was hosted by the firm Global Initiatives with the Indonesian Chamber of Commerce and Industry (KADIN), the Partnership for Indonesia’s Sustainable Agriculture (PISAgro) and the Indonesian Business Council for Sustainable Development (IBCSD).

The participants included business, finance companies, NGOs and several regional governments including Indonesia, Malaysia, China, the Philippines, Myanmar, Thailand and Laos.

The issue of food and nutrition security was the central agenda for the conference, calling for a more intensive, inclusive and holistic approach for future generations. As the conference revealed, more than 90 percent of the 570 million farms worldwide are managed by an individual or a family, relying predominantly on family labor. Thus, better engagement with smallholder farmers is crucial.

According to Indonesia’s Minister of National Development, Bambang Brodjonegoro, getting the formula right in helping small farms is a key to Indonesia’s commitment to achieving the United Nations’ Sustainable Development Goals (SDGs).

“We collectively need to end global hunger by the end of 2030, as framed by SDG Goal number 2, which emphasizes that achieving food security must be supported by sustainable agriculture,” Bambang told the event in his opening speech. “The implementation of SDG’s should be achieved so no one is left behind.”

IBCSD, represented by Shinta Kamdani, also underlined the important role of the private sector.

“Business leaders have the power to create the systemic change needed to enable food security,” said Shinta. “We are inviting companies, both multinationals and locals, to share their best practices. That’s why we believe the Responsible Business Forum is very important.”

Financing, land issues for smallholders

During the conference, financing and land issues emerged as the most pressing obstacles hindering the productivity of small farms. Minister of Agrarian and Spatial Planning, Sofjan Djalil, and the chairman of the financial services regulator (OJK), Muliaman Hadad, took part in the conference discussion, and shared their insights.

“The problem with land resources stems from the fact that food production is concentrated in Java, where it has the most fertile soil, the best irrigation network, as well as having the highest proportion of skilled labor in the nation” said Sofjan.

“However, Java is the most densely populated island, posing a serious constraint to improvement for the farmers’ quality of life. Individual land ownership is less than 0.3 hectare per capita. These problems have prevented Indonesia’s agriculture sector reaching its full potential.”

Muliaman said financial access is tied to land rights issues in Indonesia. Most of the farmers do not have land certificates, making it difficult for them to obtain formal financing. As a result, they source money from moneylenders.

“Formalizing land ownership is a part of opening access to finance. It’s easy to bring your land certificate to the bank as collateral, but without a land certificate it’s difficult,” he said. “[for this] digital finance is very important and financial technology should be part of this agenda.”

Getting specific: working group recommendations

The conference also held working groups to draft more sector-specific recommendations. This year, seven areas were featured: aquaculture and fisheries, cocoa, coffee, dairy, grains, palm oil and rice. In each working group, representatives of smallholder farmers were asked to share their experiences, especially concerning the challenges they face.

From there, the working groups’ recommendations were drafted and then presented in the main forum and voted on. Some of highest votes were cast for: improving transparency and knowledge exchange; improving smallholder competitiveness through access to finance; promoting adaptation to climate change and resource scarcity, better land management support from the government; and focusing research and development on agronomy, nutrition and post-harvest processing.

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