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Concerns Loom Over Feasibility of Papua Mega Agriculture Project

Experts say Jokowi’s grand rice harvest plan for Papua will fail, as it would require the Government to round up US$2.9 billion and fly in more than 500,000 workers.

The controversial revival of a food and energy mega-project in the Papuan province of Merauke, dubbed the Merauke Integrated Food and Energy Estate (MIFEE), is doomed for failure due to its ambitious scope, experts say.

Professor Dwi Andreas Santosa is a specialist from the Bogor Agriculture Institute. According to him, the project, which aims to cultivate 1.2 million hectares of rice within a three-year period, will likely fail because the current government has not learned from Indonesia’s previous failure. “If the Government proceeds with the current concept, which is [a] food estate, then I could guarantee it will fail,” Santosa tells Indonesia Expat.

Under the food estate plan, the Government is encouraging foreign investment in local agriculture in order to build a supply of local food amid growing uncertainty surrounding global supply and demand. With this policy, the Indonesian Government hopes to decrease its dependence on imported food products over the next several years, particularly rice.

The Government plans to award the project to the private sector. “Why doesn’t the Government [instead] work together with local farmers who own less than two hectares of land? [It could] just allocate one more hectare to them,” says Santosa. According to him, allocating more resources to smallholder farmers, instead of giving the task to a large private company is the only way the Government can theoretically succeed in turning Merauke into an agricultural hub.

“In order to attract foreign investment, the Government has to spend a lot of money. The food estate concept is giving private companies the authority to cultivate land on a large scale, but no companies will want to do that because they will actually lose money if they must build the necessary infrastructure,” explains Santosa.

The current MIFEE project is projected to cost the Government a whopping Rp.40 trillion (US$2.9 billion), much more than the initial estimate of Rp.21 trillion (US$1.6 billion), according to the Agriculture Ministry. One of the project’s ad-hoc team members, Rudy Tjahjohutomo, says the initial estimate would only be enough for basic elements of the farming process, like grinding the rice. After taking into account the need for physical infrastructure, such as irrigation channels and access roads, the budget ballooned, says Tjahjohutomo.

Photo by Shubert Ciencia

With such large budget demands, Santosa believes the Government is set to repeat the failure of the Suharto administration, which also tried to build a one million-hectare food estate in Central Kalimantan in 1996, called the Mega Rice Project.

“Now the area has turned into a wasteland, with a loss of 56 million [square metres] of woods. The Government had to spend Rp.3 trillion for rehabilitation purposes,” recalls Santosa, who was also a member of the project’s environmental analysis team at the time. “The topography between Kalimantan and Papua is different, but the concept is exactly the same.”

Another ad-hoc team coordinator, Haryono, previously said the project would be divided into three phases, with each phase taking one year to complete. In the first phase, the Government would provide Rp.7 trillion (US$518 million) in funding to open 250,000 hectares of the food estate land in Merauke this year. However, the Agriculture Ministry’s Director General for Agriculture, Infrastructure and Facilities, Gatot Irianto, says there are only 10,000 hectares of land that are ready to be cultivated at the moment.

“This year we want to try 10,000 hectares first,” Irianto tells Indonesia Expat. “They’re already clear and clean [with permits].” He adds that the Government is still in the process of environmentally analysing the rest of the land needed for the project. Apart from that, it still must go through provincial spatial planning, something which stalled previous attempts to develop agriculture in Merauke, according to Irianto.

Photo by Jason Paris

While Irianto claims the 10,000 hectares of land to be cultivated this year have no permit problems, Papua’s natural resources and environment management agency head, Noak Kapisa, says that is not the case. Kapisa cites the example of the 400-hectare piece of land that was harvested in a recent ceremony to mark the beginning of the mega project.

“Most of the land is located on indigenous land,” Kapisa says, adding that the agency would further check the status of the land allocated for the project to prevent any disputes.

The idea of the MIFEE programme was born when former Merauke regent John Gluba Gebze established the Merauke Integrated Rice Estate (MIRE) in 2007 after former president Susilo Bambang Yudhoyono visited and made an appeal to transform Merauke into a national rice barn.

The programme allows up to 49 percent of foreign investment into local plantations, but has no requirement to secure a certain amount of crops for local needs. MIFEE has proven to be a tough project to implement, particularly because of land issues, as the multibillion-dollar initiative threatens conservation areas like virgin forests and water catchment areas, as well as the habitats of indigenous people in Papua.

There are also concerns over human rights abuses, including violations of land rights and the requirement to obtain free, prior, and informed consent. There is also controversy surrounding the displacement of local people via inflows of workers from outside the region.

President Jokowi said the mega project should take into account the needs of local people so it doesn’t end up like previous failed projects. Santosa, however, says it would be extremely difficult to achieve this due to the project’s implied magnitude.

“As many as 500,000 labourers need to be flown in for the project to be carried out. This will create huge social impact as there are only around 200,000 people living in the province with 55,000 indigenous people. There will be a sudden shift in demographics [which will create social conflicts],” he says.

In the end, however, Santosa agrees the Government needs to boost its food self-sustainability. However, he thinks the best route is by empowering small farmers in order to stop importing rice. In the first two quarters of last year, Indonesia imported 176,227 tonnes of rice, which was worth around US$76.2 million.

“Rice imports are detrimental as they make it hard for rice from local farmers to compete in the market,” explains Santosa.

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