VZCZCXRO1999
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #2024/01 3440357
ZNR UUUUU ZZH
R 100357Z DEC 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 4098
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS COLL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/USDA FAS WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 JAKARTA 002024 
 
SIPDIS 
 
AIDAC FOR ANE, EGAT 
DEPT FOR COS, F, OES AND EAP 
COMMERCE FOR NOAA 
 
E.O. 12598: N/A 
TAGS: EAGR EAID ETRD SENV PREL ID
SUBJECT: 2010 FOOD SECURITY PLANNING: INDONESIA 
 
REF: (A) STATE 097423; (B) JAKARTA 01583; (C) JAKARTA 001808 (D) 
JAKARTA 001473 
 
¶1. SUMMARY:  Substantial potential exists for Indonesia to achieve 
greater food security through cash crops and fisheries, and to 
replicate its successes in other developing countries in the region. 
 Indonesia has over 110 million people living on less than $2 dollar 
a day and around 13 million malnourished children.  The Government 
of Indonesia (GOI) is in the process of preparing a medium term plan 
which includes the major areas for food security actions.  Indonesia 
could serve as an incubator for pilot food security activities. USDA 
has a track record of successful partnerships in Indonesia. 
USAID/INDONESIA is developing a new program to improve food security 
by increasing employment and incomes for vulnerable rural families. 
Indonesia USAID's program will address basic rural needs: investment 
in agricultural universities for teaching, research and extension; 
promotion of small enterprises for agricultural inputs, crop 
processing and marketing; and public private partnerships to promote 
horticulture, cocoa and coffee. Nutrition issues will also receive 
attention.  Given the needs and potential, the Mission requests that 
Indonesia be considered for the food security initiative.  End 
Summary. 
 
FALTERING RURAL ECONOMY 
 
¶2. Almost half of Indonesia's 240 million population lives on less 
than $2 a day (Ref B and C).  Thirteen million children are 
malnourished.  Most poor families live in rural areas and depend on 
the agriculture sector for family incomes.  Indonesian agriculture 
has been neglected by the GOI and donors for more than a decade.  As 
a result, the rural small farm sector is falling behind the urban 
economy.  The GOI gives high priority to self-sufficiency in rice, 
sugar, soybeans, corn and beef.  However, the best opportunities for 
raising rural family incomes, reducing poverty, and increasing food 
security are in small-holder cash commodities: horticulture and fish 
for the demanding urban market, and coffee and cocoa for export. 
Transforming agricultural and fisheries production, to meet ready 
markets, requires determined, far-sighted investment by the GOI and 
donors.  To revitalize Indonesia's rural agriculture sector, the 
U.S. and other donors need to return to substantial, steady 
investment in the rural agricultural sector, giving first priority 
to agriculture and fisheries institutions for teaching, research and 
extension. 
 
POVERTY AND HUNGER 
 
¶3. Reducing poverty in Indonesia is less about increasing production 
of staples than about having well designed rural employment and 
income strategies, as well as effective policies and institutions. 
Efforts to reduce poverty and to increase food security in Indonesia 
face a range of challenges including widespread bureaucratic 
inefficiency and political corruption.  A profile of Indonesia's 
poor families reveals the obstacles they must overcome to share in 
Indonesia's success as a middle-income nation.  Information from the 
2004 National Social and Economic Survey (SUSENAS), analyzed in 
detail by the World Bank in 2006, shows the underlying problems: 
 
75% of low income workers are in the informal sector; more than 60% 
of poor families depend on income from agriculture; 
55% of the poor have less than a primary education and 16% are 
illiterate; 
50% of the poor lack access to clean water; 75% do not have adequate 
sanitation; 
25% of children under five are malnourished; Lack of adequate 
economic infrastructure such as reliable rural roads and efficient 
ports constrains growth for agriculture and agri-business. 
 
INDONESIAN FOOD SECURITY STRATEGY 
 
¶4. The new GOI is busy preparing a five year medium term plan. The 
plan is expected to adequately cover food security issues and serve 
as a basis for country owned joint action.  Food security is 
definitely a high national priority, although many Indonesian think 
in terms of self-sufficiency, especially in rice, sugar, soybeans, 
corn and beef.  It is understood that the President will be 
appointing a minister level person to head the food security 
efforts. 
 
INDONESIA AS AN INCUBATOR FOR DEVELOPING PILOT FOOD SECURITY 
INITIATIVES 
 
¶5. In terms of Global Food Security initiatives, Indonesia is no 
longer in the category of a poor country.  In the words of a 
high-level Indonesian Food Security official, Indonesia has 
graduated from the standard donor-recipient development assistance 
model and is ready to participate in a new model.  This new model as 
 
JAKARTA 00002024  002 OF 003 
 
 
described by the local official would be consistent with the five 
principles described by Secretary Clinton in recent speeches on Food 
Security - including the need to improve coordination at every 
level.  The new model would also emphasize investment in country-led 
plans, and the importance of close working partnerships with 
bilateral and multilateral institutions - to include private sector, 
university, and NGO participation. 
 
-- A number of Indonesia-based stakeholders - including 
Jakarta-based multilateral development institutions and 
international NGO's with decades of local experience - believe 
Indonesia is uniquely positioned to serve as an "incubator" for 
pilot food security initiatives.  This belief is based on a number 
of factors, including the diverse food security-related conditions 
throughout the archipelago; the long-established working 
relationships among the various stakeholders - to include 
bilateral/multilateral institutions; the NGO community; and 
university and private sector institutions; and the successful 
implementation and sustainability of previous food-security and 
development initiatives. 
 
-- The Country Director for the World Food Program specifically 
expressed her opinion in a meeting with Ambassador Hume that the WFP 
would like to coordinate with other stakeholders in developing 
"pilot initiatives" in Indonesia for their programs aimed at 
maternal and childhood nutrition programs.  These programs would be 
targeted to the neediest areas in Eastern Indonesia with the goal of 
working with various stakeholders in a fully coordinated matter - to 
include the United States and other bilateral and multilateral 
partners.  Once implemented, these projects could be replicated 
throughout the region through the assistance of the respective 
stakeholders, including Indonesian stakeholders. 
 
USDA DEVELOPMENT ASSISTANCE PROGRAMS IN INDONESIA: A TRACK RECORD OF 
SUSTAINABILITY THROUGH PARTNERSHIPS 
 
¶6. From 1999 to 2004, Indonesia was one of the largest recipients of 
USDA food assistance programming.  In many cases, the programs 
implemented through participating NGO's became models for their 
programming in other countries.  Thus, there is a track record of 
success in the development of pilot initiatives in Indonesia.  Once 
developed in Indonesia, the NGOs replicate the model in third 
countries via participating stakeholders.  Common ingredients of 
successful models included an emphasis on private sector 
involvement; creating sustainability beyond the USDA funding; and 
ensuring proper coordination among the various stakeholders. 
Examples of successful models include the following: 
 
-- Susu Sekolah:  Susu Sekolah is the local term used for the School 
Milk Feeding Program funded through the USDA Section 416(b) program 
beginning in 1999.  The program included several government, private 
sector and NGO partners and was implemented by Land O'Lakes through 
an agreement with USDA.  Based on the model developed in Indonesia, 
Land O'Lakes has successfully conducted similar school milk feeding 
programs in several other countries in Southeast Asia and South 
Asia.  In Indonesia, milk consumption has tripled over the past 
decade, due in large part to the Indonesian dairy processors 
involvement in USDA school feeding programs. 
 
-- SEAFAST Center:  The Southeast Asia Food and Agricultural Science 
and Technology (SEAFAST) Center began as a partnership between the 
U.S. Department of Agriculture (USDA), Texas A&M University, and 
Bogor Agricultural University (IPB).  At the time, it was the only 
USDA food assistance program implemented by a Land Grant University. 
 Based at IPB, the SEAFAST Center's mission is to improve food 
safety and nutrition in Indonesia and throughout Southeast Asia 
through food science education, faculty development, research, and 
product development.  In pursuit of this mission, the SEAFAST Center 
is successfully pioneering linkages between industry, academia and 
government.  Though USDA funding ended in December 2008, SEAFAST has 
continued to implement related activities by using its own resources 
or by leveraging resources from the private sector.  By doing so, it 
has maintained its university linkage with Texas A&M and has 
recently expanded its outreach to include other university and 
private sector institutions in Southeast Asia. 
 
-- Cocoa Pest and Disease Management:  Indonesia is a major cocoa 
exporter and an important source of cocoa for U.S. chocolate 
manufacturers.  Its cocoa production, however, is threatened by pest 
and disease.  To help address these issues, USDA provided funding to 
ACDI-VOCA through the Section 416(b) program beginning in 2000. 
ACDI-VOCA used the model developed in Indonesia and has since 
successfully implemented similar programs in other countries in 
Southeast Asia, South America and West Africa.  In Indonesia, many 
of the extension programs have been sustained through local 
government extension offices with support from the World Cocoa 
 
JAKARTA 00002024  003 OF 003 
 
 
Foundation and U.S. companies such as Mars Inc. and Cargill. 
 
AMARTA, AN EMERGING SUCCESS 
 
¶7. USAID's current agribusiness activity AMARTA supported value 
chain development for 10 high-value commodities by increasing 
productivity, establishing marketable quality, enhancing access to 
new and better markets, and advocating improvements in the 
regulatory environment and infrastructure.  AMARTA is now 
concentrating on horticulture, cocoa and coffee as the most 
promising areas.    AMARTA provides long- and short-term technical 
assistance, public outreach and advocacy, limited commodity support 
and training and conferences to address the quality, marketing, 
institutional, and policy advocacy issues. 
 
USAID ECONOMIC GROWTH PLANS FOR INDONESIA 
 
¶8. Economic growth that benefits the poor is the main route to food 
security and poverty reduction.  The poor are producers, 
entrepreneurs and workers who must find ways to increase 
productivity and to increase sales.  USAID aims to spur growth by 
increasing production of selected high-value crops to generate 
employment and incomes, and improving the policy environment for 
encouraging employment, long-term savings, and poverty reduction. 
 
In agriculture USAID will build on the results of AMARTA and 
concentrating on horticulture, coffee, and cocoa, USAID will focus 
its assistance on increasing incomes, food security, and ability to 
adapt to climate change by: 
 
A) Raising agricultural productivity through strengthened capacity 
of leading Indonesian agricultural universities through linkages 
with U.S. land grant universities. 
 
B) Improving the GOI extension system to deliver production- and 
income-enhancing services to farmers. 
 
C) Reducing barriers to market access by increasing the capacity of 
farmer associations and agribusinesses to advocate for less 
restrictive regulations. Support macroeconomic and sector polices 
that provide the necessary environment for economic growth. 
 
Nutrition is also of concern to USAID as surveys of maternal and 
child nutrition continue to show substantial malnutrition. 
Currently around 13 million children are estimated to be 
malnourished. 
 
With additional funds, the new agricultural program can be 
substantially expanded to deepen and broaden interventions. 
 
FISHERIES 
 
¶9. Another potential action to further food security in Indonesia is 
to support the sustainable development and management of fisheries. 
In particular, a valuable contribution would be the establishment of 
an Indonesia-U.S. Center for Sustainable Ocean Fisheries (Ref D). 
 
¶10. ACTION REQUEST: Please continue efforts to have Indonesia 
considered for the food security initiative. 
 
HUME