VZCZCXRO3474
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #2031/01 3450924
ZNR UUUUU ZZH
R 110924Z DEC 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 4109
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 04 JAKARTA 002031 
 
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 USAIDQs 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 IndonesiaQs 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 IndonesiaQs 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 IndonesiaQs poor 
families reveals the obstacles they must overcome to share 
in IndonesiaQs 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 
 
JAKARTA 00002031  002 OF 004 
 
 
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 described by the local 
official would be consistent with the five principles 
described by Secretary Clinton in recent speeches on Food 
Security Q 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 Q including 
Jakarta-based multilateral development institutions and 
international NGOQs 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 Q 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 NGOQs 
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 OQLakes through an 
agreement with USDA.  Based on the model developed in 
Indonesia, Land OQLakes 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 CenterQs mission is to improve 
 
JAKARTA 00002031  003 OF 004 
 
 
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 Foundation and U.S. companies 
such as Mars Inc. and Cargill. 
 
AMARTA, AN EMERGING SUCCESS 
 
¶7. USAIDQs 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). 
 
 
JAKARTA 00002031  004 OF 004 
 
 
¶10. ACTION REQUEST: Please continue efforts to have 
Indonesia considered for the food security initiative. 
 
HUME