Drought and financial crisis leave Indonesia facing record food deficit

The combined effect of severe drought - attributed to El Niño - and the current financial crisis in Asia has left 7.5 million people in Indonesia facing acute food shortages, according to a joint FAO/World Food Programme (WFP) mission to the country in March. The effects of tight rice supplies on food security are exacerbated by the severe financial and economic crisis, which has sharply reduced the country's capacity to import food, feed and other agricultural inputs, according to the mission's report.

Indonesia, which fought hard to achieve self-sufficiency in rice production in the 1980s, faces a record import requirement of 3.5 million tonnes for the marketing year 1998/99, which ends on 31 March 1999. This figure assumes normal weather conditions for the second season crop in 1998, which provides about one-third of annual production. According to the report, the national Meteorological Agency is cautiously optimistic in predicting a normal season with 50 percent probability giving a renewed drought only a 15 percent chance. But data from previous El Niño events suggests that drought may persist in Indonesia throughout the year. (Go to FAO's El Niño Primer.) Continuing drought would further increase the rice supply gap, according to FAO/WFP. 

Rice is Indonesia's staple crop. An estimated population of 203 million people consumes an average of 149 kg of rice per caput per year, as compared to 26 kg of maize and 19 kg of wheat.

Rice production for 1998 is estimated at 47.5 million tonnes of paddy, 3.6 percent down on last year's harvest, over 6 percent down on the 1996 harvest of 50.6 million tonnes and 11 percent below the official target. More than 90 percent of the decrease in paddy production is a direct result of a reduction in planted area in response to the drought. When the rains came two months late at the end of 1997, many farmers had already planted crops such as maize, soybean and roots and tubers, instead of rice. Increases in production are forecast for these secondary crops.

The financial crisis has compounded difficulties for farmers, pushing up prices for vital inputs - such as quality seeds and fertilizer - and consequently further reducing the rice harvest. Prices of these inputs have soared with the 70 percent devaluation of the Indonesian rupiah. Food and rice prices have also doubled over the last 12 months.

The Indonesian government plans to import 1.5 million tonnes of rice between April and September 1998, leaving an uncovered deficit of 2 million tonnes. Large-scale international assistance will be necessary to meet the shortfall according to the FAO/WFP mission. This should be in the form of rice loans, grants, concessionary imports and targeted food aid. The report warns that the country will also need to import some 4 million tonnes of wheat during 1998/99, putting additional strain on its already overstretched import capacity.

24 April 1998

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