El Niño-related drought, considered to be the worst in half a century, has reduced food production in Indonesia and exacerbated forest fires, adversely affecting the food security of the poorer sectors of the population. The Asian financial turmoil, which affected several countries including Indonesia, has also played its part in aggravating the food situation through a reduced import capacity and domestic price rises due to currency devaluation. The price rises, which sparked- off riots in several towns, are reported to have been accentuated by panic buying and hoarding by traders.
Paddy production in 1997 is provisionally estimated to be some 2 million tonnes below the previous year’s output of 51.1 million tonnes, mainly reflecting the drought damage to crops harvested in the later part of the year. The maize crop has also been affected. In addition to foodcrops, drought has reduced the output of coffee, cocoa and rubber, resulting in a contraction in incomes and erosion of purchasing power of the farmers dependent on such crops. The food supply situation is tight in areas which have been seriously affected by drought such as central Irian Jaya, East Timor and parts of central Java and Yogyakarta, which have been seriously affected by drought. Throughout the country, food prices have increased sharply and food stocks are dwindling. The food stocks held by the National Food Logistics Agency (BULOG) are being replenished through imports. The Government has prepared a drought response plan for eight months (October 1997-May 1998) and taken a number of measures to cope with the food supply difficulties.
Current indications are that the output of the main season rice crop for harvest in the coming months would be somewhat reduced. Planting of this crop which normally starts in October/November was delayed due to lack of moisture affecting much of the traditional rainfed rice areas. With water reserves in wells and rivers reported to be low in some of the main producing areas, a prolonged shortfall in precipitation in the next two months could seriously reduce yields and production in 1998. As a result of the potential decline in production, rice imports are expected to increase substantially over last year’s volume of 950 000 tonnes and could exceed 2 million tonnes in 1998.