Introductory Remarks of President of the Republic of Indonesia at Limited Meeting (through Video Conference) on Farmers and Fishermen Corporations in Realizing an Economic Transformation, Tuesday, 6 October 2020, at the Bogor Presidential Palace, West Java Province
Date 6 Oktober 2020
Assalamu’alaikum warahmatullahi wabarakatuh,
May peace be upon us all.
Honorable Vice President,
Distinguished Ladies and Gentlemen.
We have discussed this matter of creating corporation for farmers and fishermen several times. This move aims to improve their welfare. In addition, it also aims to realize economic transformation.
Let me remind you all that amid the pandemic, agriculture sector has given the highest contribution for the national economic growth, which has been slowing down. In the second quarter, agriculture sector showed a positive growth of 16.24 percent and we have to maintain this growth in order to bring significant impacts on improving welfare of farmers and fishermen alike.
Once again, I have stated that farmers and fishermen must be encouraged to form groups and corporations. Therefore, we can achieve efficient economies of scale which can provide better access for farmers and fishermen to the finance, information, technologies, and also to improve efficiency and marketing.
The mindset must also be switched from focusing on-farm activities to off-farm activities such as post-harvest and business activities by developing business process starting from production to post-harvest. I am aware that farmers and fishermen corporation model has not been well-implemented on the ground. Indeed, there are farmer groups, fishermen groups, but they have not been connected with state-owned enterprises (SOEs) or large private companies.
For that reason, I would like to emphasize several points of note. First, I want us to focus on establishing a maximum of one or two business models for farmers or fishermen corporations in a province until they are well-implemented. This model will then be used as a benchmark to be followed by other provinces, other farmer groups and fishermen groups. Based on my experiences, I believe there will be many farmers and fishermen groups who are willing to model and follow successful and prosperous corporations.
Second, the role of SOEs, private sector, and Regional-owned Enterprises is not only as an off-taker but also to guide farmers and fishermen corporations until an effective business model is well-established. We have not get that far yet. In fact, several years ago, I ordered my Cabinet to study pepper corporation in Malaysia and cow corporation in Spain. We can follow some successful business models, but I have no idea why it has not been realized as of now. We have to establish a business model ecosystem that is connected with a banking system and technology innovators, and coupled with improvements in management, including, interventions in the processing of crops, from packaging, branding, to marketing strategy.
Third, once again, we must strengthen this business ecosystem in an integrated manner. Therefore, I have ordered ministries and institutions to strengthen the ecosystem that is conducive to the development of farmers and fishermen corporation by preparing supporting regulations.
And that concludes my remarks.
I thank you.
Translated by: Rany Anjany
Reviewed by: M. Ersan Pamungkas