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Joint Research for the 2019 KAPEX: Enhancing Agricultural Productivity by Developing Environmentally Friendly Fertilizer Sectors in Indonesia

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Joint Research for the 2019 KAPEX: Enhancing Agricultural Productivity by Developing Environmentally Friendly Fertilizer Sectors in Indonesia Final Report Joint Research for the 2019 KAPEX: Enhancing Agricultural Productivity by Developing Environmentally Friendly Fertilizer Sectors in Indonesia Indonesian Agency for Agricultural Research and Development Indonesian Soil Research Institute 1 List of Contents 1. Introduction ....................................................................................................................................... 1 1.1 Background and Justification ................................................................................................ 1 1.2 Research Objectives ................................................................................................................ 2 1.3 Research Scope ........................................................................................................................ 3 2. Research Design ................................................................................................................................ 3 2.1 Methods .................................................................................................................................... 3 2.2 Field Survey Sites .................................................................................................................... 4 2.3 Data Processing and Analyses ................................................................................................ 4 3. Results and Discussion ...................................................................................................................... 4 3.1 Current Situation Related to the Fertilizer Sector in Indonesia ......................................... 4 3.2 Issues and Problems in the Fertilizer Sectors in Indonesia ............................................... 10 3.3 Relevant Policies and Programs to Encourage the Environmentally-Friendly Fertilizer Sectors .......................................................................................................................................... 11 3.4 Fertilizer Use in Indonesia ................................................................................................... 23 3.5 Eco-Friendly Fertilizer Production Movement by Independent Organic Farmers ........ 34 3.6 Economic Analysis of Organic Fertilizer Impacts ............................................................. 36 3.7 ISRI Research Results Related to Environmentally-Friendly Fertilizers ........................ 47 4. Policy Recommendations and Conclusion .................................................................................... 49 4.1 Lessons learned from the Korean Policy Experience ........................................................ 49 4.2 Conclusion ............................................................................................................................. 55 REFERENCES .................................................................................................................................... 57 ANNEX. ............................................................................................................................................... 59 List of Table Table 1. Allocation of subsidized fertilizers based on crop types and other sub-sectors (%) ............... 24 Table 2. Potential availability of raw materials for organic fertilizers in farmer groups, village and sub-district level, Tasikmalaya Regency, 2019 ..................................................................... 27 Table 3. Financial analysis of conventional rice farming based on farmer groups, Tasikmalaya Regency, West Java province (average per cropping season) ............................................... 28 Table 4. Financial analysis of semi-organic rice farming based on season, Tasikmalaya Regency, West Java province ................................................................................................................ 30 Table 5. Need and Allocation Amount of Subsidized Organic Fertilizer, 2019 ................................... 38 Table 6. Potential of Organic Fertilizer Production from Rice Straw, 2016 ......................................... 38 Table 7. Potential of Organic Fertilizer Production from Animal Waste, 2016 ................................... 38 Table 8. Benefit-Cost Ratio of Organic Fertilizer Industry .................................................................. 39 Table 9. Use of Variable Inputs by Wetland Rice Farm Ogan Komering Ulu Timur District, South Sumatera Province, 2018 ....................................................................................................... 42 Table 10. Costs and Revenues by Farm Category in Ogan Komering Ulu Timur District, South Sumatera Province, 2018 ....................................................................................................... 43 Table 11. Analysis of the Impact of Organic Fertilizer Use on Rice Farm Economy in Indonesia, 2018 ............................................................................................................................................... 46 Table 12. Effect of straw on the chemical and physical fertility of the Latosol lowland rice fields in West Java after 4 growing seasons (Sri Adiningsih, 1984) ................................................... 47 Table 13. Effects of the use of inorganic, organic, and biological fertilizers on dry weight of stover, amount, and weight of potato var. Ganola in the greenhouse................................................ 48 List of Figure Figure 1. Development of the area of Indonesian organic agriculture, 2007-2011 (Mayrowani, 2012). 6 Figure 2. Comparison chart of minimum stock and stock position subsidized organic fertilizers for 2016–2019 (Sudrajat, 2019) ................................................................................................... 8 Figure 3. Planning and regulation of proposed needs and allocation of subsidized fertilizers ............. 15 Figure 4. Distribution mechanism of subsidized fertilizers .................................................................. 16 Figure 5. Trend in rice harvesting area in Indonesia (M ha) ................................................................. 25 Figure 6. Distribution of paddy field cultivation area in Angga Jaya farmer group, Tasikmalaya Regency, West Java .............................................................................................................. 26 Figure 7. Exports of quality organic rice products produced by Simpatik farmers’ group, Tasikmalaya, Indonesia .............................................................................................................................. 35 Figure 8. Determinant Factors of the Organic Fertilizer Production System (Sardjono et al., 2012) ... 40 Figure 9. Customized fertilizer “Jeranti” .............................................................................................. 51 Figure 10. Government subsidy for the processing unit for organic fertilizers in Indonesia (Widyaningrum, 2019) ......................................................................................................... 53 Figure 11. Organic fertilizer factory facilities at Gaejin Farming Association Corporation in North Gyeongsang Province, South Korea ..................................................................................... 53 1. Introduction 1.1 Background and Justification The government of Indonesia has made food sovereignty as its national development priority. The RPJMN (Rencana Pembangunan Jangka Menengah Nasional, National Medium-Term Development Plans) of the government of Indonesia accordingly focuses on 1) stabilization of food security toward food self-sufficiency by increasing staple food production; 2) stabilizing food prices; 3) improving the quality of food consumption and nutrition by promoting balanced diets; 4) mitigating the effects of disasters affecting food security; and 5) improving farmers’ welfare (Bappenas, 2014; World Food Program, 2015). The direction of the policy of stabilizing food security through increasing staple food production is conducted by utilizing marginal or sub-optimal land such as acid upland and wetland soils, land in transmigration, and mining areas to support the increase of rice production, improved quality of contaminated soil fertility, and development of environmentally-friendly and climate-friendly food production with the implementation of organic production, water-saving agriculture and use of organic fertilizers (Bappenas, 2014). Overall, acid upland soils occupy 74.31% of the total land area in Indonesia (BBSDLP, 2014). Acid upland soils have low organic matter content, low pH, low base saturation and CEC, and low N-P-K content. Therefore, those soils are categorized as infertile soils. The government-designated strategic commodities such as rice, corn, and soybean that are cultivated in such soils cannot grow optimally. In addition, farmers in Indonesia have not implemented balanced fertilization yet and do not use organic fertilizers and biofertilizers or other environmentally-friendly fertilizers, so the production of their crops, including rice, corn, and soybean, tends to be suboptimal. For instance, soybean productivity in Indonesia remains at around 1.5 ton/ha (BPS, 2015), while Indonesia has several soybean varieties, especially those from the Indonesian Agency for Agricultural Research and Development (IAARD) that have the productivity potential to reach 2.0-3.0 ton/ha. To increase the volume of sustainable soil and productivity
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