Benget Besalicto Tnb., The Jakarta Post, Jakarta | Sat, 03/07/2009 2:19 PM
Lack of certification has been blamed as the main factor behind the lack of competitiveness of Indonesia's agricultural products, both domestically and internationally, an agribusiness consultant said Friday.
Ernest E. Bethe III, program manager of agribusiness for the International Finance Corporation's (IFC) Indonesia Advisory Services, said the lack of certification stemmed from the absence of awareness on the need for certification for the international market.
He also blamed the fact that certification agencies in the country were not fully developed yet.
He pointed out that 20 years ago, Indonesian agricultural products could still manage to compete in global markets.
During that period, he went on, the Singaporean market was flooded with Indonesian agricultural produce. But now, even in the domestic market, local produce cannot compete with imported foods.
There have been several cases where Indonesian food products, especially fresh produce, have been rejected in overseas markets due to problems related to pesticide content or other harmful chemical substances.
Some standardization and certification agencies have set up operations in the country, but are running at less than peak effectiveness, Bethe said.
"I think it is mainly related to the lack of certification and the problem of inefficiency in the supply chain," he said.
He added that poor infrastructure in supporting the supply chain had fueled the need to import agricultural produce, because under such conditions, imported foods became much cheaper.
"We've also witnessed that it is very costly to acquire certification for food products here," he told a media briefing for an upcoming conference on the sustainable agricultural supply chain.
"This is because producers have to ask foreign certification agencies to ensure their produce is acceptable for the international market."
The conference will run from March 12-13, and will be organized by the IFC, an institution that operates under the World Bank to promote growth and reduce poverty in developing countries like Indonesia, in partnership with the private sector.
Bethe said the IFC conference would feature a number of experts in supply chain management, who would share best practices with executives from emerging Asian companies.
There will also be technical workshops on supply chain management, which will be combined with interactive strategy sessions and networking opportunities.
"Participants will receive advisory services and information on consumer market trends," Bethe said.
"All will be tailored to the new realities in the face of the worldwide economic crisis, rising food prices and increasingly stringent import specifications and standards."
Brigit S. Helmes, the head of advisory services at IFC Indonesia, added the conference was part of the institution's program to target about 900,000 farmers for training in the supply chain management as a way to increase their income over the next five years.
She said that the IFC, in cooperation with the Smallholder Agribusiness Development Initiative (SADI), would commit a total fund of US$38 million this year to train farmers.
But she pointed out this would be done in cooperation with companies involved in the supply chains of certain agricultural products, and not do it directly with farmers.
SADI program director Jacqueline Pomeroy said SADI, which is fully funded by the Australian government, had so far focused its training programs in four provinces in the eastern part of Indonesia: South and North Sulawesi, and East and West Nusa Tenggara.
It has provided about Rp 1.1 billion for each of 24 subdistricts in the provinces, or a total fund of about Rp 24 billion, to train farmers.