In an effort to help contribute to food security in Indonesia, Tenggara Strategics and the Centre for Strategic and International Studies (CSIS) Indonesia held a public discussion with stakeholders from the energy and food sectors, titled "Building food security: The contribution of energy to agricultural productivity," on July 16.

This event was the first in a series of discussions planned to be held until October. The public discussion was attended by representatives from the Agriculture Ministry, the Energy and Mineral Resources Ministry, the Indonesian Farmers and Fishermen Association (KTNA), PT Pupuk Indonesia (Persero) and an agricultural economics professor from the University of Lampung.

The speakers at the event recognized the importance of the continued supply of natural gas as a raw material for fertilizers at the right price to support Indonesia's agricultural productivity, in addition to agricultural effectiveness and regeneration of farmers.

• Mirza Mahendra, director of oil and gas program development at the Energy and Mineral Resources Ministry

Mirza explained that the fertilizer industry was a priority for the ministry’s allocation of natural gas due to its wide multiplier effect on the overall food sector.

"The Energy and Mineral Resources Ministry guarantees the availability of domestic gas for the fertilizer industry until 2030, while prices will be determined later by the government. Currently, the government has continued the fixed natural gas price policy [HGBT] for fertilizers and several other industries," he said.

However, Mirza further said, the government still faced challenges in distributing gas, which is sourced relatively far from the industries consuming it. The fact that Indonesia has an archipelagic geography makes distributing gas to industrial consumers more challenging.

• Mulyono, head of the food crop processing substance group, the directorate of food crop processing and marketing, the Agriculture Ministry

"The government's decision to increase the allocation of subsidized fertilizers to 9.55 million tonnes this year will meet 79 percent of fertilizer needs, and this is expected to help the ministry achieve its target of 53.98 million tonnes of unhusked rice grain production."

Furthermore, Mulyono explained that to support the sustainability of the agricultural sector, the Agriculture Ministry is ready to support the transition of agricultural programs to be implemented by the next administration.

• Sidi Asmono, head of the cooperation and advocacy department, KTNA

Sidi reminded participants of the importance of regeneration of farmers for the sustainability of the agricultural sector.

"In Indonesia, 70 percent of farmers are seniors, and the farmer regeneration campaign by the government has been ongoing since 2015 and needs to continue, to encourage more young people to enter the agricultural sector," said Sidi.

Additionally, Sidi predicted that extreme climate phenomena such as El Niño and La Niña would impact global food prices, and this would require efforts to boost domestic food production.

• Jamsaton Nababan, director of portfolio and business development, PT Pupuk Indonesia

Jamsaton revealed that fertilizers contribute 62 percent to food productivity and 23 percent to the cost structure of rice farming. Jamsaton explained that the largest factor influencing fertilizer prices is natural gas, one of the main raw materials in fertilizer production. Natural gas accounts for 71 percent of the production cost of urea fertilizer and 5 percent of NPK fertilizer.

"We appreciate the government's decision to continue the HGBT policy for fertilizers and the commitment from the Energy and Mineral Resources Ministry to guarantee a long-term gas supply for the fertilizer industry," said Jamsaton.

• Bustanul Arifin, professor of agricultural economics, the University of Lampung

Bustanul pointed out that in the first quarter of 2024, global fertilizer prices fell, driven by the decline in natural gas prices, which is good for agriculture productivity. This positive development is expected to continue with fertilizer prices continuing to fall throughout 2024 and 2025 amid China's fertilizer export ban.

However, Bustanul warned of possible negative external developments such as the risk of trade restrictions and political tensions in the Middle East, which is a source of global natural gas supply and other fertilizer raw materials.

Bustanul also highlighted the importance of the correct application of fertilizers by farmers to increase agricultural yields.

"Improper use of fertilizers will not effectively increase agricultural productivity. Therefore, farmers need to be educated and assisted in applying fertilizers more efficiently and avoid potential overuse," Bustanul explained.

• Riyadi Suparno, executive director of Tenggara Strategics

Riyadi explained that there was a strong relationship between fertilizer sales volume and rice output, making it important to maintain the supply volume of fertilizers, especially subsidized fertilizers.

"If the goal is to increase agricultural productivity, the HGBT should be applied to both subsidized and non-subsidized fertilizers sold domestically," he said.

The food sector is the foundation of community survival, so the incoming government needs to ensure the country's ability to continue guaranteeing national food security. Increasing agricultural productivity is key to ensuring that food is available in sufficient quantities at affordable prices for all Indonesians.