East Kalimantan Environmentally Sustainable Development Strategy

63
Reaching average national yields by 2030 would increase the province’s
GDP from agriculture by IDR 3.2 trillion
GDP from food crops
IDR Trillions
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
2.3
0
2010 15 20 25 2030
SOURCE: Team analysis
+6% p.a.
+3% p.a.
GDP from estate crops, excluding palm oil
IDR Trillions
1.5
1.4
1.3
1.2
1.1
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2010
+6% p.a.
+2% p.a.
15 20
25 2030
Increased
Productivity
1 Scenario where East Kalimantan yields reach the forecasted average national yields in 2030; forecast national 2030 yields estimated by 2009 national
yields grown at historical national annual productivity improvements
percent p.a. by 2030. This would result in an additional IDR 3.2 trillion of GDP in 2030 (EXHIBIT
41). Improving yields requires better seedlings, inputs, and farming practices, all of which will
require substantial support to implement with many smallholders farmers on their lands. It will be
important to raise yields sustainability and not by overuse of fertilizers alone, which could result in
other environmental degradation.
Expanding aquaculture and estate crops on degraded land will allow the agricultural
sector to expand and increase incomes for smallholders. There are over 50,000 ha of small
plots and 400,000 hectares of mid-sized plots of degraded land that could be used for smallholder
estate crops. A wide variety of estate crops can be grown in East Kalimantan, but a mixture should
be used to balance the demands of capital, return, and jobs (EXHIBIT 42, EXHIBIT 43,). While
coconut generates high revenues of IDR 42 million per ha, it also requires a high capital investment
in the early years of IDR 128 million per ha. Cocoa, in contrast, yields only IDR 20 million per ha,
but requires much less investment at IDR 20 million per ha. Seaweed generates almost twice as
many jobs per ha as rubber, but requires twenty times the initial investment. Seaweed also has the
quickest payback of only two and a half years.
DRAFT
BAU
0.9
Exhibit 41
Required Policies and Institutions
Implementing these initiatives will require changes in how farmers manage their lands.
These farmers will require significant support to make these shifts. Efforts to raise productivity
and reduce emissions from ending fires should be done hand-in-hand, so farmers see both direct
benefits as well as the intangible value of reducing emissions. The traditional approach to working
with farmers has been through public research and government extension workers; however,
funding for these has decreased since decentralization and are not always the most effective
option. We aim to increase the private sector’s contribution to improving farmers’ livelihoods and
practices in addition to government support. In addition, working with all of East Kalimantan’s
smallholders directly is too large a task and requires some form of aggregation to work with