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Cablegate: Naming Indonesia As a Priority Country for Food Security

VZCZCXRO4370
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEJJA #1808/01 3030747
ZNR UUUUU ZZH
R 300747Z OCT 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 3690
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS COLL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/USDA FAS WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 JAKARTA 001808

SIPDIS

DEPT FOR COS, F, OES AND EAP
COMMERCE FOR NOAA
USAID FOR ANE, EGAT


E.O. 12598: N/A
TAGS: EAGR EAID ETRD SENV PREL ID
SUBJECT: Naming Indonesia as a Priority Country for Food Security

1. Summary and Action Request. Food security is a priority for
President Yudhoyono, and U.S. assistance would yield concrete
poverty-alleviating results for up to 150 million vulnerable
Indonesians. Indonesia suffers from a high incidence of food
insecurity, particularly in eastern regions where conditions
resemble Sub-Saharan Africa. Indonesia has shown it has the
capacity to increase agricultural productivity but still needs
assistance to tackle the chronic food insecurity that grips multiple
provinces. Food security would provide an important new area for
collaboration with Indonesia in international fora like the G-20,
and translate into deeper collaboration on a range of other priority
global issues.

2. Action Request: Post requests that President Obama inform
President Yudhoyono that Indonesia has been selected as a priority
country for food security assistance during their planned November
bilateral on the margins of APEC. End Summary and Action Request.

150 Million Vulnerable Indonesians
----------------------------------

3. Approximately 150 million Indonesians (out of a 240 million
population) live close to or below the poverty line, and more than
60 percent of poor families depend on agricultural income. Half of
Indonesia's population live on less than $2 per day and spend
two-thirds of their income on food. Every 10 percent increase in
the cost of rice results in another 2 million people falling into
poverty. The unprecedented rise in food and fuel prices during 2008
put tremendous pressure on this segment of the population. Food
prices have since stabilized, but adverse weather or external shocks
could lead again to a rapid deterioration. High land fragmentation
in densely populated areas as well as erratic rainfall attributed to
climate change in the eastern part of the country adversely affect
the large population which depends heavily on agriculture.
Indonesia has made significant progress in food production, but
failure to maintain or improve competiveness will have serious
consequences.

4. According to the World Food Program (WFP), as many as two-thirds
of all Indonesian provinces have areas which suffer from chronic
food insecurity. WFP estimates 13 million children in Indonesia
suffer from malnutrition. Conditions are particularly dire in
eastern provinces, which the outgoing WFP Country Director has said
resemble those in Africa's Sub-Saharan countries. In that region,
chronic malnutrition rates for children under five - already an
alarming 37 percent nationwide - has ranged as high as 60 percent in
recent years. Acute malnutrition rates for children under five - 13
percent nationwide - are 20 percent or higher in the eastern
regions. Nationally, 18 percent of children in 2008 were
underweight, while estimates in eastern regions ranged above 40
percent. Conditions for maternal health and nutrition are equally
critical in these same regions.

Numerous Opportunities for Substantial Impact
---------------------------------------------

5. Countless opportunities exist for fruitful long-term cooperation
on research, training, and capacity building between Indonesian and
U.S. institutions, including land grant universities. Indonesia has
the basic research, training and extension institutions, but it can
benefit greatly from linkages and joint programs with U.S.
institutions. U.S. assistance can strengthen this capacity by
assisting research, training and extension down to the district
level - an area officials say is a top priority. With the aim of
not only increasing production but also incomes in rural areas to
support access to food, high potential areas of cooperation include
grains and cash crops like cocoa, coffee, fruits and vegetables.
Agroforestry initiatives that combine food production with
reforestation and land use policies can be part of an integrated
program aimed at both food security and climate change.

6. Indonesian officials also recognize that food security in
Indonesia is inextricably tied to the ocean. Over 60 percent of
Indonesia's protein supply is derived from fishery products.
Improving Indonesia's ability to protect and manage its domestic
fishery and participate in international pelagic fisheries
management is critical to both food security and economic
development. Indonesia's coral reefs (20 percent of the world's
total), mangroves and sea grass ecosystems constitute the spawning,
nursery and feeding grounds of large number of marine animals. This
biodiversity supports the livelihood of 34 million people and
provides 6.8 million jobs.

Why Indonesia?
--------------

7. Country Leadership and Capacity: President Yudhoyono's
establishment and chairmanship of the National Food Security Council
demonstrates the degree to which food security is a high national
priority. At the G-20 and other multilateral fora, Indonesia has
committed to collaborative action on food security. Displaying the
ability and willingness to budget its own resources, the Government
of Indonesia (GOI) has disbursed $32 million in assistance to
vulnerable populations identified in a 2006 WFP assessment.
Indonesia also has the capacity - although still deficient - in
agricultural sciences (including fisheries) to generate a high
return on assistance. It displayed this capacity by increasing rice
production more than three million tons between 2007 and 2008,
thereby achieving self-sufficiency in rice. Indonesia is also
beginning to address the need for substantial new investment in
agricultural infrastructure. U.S. assistance can catalyze and
leverage Indonesia's commitment and investments.

8. High Poverty-Reduction Impact: As many as 150 million
Indonesians are the potential beneficiaries of improvements in food
security. Agriculture (including forestry and fisheries) accounts
for over 41 percent of national employment. The agricultural
sector, which had a 4.8 percent growth rate in 2008, can provide
significant opportunities for contributing to improved food
security, poverty reduction, and strong economic growth. Official
data indicate that women account for 40 percent of the agricultural
workforce, but the actual number is probably higher. Improvements
in agriculture would clearly benefit tens of millions of rural women
and their families.

Success and Geopolitical Value
------------------------------

9. The Indonesian leadership's recognition of the food security
challenge and commitment to multilateral cooperation,
self-identified priorities, base capacity, and agricultural
potential - all this makes Indonesia a more likely candidate than
many countries to turn food security assistance into sustainable,
country-led programs. A number of multilateral organizations
already have well-established programs in Indonesia and are
consciously working to further improve strategic coordination with
the Government of Indonesia (GOI) and other donors. Our assistance
would complement their efforts and strengthen Indonesia's own
capacity to deal with food security throughout the archipelago.
(From 2002 to 2009, the U.S. contribution to Indonesia through the
WFP exceeded $23 million, mostly for emergency feeding programs.)

10. Success would provide an example for other developing countries
and further strengthen the long-term stability of Southeast Asia.
Helping Indonesia - a member of the newly empowered G-20 - would
also provide an important new area for U.S.-Indonesia collaboration
which we could translate into collaboration on other global issues
ranging from nuclear proliferation and climate change to fuel
subsidies and democracy in Burma. An investment in Indonesia's food
security would leverage a much higher potential return than in other
developing countries which are not members of the G-20, or which are
less inclined to cooperate with the United States on these pressing
global issues.

11. President Obama could announce a decision to include Indonesia
as a priority focus country for food security assistance during his
planned bilateral meeting with President Yudhoyono on the margins of
APEC in Singapore this November.

HUME

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