On Friday afternoon, October 12, 2018, the Faculty of Economics and Business (FEB), Universitas Airlangga (Unair), held a public discussion entitled “Overview of Production Structure and Upstream Industry in the Agricultural Sector” at the Menara Hall, FEB Unair, Jl. Airlangga No. 4-6, Surabaya. The discussion also reviewed two books by the speakers, namely Dr. Gutomo Priatmono, Researcher at PSPK-UGM and author of the book “Tumbal: Failed Agricultural Development in the Republic of Indonesia in the 1960s-2000s”, and Muhammad Ihwan, SP, M.Si, Public Relations Manager of Petrokimia Gresik and the author team of the book “Real Steps to Become a Solution for Agroindustry: Petrokimia Gresik’s 46-Year Journey in Building the Agricultural Sector”.

Akhmad Jayadi, SE, M.Ec.Dev., a lecturer at FEB Unair as the moderator opened the discussion with the facts of the urgency of the agricultural sector for the Indonesian economy. According to him, the role of agriculture is at least described in three things: the third contributor (14%) to the national GDP; absorbing 44% of the workforce; and producing staple foods for the population. The agricultural sector in Indonesia, according to Jayadi, faces many challenges, ranging from declining production, reduced cultivated land, and increasing consumption due to the high population.
Problems in the agricultural sector can be broken down into four levels in the agricultural system, namely: the upstream industrial subsector, namely the provider of agricultural production facilities; then the farming subsector (on farm), namely economic activities to produce food products, horticulture, etc.; then the downstream industrial subsector, namely processing, packaging, and trade; and finally from the supporting subsectors such as finance, transportation, research and development, warehousing, etc.
Dr. Gutomo explained that agricultural productivity has stagnated. Farmers only have a surplus of Rp 450,000-600,000 per harvest (approximately 3 months), while their expenses reach Rp 1.5-1.7 million per month for necessities, including buying rice. The question is, why do farmers still buy rice? It turns out that after the green revolution, farmers' grain did not last long, so farmers did not store the grain, so farmers suffered a loss of Rp 4,000-6,000 per kg, depending on the quality of the rice purchased. As a result, the surplus is still imaginary. The only one enjoying the surplus is Bulog, which functions to secure national politics through price ceilings and floor policies.
Another finding is the dualism of production models and ideology, where since 1965 the program to increase productivity towards food self-sufficiency has been implemented in two ways, namely: 1) agricultural modernization through the green revolution (superstructure), with agricultural development as its structure; 2) agricultural institutions such as farmer groups, KUDs and irrigation as infrastructure that also aims to increase productivity. Expanding farming businesses in the first way is a method of capitalism mode of production, while the second way, in the form of cooperatives, represents the socialist mode of production.
The second presenter, Muhammad Ihwan, discussed all things fertilizer, specifically the production of PT Petrokimia Gresik. Ihwan proposed a holistic view of the agricultural system, namely the inseparability between upstream and downstream subsectors. Petrokimia provides almost all upstream inputs such as fertilizer, seeds, soil conditioners, pest control, and decomposers. The contribution of petrochemicals to the agricultural sector is support in every agricultural cycle: fertilizer provision, productivity improvement, demonstration plots/education/socialization, agricultural innovation activities, and farmer regeneration.
One of the problems with subsidized fertilizer is scarcity. According to Ihwan, this is not due to a lack of Petrokimia's production capacity, but rather because the government allocation (9.55 million tons) is given less than the regional proposal (13.18 million tons). Among all types of subsidized fertilizers, Urea has the largest allocation, namely 4.1 million tons (43%). Among the 5 types of subsidized fertilizers, only ZA, SP-36, and NPK Phonska are distributed throughout Indonesia. Meanwhile, urea is only used in 10 districts in East Java, and Petroganik in only 8 provinces. Ihwan provided data showing that the uptake of Phonska and Petroganik fertilizers has been shown to be in line with (and increasing in) rice and corn productivity.

The discussion received an enthusiastic response from the participants, as evidenced by the emergence of 10 questions from various perspectives. For example, Ms. Atina, Ms. Muryani, Ms. Fitriyah, and Mr. Wahyu are lecturers at Universitas Airlangga . Then Mr. Yoyok, Mr. Danang, and Mr. Yudi from the Association of Agricultural Graduates or Professionals. Ms. Silvana and Mr. Jakfar represented doctoral students, and Rizal represented undergraduate students. The audience's questions targeted agricultural policies from the Sukarno era, Suharto, to Jokowi. Another question was about the role of petrochemicals in producing young farmers who are increasingly rare in Indonesia through the National Jamboree activities.
The event was considered a success by the participants. For example, Mr. Abdus Salim hoped that further discussions would be held at FEB Unair, for example on downstream industries in the agricultural sector, as well as the role of supporting industries, such as financial institutions, IT, R&D, and universities in supporting the agricultural sector, for example through financial technology and application platforms. (AJ-AS)