Agricultural Land Conversion and Food Policy in Indonesia: Historical Linkages, Current Challenges, and Future Directions

Abstract

The problem of agricultural land conversion (ALC) is inseparable to the food security issue in Indonesia. The government has set ALC as the primary threat to the existence of food security. The monoculture food policy in Indonesia has developed an unbalanced food system which relies heavily on rice and shaped the rice-eating habit among Indonesians. The government has formed an act about sustainable agricultural land (LP2B) to protect productive agricultural land and to mitigate the risk of decreasing rice production. The government also encourages the diversification of food to lessen the dependence on rice. However, it is difficult to implement both policies. The formation of LP2B will promote the conflict of interests between stakeholders involved (farmers, real estate developer, and commercial business). On the other hand, food diversification will not be sufficient unless followed by massive effort to stimulate the establishment of supporting institutions (the market for the agricultural product, processing industries, and the market for the consumer). Thus, it is required to limit the rate of ALC with a different and innovative approach. In this chapter, we explain how increasing agricultural land rent encourages farmers to retain farmland. Furthermore, we also identify what significant factors that affect the rent of agricultural land.