John Mcbeth, Jakarta – Already feeble at the start of 1998, Indonesia's ability to feed its 200 million people has weakened further in recent months. The triple whammy of a severe drought, an economic slump and political turmoil have exposed fundamental flaws in the country's strategy for agriculture. The net result: 1.5 million Indonesian families face acute food shortages and malnutrition (although not famine), says an April report published jointly by the World Food Programme and the Food and Agriculture Organization.

This is a far cry from 1984, when then President Suharto was awarded the FAO World Food Prize for pulling his country towards rice self-sufficiency. Over the past decade, however, Indonesian agriculture has been in steady decline. At the root of the problem, claim critics, is a government policy that ignored farming in favor of export-oriented manufacturing, big-ticket infrastructure projects and costly hi-tech experiments.

"We have ignored our own strength," says Bungaran Saragih, director of the Centre for Development Studies at Bogor Agriculture University.

That is changing fast. Even before the May drama that ended Suharto's 32-year rule, it had dawned on senior government officials – including B.J. Habibie, who has now succeeded Suharto as president – that agriculture could help rejuvenate Indonesia's limp economy. Indeed, some argue agriculture could well become the only genuine growth industry in the three years that Indonesia is likely to take to get back on its feet, reports the latest edition of the Far Eastern Economic Review published Thursday.

"Agriculture should be the backbone for future growth," Ginandjar Kartasasmita, the coordinating minister for economy, finance and industry, told the Review recently. "We have to draw up a new strategy, particularly in horticulture. In the past we paid too much attention to manufacturing."

That attention will come none too soon. After growing 4.7% in 1997, the economy is now in dire trouble. Credit Lyonnais Securities Asia forecasts a vicious contraction of as much as 9% this year, with further shrinkage in 1999. Domestic demand, too, is headed downwards – to a 13.5% contraction in 1998, compared with 4.4% growth in 1997 – Credit Lyonnais Securities Asia predicts.

Focusing on agricultural development has several advantages. First, it will create jobs – a particularly beneficial side-effect, as up to half of Indonesia's 88 million workers are expected to be either jobless or underemployed by the end of 1998. It's also not as capital-intensive as some manufacturing industries, and it doesn't depend as much on foreign capital, currently in very short supply. A healthier farm sector could also help reduce Indonesia's import bill, now swelling with food purchases. Food imports have been rising for some time. In 1996, the most recent year for which hard numbers are available, they made up 8% of total imports, up from 6% more than a decade earlier. Purchases are estimated to have continued growing in 1997 and are forecast to do so again this year. Indonesia is already a major rice importer, and buys as much as a quarter of the world's traded rice. Dependence on expensive corn imports, meanwhile, has led to an 80% contraction in the chicken industry, which uses corn for feed. And purchases of soybean have quadrupled the price of tempe and tofu – two staples that have been transformed from "poor man's beef" to rich man's delicacies.

Increasing rice output will be hard. Agriculture Ministry officials expect this year to produce only 45 million metric tons of paddy – well below the initial target of 53 million tons, and probably the smallest harvest since the mid-1980s. Other experts believe the real figure will be closer to 40 million to 42 million tons. Once milled, paddy produces only about two-thirds of its weight in grain.

Suharto's growing impatience with the government's failure to boost rice production, and his concern over the decline in agricultural land, led to his approval three years ago of a $2 billion to $3 billion rice-development plan in the swamplands of Central Kalimantan. So far, only 10% of a targeted 400,000 hectares is in production, and there are doubts about the technical viability of the project, which isn't due for completion until he year 2007.

Corn is another headache. When the price of imported feed soared in mid-January, many small and medium-sized poultry farmers went out of business. Officials expect the chicken industry to recover to 50% of pre-crisis levels by mid-year, but that still leaves agricultural planners pondering long-term solutions. Indonesia currently grows about 6 million tons of corn annually - well short of its potential – compared with a consumption rate of 7.5 million tons.

Clearly, the old strategies that brought about rice self-sufficiency lost their relevance as farmers wanted to diversify into other crops, says an independent Western agricultural economist. What is needed now, he contends, is a complete retooling of agriculture. That's a view shared by almost everyone. "Indonesia's agriculture has tremendous scope for increasing productivity and expanding output, but that potential can only be achieved under agricultural institutions and policies different from the ones prevailing today," says Jorge Garcia-Garcia, a specialist on agriculture with the World Bank.