SUMMARY

1.

This Sectoral Report (K): Agro-economy is organized in the way supplements another Sectoral Report (J): Agriculture. Therefore, for the readers of this report it is recommended to refer to Sectoral Report (J): Agriculture, in parallel to this report.

2.

The agriculture sector is the largest economic sector in the province and the sector contributes about 38 % of the provincial GRDP in 2001. Within the sector, the food crops sub-sector accounts for about 41 % of the sector GRDP. South Sulawesi plays an important role in supplying rice to provinces with rice deficits. The economic importance of the agriculture sector in the project districts is more striking. The agriculture sector of the project districts accounts for 54 % of GRDP and the food crops sub-sector is a leading sub-sector. The agricultural land use of the Objective Area can be classified into paddy field and non-paddy field. The non-paddy field is sub-classified into home yard garden, upland field and estate crops field. Paddy field occupies the largest share of 43% of total farmland followed by upland field. The average holding sizes of irrigated paddy field per farm household by district are: Enrekang 0.19 ha, Sidrap 1.11 ha, Wajo 0.38 ha, Soppeng 0.57 ha, Bone 0.32 ha, Maros 0.47 ha.

3.

The major constraints for agro-economic development in the Study Area are: Agri-business development appears to be a key word selected as a direction or strategy for agriculture development. However, no concrete practical approaches for agri-business development have been developed yet, and Marketing issues such as: 1) products prices (low, instability and seasonal fluctuations), 2) products quality, 3) market information system, 4) limited farmers awareness in the issues, 5) partnership arrangement between farmer groups and private sectors (kemitraan) still very limited and 7) lack of marketing & processing facilities, and Financial capability of farmers (limitation in farming capitals and farm inputs prices).

4.

Some embryos of agri-business oriented agricultural development activities envisaged in the provincial and district agricultural development directions have already been formed, (for example: export quality rice production under a partnership arrangement/kemitraan). In addition, approaches of foreign investors for large scale production of maize are reported by district agricultural agencies. This means the possibility of expansion of palawija production in the Study Area, especially in irrigated paddy fields in dry season. Further, some private firms have become involved in agricultural support services activities under the partnership arrangement.

5.

A number of constraints for agriculture development in the Study Area are identified. The present agriculture development plan should also be studied to address to such constraints and the plan should cover the fields of institutional issues, socio-economic issues and agricultural support services. As a development component of the integrated development of the WalCen River Basin, such an approach should better be employed in the context of the regional agriculture development in addition to the irrigation agriculture development. In the present Study, these issues will be formulated as the Regional Agriculture Promotion Programs,

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6.

Proposed development approaches to major development constraints are: Major Development Constraints/Requirement Water resources/Irrigation issues Other technical issues Socio-economic constraints Institutional constraints Constraints in agricultural support services Major Development Approaches - Irrigation development & rehabilitation - Irrigation agriculture development - Strengthening of extension services - Farmer organizations empowerment - Partnership promotion - Marketing & marketing facilities improvement - Partnership promotion - Agri-business & agro-industry promotion - Institutional strengthening - Farmer organizations empowerment - Strengthening of extension services - Strengthening of seed production & supply - Partnership promotion for inputs supply/credit - Farmer organizations empowerment -Land Conservation Areas Agriculture Development

Land Conservation Development

Areas

Agriculture

7.

The conceived agricultural development plans corresponding to the proposed development approaches are: Development Approaches Irrigation Development Plan Regional Agriculture Promotion Programs (RAPP) Conceived Development Plan - Irrigation Agriculture Development Plan - Agr. Support Services Strengthening Package Program - Institutional Strengthening Package Program - Marketing Improvement Package Program - Agri-business Promotion Package Program - Agro-industry Promotion Package Program - Land Conservation Areas Agr. Development Plan

Land Conservation Development 8.

Areas

Agr.

Under RAPP, The conceived development package programs of (1) Agricultural Support Services Strengthening Package Program, (2) Institutional Strengthening Package Program, (3) Marketing Improvement Package Program, (4) Agri-business Promotion Package Program and (5) Agro-industry Promotion Package Program are formulated. For agro-economic development component, (3) to (5) are discussed in this report. The overall program costs for RAPP are estimated at Rp. million 70,168. The overall program cost for the individual RAPP programs are estimated as shown in the following table. Overall RAPP Action Plans Program 1. ASSPP (Agr. Support Services Package Program) 2. ISPP (Institutional Strengthening Package Program) 3. MIPP (Marketing Improvement Package Program) 4. ABPP (Agri-business Promotion Package Program) 5. AGPP (Agro-industry Promotion Package Program) Overall RAPP Estimated Costs Rp. million Proportion (%) 24.302 34 22,903 33 6,150 9 10,615 15 6,198 9 70,168 100

9.

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