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creation of hybrid seeds by limiting foreign investment in seeddevelopment and breeding
enterprises to 30 percent.
Farmers also need better, easier access to the market, especially for highly perishable
commodities like tomatoes. We were saddened by recent TV footage showing a number of
farmers in South Sumatra dumping and destroying their ripe tomatoes on a highway to express
their frustration and anger as the market offered only Rp 200 (1.3 US cents) per kilogram for
their produce.

The contrast between occasional food surplus on farms and food shortages in retail stores in
urban centers or the wide disparity between the prices of produce at farm gate markets during
the COVID-19 lockdowns highlight the high transaction costs and information asymmetries that
have long plagued the country’s food system.

In many countries, such as India, digital platforms can resolve the information asymmetry and
help de-concentrate and increase the number of markets up and down the food system, leading
to better outcomes at either end of the supply chain.

In the wake of the pandemic, governments and private operators have fast-tracked the move to
digital platforms to connect producers and consumers stymied by physical lockdowns. The
government has made the right decision to allocate larger budget appropriations for villages for
financing rural-infrastructure development.

Unfortunately, the massive fund injection through the village fund program has unnecessarily
led to the establishment of a new organization, the village enterprise unit, at the expense of
cooperatives, which throughout the nation’s history have been designed as the grassroots
economic organizations to nurture economic democracy.

So, all in all, in addition to fiscal assistance, the government needs to empower farmers through
broader agricultural extension services and help to set up digital platforms to keep them posted
on market trends and consumer preferences. The government should also liberalize investment
in seed-development and breeding enterprises to improve farm productivity.

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