Human Capital in Agribusiness and Agriculture - Eny Lestari Widarni - E-Book

Human Capital in Agribusiness and Agriculture E-Book

Eny Lestari Widarni

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This book is representative of a fraction of what we have learned over the years in various countries around the world. We study various things related to human resource development in various countries to understand the problems, solutions, and forms of perfect education for our students.  We also study issues related to food because food has an important relationship with health, namely adequate nutrition and human energy sources. Health and including food are important factors in building human capital. We found many food problems in various countries including developed countries. A very popular issue related to labor.   This book presents a small part of our study in 22 countries on 5 continents in this book we focus on looking globally to see comparisons between countries by vectoring human variables and the performance of the agricultural industry for each country. We conduct qualitative studies to understand the problems in each country we visit and study so that we can provide solutions or suggestions that might be a solution for the country where we live and study. Sometimes the solution is a collaboration between countries. Because we find that every country, whether developed or developing country, has strengths and weaknesses and has the potential for beneficial collaboration. To understand globally and comprehensively or in aggregate, we use quantitative studies with official data from the world bank. Both qualitative and quantitative have their own strengths and weaknesses because they have different points of view.

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Eny Lestari Widarni, Benjamin Drean

Human Capital in Agribusiness and Agriculture

Human Capital Studies in Agribusiness and Agriculture in Asia, Europe, Australia, Africa and America

BookRix GmbH & Co. KG80331 Munich

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Note: This eBook is a guide and serves as a first guide. In addition, please get expert advice

Credit

 

Dr Eny Lestari Widarni

Benjamin Drean

 

 

 

Human Resources in Agribusiness and Agriculture

<h2>Human Capital Studies in Agribusiness and Agriculture in Asia, Europe, Australia,Africa and America

 

 

 

 

 

 

 

 

Dr Eni Lestari Widarni is a practitioner and academic in human resource management. Dr Eni Lestari Widarni is the leader of the university of economics in Indonesia, namely the Jaya Negara Tamansiswa Malang School of Economics.

 

Benjamin Drean is an entrepreneur, traveller and learner in the field of Agriculture, especially Agri-Business with the affiliation of Lycée George Sand, EPL du Velay, France. He is the owner of agriculture e-commerce in France with selling several agricultural products from Asia. Business: www.pandasian.fr

 

 

 

 

Janega Press

Malang, East Java, Indonesia

Copy Right

 

Human Resources in Agribusiness and Agriculture

Human Capital Studies in Agribusiness and Agriculture in Asia, Europe, Australia, Africa and America

 

© Janega Press

Malang 2021

272 pages, 8.5 inch x 11 inch

ISBN : (On Process)

 

Author :  Eny Lestari Widarni (Indonesia), Benjamin Drean (France)

Editor : Adriana Assyami (German)

Layout : Alex Norish (German)

Cover Design : Alejandro Gonzalo (Spain)

Translator : Lilik Sumarsih (Indonesia), Alejandro Gonzalo (Spain)

Photos and Illustrations :

Alejandra García-Ochoa Mora (Canary Islands,Spain), Andrea Piacquadio (Budapest, Hungary), Benjamin Drean (France), Bhargava Marripati (Telangana, India), Burak AYDIN (Antalya, Turkey), Carol Davis (Colorado, USA), Chris Rodriguez (Valle del Cauca, Colombia), Daggy J Ali (Addis Ababa, Ethiopia), David McEachan (Edinburgh, Scotland), Elena Blessing (Hamburg, Germany), Erik Allen  (Baltimore, United States of America), Errin Casano (Vancouver, Canada), Ethan Brooke (Seoul, South Korea), Frank Merino (Colombia), Frans Van Heerden (South Africa), Indra Gunawan (Malaysia), James Wheeler (Vancouver, BC, Canada), Jan Venter (South Africa), Karolina Grabowska (Poland), Lilik Sumarsih (Bandung, Indonesia), Magda Ehlers (South Africa), Matthis Volquardsen (Husum, Germany), Mudassir Ali (Sydney NSW, Australia), Nishant Aneja (Chandigarh,India), Q. Hưng Phạm (Vietnam), Romario Rodrigo (Ecuador), Shvets Anna (Russia), Suryaning Bawono (Indonesia), Suzy Hazelwood (Norfolk, United Kingdom), Taryn Elliott (Cape Town, South Africa), Tom Swinnen (Limburg, Belgium), Yovan Verma (India)

 

Published on 27 July 2021

In Malang

 

By

Janega Press

Jl. R. Tumenggung Suryo No.17, Bunulrejo, District. Blimbing, Malang City, East Java 65123

Indonesia

Website : stiekn.ac.id

Email : [email protected]

 

Printed by

PT.Frost Yunior (Indonesia)

 

Distributed by Triple Nine Communication (Singapore).

 

Note : It is prohibited to quote or reproduce part or all of the contents of this book in any way, without the written permission of the publisher. This book is distributed to 100 countries on 5 continents (ASIA, EUROPE, AMERICA, AFRICA, AUSTRALIA) with various publishers and partner distributors. You may find and purchase this book with the triple nine communications partner publisher in your country. You may also find this book published with a different ISBN from the official publications in Singapore because partner publishers publish with different versions and with different ISBNs.

Foreword

 

This book is representative of a fraction of what we have learned over the years in various countries around the world. We study various things related to human resource development in various countries to understand the problems, solutions, and forms of perfect education for our students.  We also study issues related to food because food has an important relationship with health, namely adequate nutrition and human energy sources. Health and including food are important factors in building human capital. We found many food problems in various countries including developed countries. A very popular issue related to labor.

 

This book presents a small part of our study in 22 countries on 5 continents in this book we focus on looking globally to see comparisons between countries by vectoring human variables and the performance of the agricultural industry for each country. We conduct qualitative studies to understand the problems in each country we visit and study so that we can provide solutions or suggestions that might be a solution for the country where we live and study. Sometimes the solution is a collaboration between countries. Because we find that every country, whether developed or developing country, has strengths and weaknesses and has the potential for beneficial collaboration. To understand globally and comprehensively or in aggregate, we use quantitative studies with official data from the world bank. Both qualitative and quantitative have their own strengths and weaknesses because they have different points of view.

 

Best Regards

Dr. Eny Lestari Widarni and Benjamin Drean

Agriculture in Asia

 

Photo of Indonesian farmers' rice fields in Banyuwangi east java, Indonesia, Photo by Benjamin Drean (France)

 

Agricultural technology continues to develop from time to time (Drean & Bawono,2021). Even in a number of countries, development is very fast and has implemented the internet of things to increase productivity in the agricultural sector. The country in Asia that is currently growing rapidly in China. The country which has a population of 1.4 billion people has been able to produce food commodities to meet the needs of its citizens. China is indeed far more innovative in the agricultural sector than other countries. One of China's advantages is the application of appropriate technology. In China, agricultural mechanization is modern. Harvest using a harvester, it's common everywhere in China. China's advantage is appropriate technology that is effectively utilized by farmers.

 

Apart from China, a country in Asia that is quite advanced in agriculture in Thailand. This country has succeeded in developing a variety of fruit seeds that have been worldwide. Thailand is very prominent with the development of seeds. So they develop the seeds very well. They have their own research site for seeds.

 

The agriculture sector in Vietnam. Recently, it has become a topic of discussion. Vietnam is known to stand out in terms of productivity because its farmers are very diligent and diligent. Vietnam, more prominent from the aspect of productivity because Vietnamese farmers are extraordinarily diligent, diligent. Vietnam has learned to grow coffee in Indonesia, now Vietnam's coffee productivity is 100 percent or twice Indonesia's (Tempo,2015).

 

Indonesia also has several superior food commodities in the international arena. One of them is oil palm which currently occupies the top position in terms of productivity in the world (Li et al,2021). In addition, Indonesia's coffee and chocolate production has occupied the third position in the world. Local rice production is also in the third position after China and India. Indonesia's largest palm oil production in the world. Rubber, Indonesia is number two after Thailand. Indonesia's coffee and chocolate production is number three in the world. Indonesia's rice production is number three after China and India. However, in Indonesia, the abundant amount of rice has not been able to meet the needs of the Indonesian population which has reached 270 million people. The problem is that Indonesia's population is 270 million people so that the goods produced are not enough for the Indonesian people themselves. Thus, opening a large new planting area outside Java Island must be done. Otherwise, it won't be enough.

 

In 2020, Indonesia initiates to build synergies and collaborations between countries and between businesses in the Asian region to build agricultural independence and food security. Because the role and position of Asia in global agricultural production is very large. So that collaboration, in addition to building the food security of Asian countries as well as ensuring the availability of world food. One of the major challenges of agriculture today is the issue of land availability. On a macro level, the agricultural sector is the largest contributor to GDP in Asia and is a strategic part of meeting Asia's food needs. However, along with industrial development and climate change, agricultural land in the Asian region continues to shrink. Agricultural land shrank by 44 percent. This condition threatens Asian food production. 822 million people on earth are still in food insecure conditions. Of these, 517 million people (62.89 percent) are in the Asia and Pacific region. In Indonesia, the shrinkage of agricultural land occurs significantly every year. almost 120 thousand hectares of land change function every year in Indonesia.(ADB,2019).

 

In Indonesia, apart from land shrinkage, there are five other agricultural problems. The first is the land ownership of farmers which is only 0.2 hectares on average and the condition of the land is already damaged. The second, the capital aspect. Third, the weak management of farmers. Fourth, the lack of mastery of technology and innovation. And, fifth is post-harvest handling. The general habit of farmers in Indonesia who are often talkative in planting is a problem in itself. They are often lazy to plant crops that are high in price in the market. This is often detrimental to farmers in the long run. This is also related to the weakness in managing supply and demand for commodity prices so that at certain times the prices that are being harvested always fall due to excess supply.

 

Many farmers in rural areas in Asian countries depend on selling the agricultural products they produce to support their families. However, these traditional agricultural lands are now being taken over by large agricultural businesses, for example, oil palm plantations in Indonesia, Malaysia, and Thailand. In many parts of Asia, especially developing countries in Asia, they face the problem of barren land, limited supply of seeds, and various other factors, which are obstacles to successful agriculture. As a consequence, it is the cause of poverty for many farmers in developing countries. Advances in agricultural technology can improve land conditions, simplify the cultivation process and increase crop yields, but, as it turns out, technology does not always bring immediate luck to farmers. Agricultural developments can increase yields but sometimes come at the expense of the so-called balance of life. The poor farmers are mostly just trying to support their families and save a little. They are not able to use new technology, and it is these people who usually lose land, then move to cities and become laborers. This condition does not only occur in Asia but also in various countries in the world, including Europe, especially during the first industrial revolution. In parts of Asia, road infrastructure problems hinder farmers' ability to sell their crops, whereas transportation is a key component of agricultural development. So, even though the harvest is abundant, farmers cannot sell their crops and reap profits. However, as it turned out, there was another problem. What is common in the Southeast Asia region, while the commercialization of agriculture is widespread, is that land expropriation is frequent, so that many people lose their land to agricultural businesses. This creates a problem.

 

<h2>Covid 19 Pandemic and Agriculture in Asia

 

The Covid-19 pandemic affects human life in all sectors, including agriculture, including the sectors affected by this pandemic. Not only in Indonesia, but other countries in Asia are also experiencing the same thing. This pandemic emerged starting from Wuhan, China, where a virus thought to be from an animal attacked humans. Then this virus spread all over the world. From the beginning of a health crisis, the spread of this virus has become an economic crisis and could become a security crisis.

 

Malaysia itself to implement Lockdown to prevent the spread of the virus more widely. As of July 10, 2020, the total number of cases was 8,696, 8,511 recovered and 121 died. Meanwhile, Indonesia did not dare to implement a lockdown because the impact of the lockdown on the economy was very large. As of July 9, 2020, there were 68,079 cases, 31,585 recovered and 3,359 died. Although the impact of the pandemic on health is enormous, given the very fast spread of the virus, Indonesia still does not dare to adopt a lockdown, instead of implementing large-scale social restrictions in several areas. This step is considered to be able to help reduce the spread of the virus very quickly. Meanwhile in Laos, as of August 3, 2020, there were 20 cases and 19 recovered. As a small country in the middle of other countries such as Thailand and Vietnam. While Thailand, as of August 3, 2020, there were 3,317 cases, 3,142 recovered and 58 died. The country known as the White Elephant was very hard hit by the pandemic because the country relies a lot on its source of income from tourism, where during this pandemic the number of tourists has greatly decreased. And another impact that is felt is the decline in product exports. Another Asian countries affected by this pandemic are the Philippines, as of August 3, 2020, there were 85,486 cases, 26,996 recovered and 1,962 died. Although this country has implemented a previous lockdown, it turns out that the number of cases is still increasing a lot (OECD,2020).  To cope with the economic impact of the pandemic, Malaysia and Indonesia issued economic stimulation. As in Malaysia, economic stimulation in the form of tax relief is a key strategy in improving the post-pandemic economy. In this program there are efforts to empower the people, increase business and stimulate the economy. Meanwhile, Indonesia issued two stimuli, the first of which focused on the economic sector that could drive business, especially tourism and accommodation. The second stimulus focuses on fiscal and non-fiscal programs to support efforts to export and import products that can help overcome Covid-19. Many countries in Southeast Asia depend on agriculture for their economy, because with tropical climate conditions, agriculture has great potential. The emergence of this pandemic has disrupted agriculture in Southeast Asia.

 

As a sector that is part of the economic development of Southeast Asia, agriculture has an important position, when something causes this sector to be unhealthy, the impact will be felt by many people. Agriculture Post the Covid-19 pandemic shows that there are several obstacles that occur. In Malaysia, the impact of the pandemic on agriculture is a decrease in the number of workers, supply chain damage, difficulties in selling agricultural products, export bans, and restaurant closures. Meanwhile in Indonesia, the pandemic has had more of an impact on increasing input prices, disrupting supply chains, and decreasing demand for certain agricultural products, especially tertiary products. Meanwhile, in the Philippines, agriculture is affected by the supply chain from farmers to consumers, plus the lockdown. The conditions in Laos are not much different, where the impact of this pandemic is in the form of reduced demand for farmers' products, limited distribution, and increased prices of rice and meat. For Thailand, the most felt impact on the agricultural sector is the reduction in exports of agricultural products, even though exports are an important part of agricultural development in this country.

 

There are several strategies or efforts that have been implemented to help the agricultural sector affected by the pandemic, of course, each country is different. The system of government affects the type of program or effort created. In Indonesia, the Ministry of Agriculture has made several programs, namely the provision of staple food, mainly rice and corn for the entire population, acceleration of exports of strategic commodities (swallow's nest, palm oil, coffee, cocoa, pepper, nutmeg, ginger, and others) to support economic sustainability. , socialization of officers to prevent the development of the coronavirus, creation or development of farmer's markets in each province, optimization of local food, coordination of logistics infrastructure, utilization of e-marketing, as well as labor-intensive programs so that agricultural development targets are achieved and the community directly receives cash funds. Meanwhile, in Malaysia, programs to save agriculture include the establishment of a food security committee, providing assistance on economic stimulus packages, updating automation and digitization-based systems, developing the future of agri-entrepreneurs for young people, increasing e-commerce in agricultural and food products, and increasing partnership with the private sector. The impact of the Covid-19 pandemic is felt by all sectors, including agriculture. The majority of countries in Southeast Asia still rely on the agricultural sector as one of the contributors to the country's economy. The negative impact felt by the agricultural sector in several countries in Southeast Asia is relatively the same, namely disruption of supply chains and rising input prices. These two impacts can be fatal if there is no policy to overcome them. Each country has its own uniqueness, so the treatment of the agricultural sector is different. Focus on emergency and long-term strategies need to be done so that the impact of this pandemic can be handled optimally (Roy et al,2021).

Agriculture in Europe

 

Sunflower gardens in Spain, Europe, Photo by Alejandra García-Ochoa Mora (Canary Islands, Spain)

 

The agricultural sector budget including subsidies is the largest in the European Union's financial plan. But the economic requirements in different countries differ greatly. The European Union is very concerned about the plight of its farmers, who are the biggest beneficiaries of the Common Agricultural Policy (CAP). Basically, this policy regulates direct subsidies for farmers' income. However, CAP is not free from criticism and controversy. The bombastic budget is considered less effective for equitable distribution of farmers' welfare and protecting the environment (Kiryluk-Dryjska & Baer-Nawrocka,2019). The impact of CAP on the agricultural industry in developing countries has also been questioned. Food shortages became one of the toughest trials facing Europe after its economy was devastated by World War II. Strategic cooperation in agriculture began to be planned along with the formation of the European Economic Community or the forerunner of the European Union through the Rome Agreement in 1957. At this historical moment, the six founding countries of the European Economic Community, namely West Germany, France, Italy, the Netherlands, Belgium, and Luxembourg, designing a single market system or Common Market to free the movement of capital, goods, and services, as well as labor in the European Economic Community. The Joint Agricultural Policy or CAP was officially launched in 1962. Its main goal is to meet the food needs of European people while creating a better standard of living for its farmers (Jones et al,2012).

 

Initially, CAP focused on government intervention in controlling food commodity prices, namely by guaranteeing high standard prices (above world market prices) for European agricultural products. If farmers fail to sell their products in the market, the government will buy their commodities and store them in warehouses or export them. At the same time, farmers are supported by sizable export subsidies, given that the commodity is highly-priced within Europe but sold cheaper on the international market. As a result, farmers are encouraged to produce more agricultural products and processed livestock.

 

in 1986, a surplus of agricultural commodities in Europe was inevitable. There is a total of millions of tons of excess butter, milk, beef, wheat, up to 300 million gallons of unfit for consumption fermented alcohol, which was once popularly known as the “lake of wine”. Behind the chaos in the implementation of the CAP at that time, the excessively high budget was also in the spotlight. In 1985, for example, the allocation of funds for CAP reached 74 percent. of the total budget of the European Union, which at that time still consisted of 10 countries. Since then the CAP budget has been tightened and a number of reform measures have been taken (Norton et al,2014). Since 1992, the price protection system has been slowly abandoned. In exchange, farmers are compensated in the form of direct payments. Then, in 2003, the CAP was designed to be more market-oriented: the payment system based on the volume of farm produce began to be shifted to subsidies per area of agricultural land. The obedience of farmers to protect nature and the welfare of their livestock is also a prerequisite for receiving direct assistance.

 

Along with the accompanying reshuffle, CAP has become more mature. There are at least three important substances in modern CAP, namely direct payments, market regulations and village development programs. Direct payments to farmers are the main feature as well as the biggest component in the CAP. According to the European Commission, farmers need to be supported by the government because their incomes are below the average salary for workers in the European Union. Reflected from the data for 2007-2016, the income of European farmers is less than 40 percent of the total average income of workers from other industrial sectors. In 2017, the European Parliament's Research Service reported that smallholders are the socio-economic group in rural or suburban areas most vulnerable to falling into poverty, alongside ethnic Roma and women. It is undeniable that the farming tradition is full of risks. Farmers need large amounts of capital, such as tractors or agricultural machinery, irrigation systems, fertilizers and pesticides or other high-cost eco-friendly schemes (Augère-Granier, 2017).

 

The agricultural sector is also vulnerable to losses due to pest attacks and dependence on seasons and weather. Farmers are still confused by trade liberalization and the uncertainty of market commodity prices due to fluctuating supply and demand. Compensation in the form of direct payments is considered to be able to guarantee the welfare of farmers, as policy makers in Brussels have formulated it in the CAP so far. Each member of the European Union has the authority and flexibility to regulate how the CAP is distributed, the amount of compensation and the requirements for the area of​agricultural land. Direct payments cannot be disbursed if the amount is below 100 to 500 euros or if the area of agricultural land is less than 0.3 to 5 hectares. Only active farmers who have productive land are allowed to apply for subsidies every year. As reported by the European Commission publications, farmers can access direct payments through mandatory schemes (basic payments per hectare, incentives for environmentally friendly agriculture, allowances for young farmers) plus options (eg subsidies based on the amount of production produced). Or, for farmers whose land is not too large, they can follow the Smallholder Scheme. The amount of direct assistance for this scheme is determined by each country, but the amount does not exceed 1,250 euros (European Parliament,2015). During 2014-2020, around 408 billion euros were allocated to 28 member countries, including the United Kingdom. This means that the CAP budget almost reaches 38 percent of the total EU spending. The share for CAP is also the largest, even above socio-economic programs. At least 71 percent of the CAP budget is allocated to farmer subsidies. How is the realization of CAP spending in one year? Throughout 2018, 41 billion euros were disbursed as direct payments (France was the largest recipient of the quota, followed by Spain, Germany and Italy). Then, 2.7 billion euros was used to finance market regulations, such as government intervention in stabilizing commodity prices. Meanwhile, the village development agenda received 14.3 billion euros.

 

The European Commission noted some progress with regard to the implementation of CAP programs between 2016-2017. For example, in rural areas, the poverty rate fell from 26 percent to 24 percent, while the percentage of the labor force rose from 66 percent to 68 percent. The area of organic agricultural land is also reported to be increasing, from the initial 11.9 million hectares or 6.7 percent of the total agricultural land area to 12.6 million hectares. Agricultural areas that support biodiversity have also increased from 11.1 million hectares to 11.4 million hectares. Ammonia gas emissions from agricultural activities were also successfully curbed, from 3.6 million tons in 2015 to 3.61 million tons the following year. However, activists and academics seem disappointed with the impact of CAP's performance on environmental sustainability and farmers' welfare. In 2019, the agro-ecological advocacy agency SlowFood. and a number of environmental organizations are asking the European Parliament to change their agricultural systems to be more sustainable. Similar requests were made by a group of animal conservation organizations, including the European Ornithologists Union and Butterfly Conservation Europe. This organization cites a study that states that the bird population decreased by more than 55 percent on agricultural land in mainland Europe between 1980 and 2015. At least 3,600 scientists support the recommendations made in the scientific study “Action needed for the EU Common Agricultural Policy to address sustainability. challenges" (2020). One of these studies recommends compensation for assistance to be adjusted to the performance of farmers in practicing environmentally friendly agriculture, transfers based on land ownership per hectare or production quantity. The payment system per land area ownership is indeed problematic. Apart from being criticized, it does not inspire the love movement. According to data from the European Commission in 2015, it was found that 80 percent of the direct subsidies were received by 20 percent of farmers who own 100-500 hectares of land, while the remaining 20 percent of the funds were given to k 80 percent of small farmers whose land area is mostly under 5 hectares.

 

CAP's direct subsidies in 2015 were more likely to support areas whose agriculture was relatively prosperous. As a result, CAP actually exacerbates the wage gap between rich and poor farmers. The study suggests, among other things, that subsidies for regions whose incomes are above the EU median wage are diverted to a biodiversity strategy, or to develop green agriculture among smallholders who need more support. Behind the various demands for CAP's reforms to be more inclusive and pro-environmental, in essence, CAP remains a protectionist policy system. CAP aims to meet food needs in the European Union while maintaining the prosperity of its farmers, or in other words, reducing dependence on imports. Through the subsidy system, CAP always encourages EU farmers to continue to produce more, the excess of which can always be exported. It also has an impact on the agricultural activities of countries outside the European Union. Free trade agreements have so far encouraged developing countries to open their markets for European surplus production.” Farmers in developing countries who are unable to compete with products supported by the European Union are finally faced with the risk of being excluded by unfair competition.

 

In addition, the European Union is known to like to import soybeans and their processed products for animal feed. Still quoted from the GRET-Coordination SUD report, the intensive livestock model in the European Union has partly contributed to increasing the expansion of soybean farms in South American countries, such as Brazil and Argentina. The allocation of land to meet local food needs in developing countries is also automatically reduced. In short, the changes brought about by the CAP regulation on agricultural activities in the European Union will have an impact on agricultural and food security in other parts of the world. The allocation of CAP funds for the period 2021-2027 reached at least 356 billion euros, smaller than the quota for the previous period. The United Kingdom's exit from the European Union has contributed to the decline in CAP funds because they no longer contribute to the common budget. Despite the fact that CAP's budget tends to decrease over time, the amount is still significant. This means that for the European Union, the agricultural and food sectors are still the mainstays that are worth fighting for. CAP's expensive budget “not only for 10 million farmers” but also “for 450 million people” living across the EU.

 

Five countries in Europe, namely Poland, Romania, Italy, Spain, and France, are countries where two-thirds of the total farmers in all of Europe live (Maican et al,2021). Countries in Eastern Europe are the biggest contributors to the conversion of the peasant profession. Even so, the concentration of farmers in eastern Europe is still the largest in Europe. In Poland and England, farmers' incomes in this decade recorded an increase. Meanwhile, in countries that set the single euro currency, namely Denmark, Italy, Ireland, and the Netherlands, farmers' incomes are decreasing. Most parts of the world, and perhaps also in Europe, of course, will face water problems in the next few decades. Agriculture is one type of activity that is greedy for water. So that environmental sustainability is the main thing that needs to be considered.

 

The environmental scheme seems to be important because it becomes a bonus that must be paid to farmers so that they participate in more environmentally friendly programs. Each state must provide at least 20% of EU direct payments for it. The goal is for the agricultural sector to receive additional funding if they exceed the values set in basic climate and environmental standards. The new rules have been the subject of fierce debate because many Eastern European countries are afraid of losing EU funds if the number of farmers participating in environmentally friendly programs is not sufficient.

 

Large-scale greenhouses in the Netherlands are no longer using chemical pesticides. With the greenhouse method and technological developments, agriculture in the Netherlands is able to increase the productivity of growing vegetables by 28%, reduce energy use by 6%, and reduce chemical fertilizers by 29%. The Netherlands, a country of windmills with an agricultural land area of only 17,960 (sq. km.), but able to export 90.3 (billions of euros) worth of agricultural goods, the second largest after the United States in 2018. European food, where the main products include, horticulture, milk, meat, fruit, and vegetables. Strange indeed, a country with a third of its territory below sea level, with a population density of 1,300 (per square mile), almost no availability of land and other resources for large-scale agriculture, is even able to develop agriculture that is friendly to farmers, and industrially profitable. One of the successes of Dutch agriculture is technology. The Netherlands is able to develop agricultural technology in accordance with the characteristics of the region. Dutch agriculture relies on greenhouse technology and precision agriculture, which enables them to grow with efficient inputs to produce more productive outputs (Goverment of The Netherlands, 2018). The main agricultural areas in the Netherlands are not as conspicuous as agriculture. Dutch farming with a greenhouse model was developed in canals in rural areas where the area is more than 175 hectares. With that, more than half of the land area in the Netherlands is used for agriculture and horticulture.

 

One of the reasons for the Dutch to excel in the food sector is the bitter experience after the 2nd world war. The Netherlands had experienced a famine known as the "Dutch hunger winter", which claimed more than 20 thousand lives, at the end of the German occupation. After that, the Netherlands developed greenhouse technology as an application for agricultural development to meet food needs. Now, Westland is one of the areas in the Netherlands that is the basis of agriculture with 80% using the greenhouse method with high technology. With the development of this model, the Netherlands is able to export vegetables, onions, potatoes, tomatoes, peppers, chilies, and other superior products with a value of up to 6 billion (Euro) per year. Although its natural potential is very limited, it can be said that the Netherlands has become an agrarian country of Europe. One of the lessons from agriculture in the land of tulips is a clear direction of agriculture, namely agriculture for food fulfillment, and the development of technology that is suitable for space, natural conditions to maximize the potential of existing resources, namely greenhouse technology so that it can effectively and efficiently spur productivity.

 

Over the last 60 years, Germany has been able to increase its income from agriculture on a large scale. Agriculture in Germany has a big role in German society. Agriculture in Germany is not only a provider of food, but also protects the environment and European farming culture. Modern technology has greatly increased the harvest volume. In this country synonymous with bread, more than half of Germany's territory is used for agriculture that produces the basic ingredients of bread. Plants and grains are the most important plant products, they are all used to make about 300 types of bread.

 

In 2018, the European Union's (EU) proposal to reduce agricultural subsidies and provide concessions for countries under the Common Agriculture Policy (CAP) drew criticism from France, which called the move an unreasonable move. The emergence of the CAP proposal is part of a new and larger EU budget, to spark competition among member states over how they fill the funding space that was lost after the UK left. The EU Commission said in order to cut costs and promote other policies, aid provided to farmers would shrink to 365 billion euros in 2021-2027. This figure is down 5% from CAP's current budget.

 

France, which is the largest recipient of the CAP budget, said the proposal was unacceptable and stressed that it was only a starting point for negotiations. The French Minister of Agriculture and Food said the drastic, massive and even cuts were "absolutely unreasonable". The pruning poses a risk to the livelihoods of the farmers and has serious implications for their incomes. France could not accept the decline in the income of the farmers. In the proposal, which must be approved by all member states, EU countries must limit subsidies to large-scale agriculture or apply different payments depending on the scale of the farm and the remainder distributed by member states to small and medium-sized farms. The EU Commission proposed a limit of 60,000 euros for large farms. The average farmer in all member countries will not experience a cut in direct payments if this is managed properly. The EU Commission would also like to apply more requirements to these direct payments, with the bulk of the funds devoted to green action and environmental and rural development. The proposal, which was put forward to give more freedom and space to member states, has received strong criticism from farmers' unions because it is seen as an attempt by the EU Commission to return to the old CAP concept. Farmers in all agricultural sectors, from dairy products to grains and sugar, have suffered from sharp declines in income in recent years due to the global supply glut.

Agriculture in America

 

Corn from gardens in Colombia, Photo by Frank Merino (Colombia)

 

Agriculture is one of the important elements for a country. Without the agricultural sector, a country will depend on other countries. By farming, the state can produce raw materials commonly used by many people, such as rice, cotton, vegetables, and so on. American agricultural technology has advanced again since the 19th century when many new machines and technologies were invented. Agriculture there is increasingly developing machines and technologies that are found are also used to increase yields and agricultural quality.

 

Such as the application of biology to grafting plants, so that the fruit yield is better than the parent plant. Land science is useful for managing agricultural land and regulating irrigation systems. So, technological advances make agriculture even more advanced.

 

Most agricultural land in America is planted with corn, hay, and wheat. The main agricultural land is used to produce fiber foods. Today, the United States is one of the largest exporters of agricultural products in the world.

 

Commodities are complete and of very good quality. Starting from vegetables, fruits, chicken pieces, beef, milk, to tobacco and seeds. Agricultural equipment in America is very modern. In America, tractors can function as towing other tools, such as hoeing machines, fertilizing, sowing seeds, cutters, and harvesters.

 

In fact, some tractors can power other machines. The main crops that American farmers produce are wheat, soybeans, rice, cotton, and tobacco. Most of these agricultural products are exported abroad. Advances in agricultural technology there have improved the packaging, processing, transportation, and marketing systems of agricultural products in America.

 

 The progress of agriculture in the United States (US), especially in the field of grain crops such as corn, soybeans, wheat, sorghum, and rice, cannot be separated from consistent government policies and support for farmers. Policies and support are provided and enjoyed directly by farmers with the main objective of keeping agricultural businesses attractive, profitable, and farmers avoiding the risk of loss under any circumstances. With these policies and support agricultural activities in the US can continue to develop and compete in international markets.

 

One of the US policies to promote agriculture is to hold a Farm Bill. Farm Bill is a product of US legislation that is passed by the US Congress every 5 years. This Act allocates a budget to assist farmers and programs in the US agricultural sector, including direct cash assistance to farmers (direct payments), agricultural estate development, and international marketing (Parks et al,2019). Farm Bill which was passed on June 18, 2008, is valid until 2012 and replaces the previous Farm Bill, namely Farm Bill 2002. Farm Bill 2008 or better known as The Food, Conservation, and Energy Act of 2008 includes 15 programs including commodity price and income supports, farm credit, trade, agricultural conservation, research, rural development, energy, and foreign and domestic programs such as food stamps and other nutrition improvement programs.  The second largest budget allocation after the Nutrition program (Title IV) is the Commodities program (Title I). In the 2008 Farm Bill, this program received a budget allocation of $42 billion or about 15% of the total Farm Bill funds.

 

This commodity program generally consists of 3 forms of payments to farmers: (1) annual direct payments whose determination is not correlated with the level of production and prices, (2) counter-cyclical payments that are issued when prices fall below the stated price. previously targeted, and (3) marketing assistance loans that provide interim financing and, if the price of the commodity falls below the price agreed in the loan contract, becomes additional income support. The Commodity Program is a kind of safety net to protect farmers from falling commodity prices at harvest and help increase farmers' income.

 

Price subsidies and income assistance, packaged in Title I (Commodity Program), are given by the government to farmers based on the consideration that the market is unable to balance supply and demand. When the harvest is abundant while demand remains, the price of agricultural commodities becomes very low and this condition is not good for the welfare of farmers and the sustainability of the agricultural production system. Similarly, what happens at the farm level, farmers cannot respond quickly and proportionally in case of price changes, for example by reducing their production if harvest prices fall. The fall in harvest prices due to overproduction will harm farmers because the costs have already been incurred while farmers also have to prepare crops for the next planting season where the price level for the next harvest season is not clear.

 

For this reason, the provision of price and income subsidies is given to stabilize farmers' income levels by transferring some of the above risks from farmers to the government. These risks include short-term volatility in commodity prices and capacity building in the long term. The aim is to maintain the economic competitiveness of the agricultural sector so that it can compete globally in producing food and fiber.

 

These subsidies were originally started in the 1930s when there was a severe economic recession (Great Depression) in the US. The initial aim was to control the level of commodity supply and stock management so that the income level of farmers can be maintained at a profitable level, but later the approach has changed to a kind of direct income support payments.

 

For example, the Target Price (TP) for corn is set in the 2008 Farm Bill at $2.63/bushel, direct payments for corn are $0.28/bushel, and the loan rate is $1.95/bushel. If the market price is above $2.35/bushel ($2.63 - $0.28) then the farmer does not receive the counter-cyclical assistance and the loan deficiency program (LDP). If the market price is between $1.95 and $2.35/bushel, then farmers receive counter-cyclical payments but not LDP. If the market price falls below $1.95/bushel, farmers will receive both types of assistance, a counter-cyclical payment of $0.40/bushel and an LDP, the amount of which is the difference between the loan rate ($1.95) and the market price. Meanwhile, the direct payment of $0.28/bushel will still be received by farmers regardless of the market price at that time.