Indonesia's infrastructure promises fail the chilli challenge

Poor infrastructure makes stable pricing difficult at the best of times in Indonesia, but the rural poor are increasingly pinning the blame for wild fluctuations in the price of staples on the policies and unmet promises of President Joko Widodo.

With Southeast Asia's biggest economy growing at its slowest pace in six years, and half its 250 million population living on less than $2 a day, price spikes on foods such as rice, sugar, beef and chillies can be devastating.

"Farming is like gambling, because we never know the price," said 32-year old Rahmat, who farms chillies on the foothills surrounding Mount Salak in West Java, about 115 km (70 miles) south of the capital, Jakarta.

Fresh red chillies are as common on Indonesian dinner tables as salt and pepper in some countries, but over the last 12 months, prices have fluctuated between around 20,000 and 80,000 rupiah ($1.48) per kg, though Rahmat says his production costs have remained at just 10,000 rupiah/kg.

Their journey to table explains much of the volatility. Rahmat's chillies are carried on rickety motorbikes across potholed dirt tracks, then loaded onto unrefrigerated flatbed trucks and bought and sold by up to six traders en route to Jakarta, where they can sit in the world's most congested traffic for hours.

Farmers use traders because of the loans and transport they offer, said Yudi Firmansyah, a chilli trader in Sukabumi who supplies vegetables to three regional markets on a rented truck.

About 15 percent of chillies reach their destination spoilt or too dry for Indonesian tastes, said Dadi Sudiana, chairman of the Association of Indonesian Chilli Agribusiness.

Spoilage rises to almost 40 percent of fresh fruit and vegetables, according to industry estimates.

President Widodo took office in October with promises to solve such problems with a massive infrastructure push, but so far his administration has failed to spend the $22 billion budgeted for such projects this year due to a lack of coordination among ministries.

Widodo, whose approval rating has slumped from 72 percent to just 41 percent in July, had promised to build more dams, modernise irrigation systems, increase planting areas for foods and provide easier access to credit for smallholder farmers.

To water Rahmat's plants, he relies on rain or fills buckets and small plastic bottles at a nearby stream. It can take up to a week of one worker's labour to water a hectare of crops.

He said he had yet to see any government help under Widodo.

"The government must boost irrigation infrastructure," said the association's Sudiana. "When the rainy season comes we plant chillies, but when the dry season comes we have no other option than to reduce our plants."

Agriculture Minister Amran Sulaiman said 2 trillion rupiah ($145 million) had been allocated this year for dam building in dry areas and the work was ongoing.

Indonesia was once self-sufficient in rice and sugar, but like many other food crops, output has fallen due to competition for farmland from either cash crops like palm oil or from industry and housing.

Since coming to power, Widodo has pursued ambitious self-sufficiency goals to protect domestic farmers.