TARGETING POLICIES TO RESPOND TO FOOD INSECURITY SHOCK SUDARNO SUMARTO NATIONAL TEAM FOR THE ACCELERATION OF POVERTY REDUCTION (TNP2K) AND SMERU OECD-ASEAN Regional Conference on Policies for Food Security Bogor, 11 November 2014

Outline  Food Security in Indonesia : Situation and its Challenges  Impact of Food Insecurity Shocks  Targeting Policy to Address Food Insecurity Shocks

Food Security in Indonesia : Situation and Challenges

Food Availability Out of four (4) strategic food commodities, self-sufficiency only in rice production (sometimes imported to sustain seasonal shocks) Others still need to be supported by imports Still categorized as “serious” in 2014 Global Hunger Index Land conversion continues to increase Low agricultural productivity Decreasing agricultural labor force Source: BPS,

Food Access and Utilization Increasing inequality measured by Gini index Lower rate of poverty reduction since the last three years Poor infrastructure, leads into high cost of distribution Shifting consumption pattern to ready-made food Food price volatility

Impact of Food Insecurity Shocks

Indonesia: 3 Large Food Price Shocks in Last 6 Years

74% of their expenditure goes toward food A 10% increase in price of rice leads to a 0.4 percentage point increase in CPI inflation (direct) and a total impact (direct and indirect) of a 0.9 percentage points increase on CPI inflation. A 10% increase in the price of rice is estimated to lead to a 1.3 percentage point increase in poverty rates. Source: BPS, SUSENAS MARCH 2014 Food price increases directly impact poor and vulnerable households Food CommodityRural %Urban % Grains/Rice Tobacco Egg Instant Noodle Sugar Tempe Tofu Non-food CommodityRural %Urban % Housing Electricity Transportation Education

Since vulnerability remains high, small shocks to food prices easily send households into poverty Source: Susenas panel data and World Bank calculations Source: Susenas m Poor 62m Vulnerable 55 percent of this year’s poor were not poor the year before …and enter poverty easily Many are vulnerable to poverty

…and can worsen the population’s nutritional status Source: Riskesdas, 2013

Targeting Policy to Address Food Insecurity Shocks

Alignment with National Strategy for Poverty Reduction …one objective is to improve targeting performance of social assistance programs. National strategy Cluster 1 (family-based) - Scholarships - Health fee waivers - Subsidized rice - Cash transfers Cluster 2 (Community- based) - Community Empowerment Programs (PNPM) Cluster 3 (SME- based) - Credit for SMEs - Other programs to stimulate job creation Cluster 4 (other pro-poor programs) -Housing -Transportation -Clean water -Electricity -Livelihoods

Utilization of national single registry system to identify potential beneficiaries New and improved proxy means testing identified the poor more accurately Expanded to cover about 25 million households, classified as the poorest 40% of the population Available for use by different anti-poverty programs to identify target groups eligible to receive benefits Using community-based meetings to update targeting lists to address exclusion errors

In June 2013 the Government of Indonesia issued the Social Protection Card (KPS) to grant access to social assistance programs. Cards were delivered to the poorest 25% households in Indonesia (based on the national registry which covers about 65 million individuals) Cards give access to:  Subsidized rice allocations (Raskin)  Scholarships for the poor (BSM)  Unconditional cash transfers …which has been strengthened by Issuing Social Protection Card (KPS)

and it has an updating mechanism PT. Pos Households Village Level Deliberation Recapitalization TNP2K’s Unified Database

Synergy with Food Security and Vulnerability Atlas of Indonesia Source: Food Security Council, Ministry of Agriculture, 2009

Complemented by Geographical Targeting Approach to Identify Lagged Areas Example: mapping of lagged areas, including poor infrastructure

…And Other Indicators, Such as Nutrition Example of targeting prioritization based on stunting levels (>40%) and poverty level (>11.47%) Source: SMERU, 2014

Conclusion and the Way Forward  The National Single Registry is the main and best available source for identifying poor and vulnerable households.  It has to be maintained to ensure it reflects the most current socio- economic status of the households  Synergy and combination with other targeting approaches will result in optimal outcomes for any budget constraints  Targeting is only part of comprehensive response to food insecurity shocks. There are other components which need to be taken into account, such as; Development of pre-determined triggers Development of a real-time reliable information system Development of a well-designed monitoring system Designing effective public communication, information dissemination and policy coordination Improving and expanding social assistance programs Improving supply-side service delivery

THANK YOU