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AGRICULTURAL LAND CONVERSION AS A THREAT TO FOOD SECURITY AND ENVIRONMENTAL

QUALITY∗)

Konversi Lahan Pertanian sebagai suatu Ancaman terhadap Ketahanan Pangan dan Kualitas Lingkungan

Fahmuddin Agus and Irawan

Balai Penelitian Tanah, Bogor, Indonesia (Indonesian Soil Research Institute)

[email protected]

Abstract

Land use changes in Indonesia have been biased towards the economic merits of industrial and urban developments at the expense of highly productive agricultural lands. Agriculture provides various functions including environmental, food security, socio-cultural, and employment functions – which collectively called multifunctionality of agriculture (MFA). Total economic value of flood mitigation, water resource conservation, erosion reduction, organic waste disposal, heat mitigation, and rural amenity functions of the 156,000 ha paddy fields in Citarum Watershed, analyzed using the replacement cost method, was about 51% ($92.67 million/year) of the total price of rice of $181.34 million/year produced in the watershed. This amount could be regarded as free services provided by the farmers to the society. However, because of society’s negligence of the importance of MFA, conversion of agricultural lands has been accelerating. In the last few years, the rate of conversation of paddy field, for example, has been far exceeding the development of new paddy areas. Moreover, the recent spatial land use plan showing that approximately 42% (3.10 million ha) of the 7.30 million ha irrigated paddy fields are allocated for non-agricultural purposes, is an indication of negligence among the local governments of the importance of agriculture. If this conversion trend continues, there will be a dramatic escalation of the country’s dependence on imported rice. To maintain rice self-sufficiency for the next twenty years, Indonesia has to curb the current conversion rate of above 100,000 ha/year to less than 29,000 ha/year. For each ha of converted paddy field 2.20 ha new paddy field has to be developed to compensate for the yield loss, because of high productivity of the current paddy fields. Low and fluctuating price of agricultural products, unavailability, uncontrolled quality, or non-affordability to purchase agricultural supplies, insecure land tenure and low accessibility to markets are among the major disincentives faced by farmers. Meanwhile, effective regulatory measures are

∗) Reprinted from Indonesian Agricultural Research and Development Journal (Dicetak ulang dari Jurnal Penelitian dan Pengembangan Pertanian), 2006, Vol. 25, No. 3

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not in place to control the conversion of highly productive agricultural lands. Highly productive agricultural lands need to be safeguarded against uncontrolled conversion using improved regulatory and incentive measures.

Abstrak

Perubahan penggunaan lahan di Indonesia selama ini sangat bias terhadap keuntungan ekonomi dari pembangunan industri dan perkotaan, namun mengorbankan lahan pertanian berproduktivitas tinggi. Pertanian mempunyai fungsi lingkungan, fungsi ketahanan pangan, dan fungsi sosial budaya - yang secara kolektif disebut sebagai multifungsi pertanian. Nilai ekonomi fungsi mitigasi banjir, pengendali erosi, pendaur ulang sumber daya air, penyerap sampah organik, mitigasi suhu udara, dan penjaga keasrian pedesaan dari lahan sawah di DAS Citarum seluas 156.000 ha, yang dihitung dengan metode biaya pengganti (RCM), adalah sekitar 51% ($92,67 juta/tahun) dari nilai jual beras total sebanyak $181,34 juta/tahun yang dihasilkan di DAS tersebut. Nilai sejumlah itu dapat dimaknai sebagai jasa yang dihasilkan oleh petani dan dinikmati oleh masyarakat luas secara gratis. Namun demikian, karena masyarakat masih mengabaikan arti multifungsi pertanian maka konversi lahan pertanian mengalami peningkatan. Dalam beberapa tahun terakhir, kecepatan konversi lahan sawah jauh di atas angka pencetakan sawah baru. Apalagi bila diperhatikan Rencana Tata Ruang Wilayah (RTRW) provinsi yang menunjukkan sekitar 3,10 juta ha sawah (42% dari 7,10 juta ha luas baku sawah beririgasi saat ini) sudah diperuntukkan menjadi areal pembangunan nonpertanian. Hal ini merupakan pelecehan yang nyata di kalangan pemerintah daerah terhadap pentingnya pertanian. Apabila kecenderungan konversi lahan ini berlanjut, maka ketergantungan negara terhadap beras impor akan meningkat secara dramatis. Untuk mempertahankan swasembada beras dari sekarang sampai 20 tahun yang akan datang, Indonesia harus menekan konversi lahan sawah yang sekarang berada di atas 100.000 ha/tahun menjadi kurang dari 29.000 ha/tahun. Untuk setiap ha lahan sawah yang dikonversi diperlukan seluas 2,20 ha lahan lahan sawah pengganti untuk menutupi kehilangan produksi karena tingginya produktivitas lahan sawah yang ada dan banyaknya masalah lahan sawah bukaan baru. Harga produk pertanian yang rendah dan berfluktuasi, tidak tersedianya dan tidak terjaminnya kualitas sarana produksi, mahalnya harga sarana produksi, tidak amannya status penguasaan lahan, serta akses pasar yang sulit merupakan masalah kronis yang dihadapi petani selama ini. Sementara itu, belum ada peraturan perundang-undangan yang ampuh untuk mengendalikan konversi lahan pertanian. Lahan pertanian berproduktivitas tinggi mutlak harus dilestarikan melalui perbaikan peraturan dan pemberian insentif kepada petani.

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Agricultural Land Conversion as a Threat

INTRODUCTION

Food security, mainly translated to self-sufficiency of key commodities including rice, is one of the highest agricultural development priorities in Indonesia. With increasing population and hence rice consumption, Indonesia had been importing between 1 and 6 million tons of rice annually following the self-sufficiency attainment in 1984. Although since 2004 the country has been attaining self-sufficiency in rice again, there is an increasing concern that substantial rice import will happen again because of accelerating rate of paddy field conversion to non-agricultural uses.

Major land use conversions occurred from forest to agricultural lands and from various agricultural systems to housing/urban and industrial development areas (Wahyunto et al., 2001). At the national level, there is accelerating rate of paddy field conversion to non-agricultural uses around development centers (Agus and Mulyani, 2005).

Bias towards industrial and urban developments have made it a lot more difficult for agricultural sector to keep up with ever increasing food demands. Multifunctionality of agriculture, i.e. agricultural functions in producing non-marketable agricultural products, including flood mitigation, erosion reduction, rural amenity, food security, organic waste disposal, carbon sequestration, biodiversity preservation, income generation, socio-cultural values preservation, and employment functions, have not been fully recognized and/or understood by policy makers and the community at large. Every stakeholder, especially policy makers, should comprehend agricultural multifunctionality, such that it could be maintained and improved.

Nishio (1999), for example, presented data of increased frequency of flood in Tokyo due to industrial development that sacrificed acreages of paddy fields in the 1980’s. Similar condition applies in Indonesia, whereby more frequent flood around Bandung and Jakarta and in around other major cities has been reported and this in part could be related to agricultural land conversion to non-agricultural use.

This paper discusses land use changes and food security as well as environmental implications. Analyses were made on policy implications for safeguarding the existence of agriculture with its multifunctionality.

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LAND USE CHANGES

At present, Indonesia is utilizing approximately 64 million ha land for agriculture, i.e. 7.80 million ha for lowland rice, 30 million ha for annual upland farming and grassland, and 25.50 million ha for perennial crops (Mulyani et al., 2003). The most productive lowland rice areas (about 3.50 million ha) are located in Java. Most of suitable land for agriculture in this island has been cultivated or used for non-agricultural purposes and therefore the potential for agricultural extensification is very limited.

Paddy field areas in Indonesia were increasing during the period of 1963 to 1993 from 4.10 to 8.40 million ha. However, from 1993, much of the paddy field areas were converted to industrial and urban development. As such, between 1993 and 2003 the area decreased from 8.40 to 7.80 million ha (CBS, 1963−2004).

Most of the conversion (Table 1) occurred in Java with highly productive paddy fields because of dense population and rapid industrial development. From the period of 1981 to 1999, the negative net balance of 0.48 million ha of paddy field occurred in Java, because of conversion of about 1 million ha and only about 0.53 million ha development of new paddy field. However, in the outer islands, the addition of new paddy fields more than compensated the conversion although not all of the new paddy fields are very productive. Nationally, there was a net positive balance of 1.60 million ha during this period or 88,500 ha annually.

Table 1. Conversion, addition, and net balance of paddy field in Indonesia in 1981-1999 and 1999-2002 periods.

1981-1999 period (adapted from Irawan et al. 2001)1

Region Conversion Addition Balance

Java (ha) 1,002,055 518,224 -483,831 Outer islands (ha) 625,459 2,702,939 +2,077,480 Indonesia (ha) 1,627,514 3,221,163 +1,593,649 Indonesia (ha yr-1) 90,417 178,954 88,536 1999-2002 period (adapted from Sutomo 2004) 2

Java (ha) 167,150 18,024 -107,482 Outer islands (ha) 396,009 121,278 -274,732 Indonesia (ha) 563,159 139,302 -423,857 Indonesia (ha yr-1) 187,720 46,434 -141,286 Remark: The total rice field in 2002 is about 7.80 million ha. 1Adapted from Irawan et al. (2001). 2Adapted from Sutomo (2004).

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Paddy field conversion in the period of 1999−2002 was alarming, where both in Java and in the outer islands it was far exceeding the addition, leaving the net negative balance of 420,000 ha nationally in the three year period or 141,000 ha annually. If this accelerating conversion and decelerating addition continues, then conversion will be the main threat to rice self-sufficiency. Since most Indonesian paddy fields are also planted to secondary crops (peanuts, soybeans, corn or vegetables) in the dry season, the production of these latter commodities will also be affected due to conversion.

The accelerating rate of conversion of agricultural lands is mainly caused by very low incentives to work in agriculture compared to industrial and service sectors. Farmers sometimes perceive agricultural land conversion as an opportunity to find better and more promising jobs and as an opportunity to earn cash from selling paddy fields and invest in other sectors. On the other hand, industrial and urban mass development projects prefer to use flat (terraced) agricultural lands with already developed infrastructure and ample water availability, neglecting multifunctionality and investment that have been made for paddy field development. The mass industrial development leaves little options to the farmers in the locality, but to sell their land.

PROVINCIAL SPATIAL LAND USE PLANNING

Spatial land use planning is developed by the district and provincial governments based on the previous trend in land use change and the development direction. It is used, among others, as a reference by the district agrarian offices to issue permit of land use. If a piece of paddy field is allocated for conversion, then there is no legal basis for the agrarian office not to issue land use permits when there are requests for such.

Table 2, based on Winoto (2005), shows that 42% of existing irrigated paddy fields nationwide are allocated for non-agricultural uses. This high figure of non- agricultural use allocation shows that there is almost no restriction for converting existing paddy field. If the 42% paddy field areas nationally are truly converted to non-agricultural uses, it will really mean a disaster for Indonesian food security and environmental quality around the converted areas.

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Table 2. Paddy field areas and spatial plan in the provinces of Java and in major outer islands (from Winoto 2005).

Total paddy field Non Irrigated Irrigated Spatial plan for irrigated paddy field Province

Paddy field

paddy field

Converted

Maintained Ha % Ha % Ha % ha % ha %

Sumatera 2,036,690 22,88 414,780 26,11 1,621,910 22,17 710,230 43,79 911,680 56,21 Jakarta 3,600 0,04 420 0,03 3,180 0,04 2,130 66,98 1,050 33,02 Banten 190,950 2,14 12,710 0,80 178,240 2,44 67,560 37,90 110,680 62,10 Jawa Barat 1,109,560 12,46 15,240 0,96 1,094,320 14,96 658,220 60,15 436,100 39,85 Jawa Tengah 1,124,940 12,64 331,910 20,89 793,030 10,84 310,410 39,14 482,620 60,86 DI Yogyakarta 65,630 0,74 620 0,04 65,010 0,89 36,690 56,44 28,320 43,56 Jawa Timur 1,332,420 14,97 75,410 11,04 1,157,010 15,82 546,830 47,26 610,180 52,74 Bali 106,270 1,19 5,810 0,37 100,460 1,37 47,760 47,54 52,700 52,46 Jawa & Bali

3,933,370 44,18 442,120 34,13 3,391,250 46,36 1,669,600 49,23 1,721,650 50,77Kalimantan 1,253,130 14,08 375,200 23,62 877,930 12,00 58,360 6,65 819,570 93,35Sulawesi 982,410 11,03 124,270 7,82 858,140 11,73 414,290 48,28 443,850 51,72Nusa Tenggara & Maluku 566,100 6,36 67,050 4,22 499,050 6,82 180,080 36,08 318,990 63,92 Papua 131,520 1,48 65,060 4,10 66,460 0,91 66,460 100,00 - - Total National 8,903,220 100,00 1,488,480 17,84 7,314,740 82,16 3,099,020 42,37 4,215,740 57,63Source: Direktorat Penatagunaan Tanah, Badan Pertanahan Nasional (2004) In Winoto (2005)


Irrigated paddy fields with their infrastructure were developed gradually with high investment and maintenance costs of about US$ 2,778/ha (Sumaryanto et al., 2001). The low tangible economic return should not justify their conversion because the remaining potential lands for paddy fields are of much lower productivity. In addition, the intangible services they exert are irreplaceable in most cases. This paper calls for a revamp of the spatial planning such that infrastructural and housing development be reallocated outside of productive agricultural lands.

MAINTENANCE OF FOOD SECURITY

Rice self-sufficiency has been considered as the utmost important indicator of food security and it is a determinant of the country’s social and political stability. Indonesian population is about 220 million in 2005. With the assumption that population growth remains constant at 1.50% annually, in 2025 the population will be as high as 296 million people. Per capita annual rice consumption will most possibly decrease at about 1%/year because of diversification and, perhaps, economic improvement. With these assumptions as listed in Table 3, demand for milled rice (subsequently will be called rice) in 2025 will be about 35.70 million tons or equivalent with 59.50 million tons of unmilled rice (paddy). This amount of paddy is about 7−8 million tons higher than the estimated production of about 51.30 million tons in 2005.

The intensification of agricultural management system is expected to increase average paddy yield from 4.50 t/ha to at least about 5.50 t/ha by 2025. This yield increase could contribute to as high as 12 million tons of paddy production by 2025 provided that existing paddy fields are not converted. However, paddy field conversion has been happening at accelerating rate and the pace may become worse if effective control measures are not enforced.

The promotion of the new type high-yielding varieties and hybrid rice, and improvement of soil management and pest and disease control can increase the average paddy yield from 4.5 t ha-1 to at least about 5.5 t ha-1 by 2025. This yield increase could contribute to as high as 12 million tons of paddy production by 2025 provided that existing paddy fields are not converted. However, paddy field conversion has been happening at accelerating rate and the pace may become worse if effective control measures are not enforced.

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Table 3. Assumptions in the calculation of extensification and respective maximum allowable conversion.

Assumption 2005 status 2025 status

Population, annual growth of 1,5% 220,000,000 296,000,000

Per capita annual rice consumption, decrease 1% per year (kg)

140 120

National rice demand (t) 30,800,000 36,700,000

Paddy equivalent (t) 51,300,000 59,500,000

Yield of existing rice fields, increase 1% annually (t/ha)

4.5 5.5

Yield of new paddy field (t/ha) 2.5 2.5

Milling recovery (%) 60 60

Average harvest index (%) 150 150

In order to keep self-sufficiency by 2025, Indonesia will need to increase rice production through combined efforts of extensification, intensification, and control of paddy field conversion. Food diversification is another approach that could be promoted concomitantly, but beyond the scope of this discussion.

In general, in Java, production could only be increased through intensification and almost no chance for extensification. In the outer islands, combination of intensification and extensification could be done provided that there are incentives to do farming.

With the assumptions as appear in Table 3, with zero conversion, intensifi-cation alone should be able to increase production to a level exceeding the domestic demands until 2025. However, the conversion rate is so high and accelerating and thus intensification alone will not sustain Indonesian rice self-sufficiency.

By fixing yield increase as high as 1% annually, then sensitivity analysis was conducted to determine the rate of extensification versus conversion using the following formula:

Paddy field area (Ai) at year Ti is calculated by:

Aoi = 7,800,000 – (Ti - 2005) x K [1] AEi = (Ti - 2005) x E [2] Ai = Aoi + AEi [3]

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Where AOi is the existing of paddy fileds area at year Ti, the constant 7,800,000 ha is the area of paddy field in 2005, K is annual conversion rate (ha yr-1), AEi is the cumulative area of newly (after 2005) developed paddy field at year Ti, and E is annual extensification rate (ha yr-1).

The production at year Ti of paddy, Pi, is:

Pi = (AOi x YOi + AEi * 2.5 ) x 1,5 [4]

Where YOi is the existing yield of paddy at year Ti, and the multiplier 2.5 (t/ha) is the yield of new paddy field while 1.5 or 150% is the average harvest index.

Rice requirement Ri at year Ti is:

Ri = PPi x Ci x 100/60 [5]

Where PPi is the total pupulation at year Ti and Ci is the per capita rice consumption (kg/capita yr-1) and 100/60 is the conversion factor from rice to paddy.

Import requirement, IRi, is needed if Pi<Ri and calculated as:

IRi = Pi - Ri [6]

Sensitivity analyses of self-sufficiency scenarios were analyzed using

equations 1 to 6 and the relationship of maximum allowable conversion and minimum extensification for maintaining rice self-sufficiency until 2025 is shown in Figure 1. For example, self-sufficiency could be maintained until 2025 if conversion rate is controlled as low as 75,000 ha/year and extensification is 100,000 ha/year. Using data of conversion rate in 1999-2002 of almost 190,000 ha/year (Table 1), supposing the country can develop 100,000 ha/year of new paddy fields then the country will progressively depend on external rice supply. Under this scenario the rice import is estimated as high as 11.40 million tons of rice in 2025.

Extensification in the past has been done mostly by farmers, especially the Javanese, since paddy culture used to be part of inherited culture. Government facilitation and involvement in extensification, such as that happening in the 1980s, will likely decrease in the future and so will the rate of extensification. Controlling of paddy field conversion has not been successful in the past as reflected by the accelerating rate of conversion. However, the community should be aware that uncontrollable conversion is the major threat of food security. Thus, base on Figure 1, the government needs to fix the maximum allowable conversion level and enact control measures to suppress the conversion to the fixed level.

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y = 2.1964x - 64212

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

0 50,000 100,000 150,000 200,000

Maximum allowable conversion (ha/yr)

Exte

nsifi

catio

n (h

a/yr

)

Figure 1. The relationship of annual maximum allowable conversion versus area of extensification for maintaining rice self-sufficiency level.

ENVIRONMENTAL FUNCTIONS OF AGRICULTURE

The evaluation of multifunctionality is divided into biophysical analysis and economic valuation.

Biophysical Evaluation

Flood mitigation function

There are various ways to estimate flood mitigation function. One of the simplest method is an estimation of water retention or water buffering potential (BP). BP is watershed capacity to absorb and hold (rain) water such that that portion of water does not flow as runoff water. This includes water that could be absorbed by soil pores, water that could be stored by soil surface, additional water that could be stored by paddy fields, dams, etc., and water intercepted by plants. Dam and irrigation network contribute to the water buffering function based on the difference between the dam capacity and initial water level.

For each land use system, Tala’ohu et al. (2001) calculated BP as:

BP = (TPS – FC) * AZ + PC + IC [7]

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where TPS is the percentage of total soil pore space, FC is percentage of soil water content at field capacity, AZ is the depth of absorption zone or rooting zone, PC is surface ponding capacity, and IC is plant canopy interception capacity.

In their calculation, initial water content was assumed at ‘field capacity’ and the difference between total pore space and FC is assumed as effective water absorbing pores. The value of IC depends on the nature of vegetation. Forest cover has the highest value and bare soil surface has zero value. Interception capacity for tree and shrub covers ranges between 0.002 and 0.076 m for one rainfall event. Annual interception loss of rain water in the Appalachian Mountains, for example, vary from 15 to 26 % of annual rainfall, i.e. corresponds to 0.30 to 0.50 m (Kimmins, 1987). Tala’ohu et al. (2001) assumed IC for single heavy rainfall event as high as 0.035 m, 0.010 m, 0.05 m, and 0.003 m for forest, mixed cropping, annual upland crops, and paddy fields, respectively. Detailed calculation of water buffering potential is provided by Agus et al. (2005) and comparison in BP between several land use systems is given in Figure 2.

Figure 2 depicts that land use systems differ in their capacity to buffer water. Forest has the highest BP and followed by the BP of tree-based multistrata (mixed cropping) system and paddy field. Annual crop based agriculture had the lowest BP, yet this land use has a much higher BP compared to housing and industrial areas.

0

20

40

60

80

100

120

140

160

Forest Paddy Field MultistrataSystem

AnnualUpland

Settlement/Industry

Buf

ferin

g po

tent

ial (

mm

)

Canopy interceptionPonding capacitySoil pore absorption

Figure 2. Water retention (buffering) potential of different land use system

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The total BP for the entire Citarik Sub-watershed was calculated as the multiplication of BP with total area of respective land use. With time, the total buffering potential consistently decreased and this corresponded to the decrease of forest and agricultural areas with relatively high BPs and the increase of industrial and housing/ settlement areas with lower BPs. This also implies that the total volume of runoff water under similar amount of rainfall is greater with time as the capacity of the watershed to buffer runoff water decreases and this translate to a higher susceptibility to floods (Agus et al., 2005). Related studies, based on actual hydrological data (for example, Widiati, 1998), exemplifies increasing water flow or, in other words, reduction of watershed water buffering capacity as larger proportion of forest and agricultural lands are converted to land uses with lower buffering capacity.

Soil loss from paddy field

Kundarto et al. (2002) conducted soil loss measurement on 18 terraces (plots) of paddy fields, each having an area ranging from 12 to 360 m2 with the total area of 2,515 m2. The macroslope (slope of original landscape) of these terraces was 22%. The dike height of each plot is 10−15 cm and its width is 28 cm. Average elevation difference between plot is 73 cm. Results of the measurements of sediment transport are given in Table 4.

Table 4. Sediment transport into and out of 18 rice terraces having a total area of 2,515 m2 during two seasons of rice crop.

Rice crop Observation First season Second season

Duration of observation (days) 1 Nov’01-31 Jan’02 16 Mar-30 Jun 02 Total sediment from irrigation canal entering the system (kg)

864 (3.4)

1,567 (6.2)

Total sediment leaving the system (kg)

347 (1.4)

210 (0.85)

Sediment net gain (kg) 517 (2)

1357 (5.4)

Sediment leaving the system during soil tillage (kg)

181 (0.72)

165 (0.65)

Numbers in parenthesis are in ton per hectare. Source: Kundarto et al. (2003)

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The data show that there were net sediment gains in paddy field as high as 2 t/ha in the first season and 5.40 t/ha in the second season. Visual observation showed that standing water in the plots was heavily loaded with sediment during and shortly after plowing and pudling. Sediment transported from one plot was mostly deposited in the next few plots downward and thus the net output from the 18 terraces was very low (about 2.20 t/ha/year) for the two seasons. In comparison, sediment output was about 10−20 t/ha/year from a nearby 1.10 ha catchments planted to annual upland crops (Agus et al., 2002). The 18 terraces also received sediment from the irrigation canal, upward from the terraces, but this sediment did not reach the creek down-ward of the terraces.

Nitrate content in ground water

Nursyamsi et al. (2001) reported the results of measurements of nitrate and ammonium concentrations in water samples from wells of selected sites in Citarik and Kaligarang Watersheds as shown in Table 5. The data show that, NO3- concentration in many wells under annual upland conditions exceeds the maximum concentration limit (MCL) according to the United States Environmental Protection Agency (USEPA) as high as 10 mg NO3-N/l (CAST 1985). Drinking water containing nitrate above the MCL can potentially cause methemoglobinemia, a blood disorder to which infants are particularly susceptible (Fletcher, 1991).

Farmers in Java, especially those involved in lowland rice intensification program, tend to apply fertilizers at rates higher than that for annual upland food crops (Adiningsih et al., 1997). Nevertheless, nitrate concentration in wells under paddy field environment was relatively low. These data proved that paddy fields have a healthier environment in terms of nitrate concentration of well water.

Erosion control, flood mitigation, and reduction of nitrate in the ground water are only examples of environmental multifunctionality of agriculture explained in this paper. Agus et al. (2005) elaborated other functions such as organic waste disposal function, cooling off effect of air temperature, water preservation functions, and rural amenity functions as will be explained further (in section of Economic Valuation). These functions will disappear as more and more agricultural lands are converted.

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Table 5. Nitrate- and ammonium-nitrogen concentrations and standard deviations in wells under paddy fields, annual upland and multistrata cropping areas, forest, and river water in Citarik and Kaligarang Watersheds.

Land use n Nitrate-N Ammonium-N Mean Std. Mean Std Citarik Watershed Paddy field 26 4.61 + 4.53 3.18 + 5.81 Annual upland 16 10.31 + 12.44 0.20 + 0.29 Mixed cropping 9 7.79 + 10.95 0.02 + 0.05 Forest 2 0.94 + 0.35 0.18 + 0.25 River 6 2.46 + 2.41 1.06 + 1.73

Kali Garang Watershed Paddy field 11 1.11 + 1.42 0.48 + 0.45 Annual upland 4 26.48 + 26.87 0.13 + 0.13 Mixed cropping 25 8.13 + 5.63 0.08 + 0.13 Forest 1 0.92 + 0.00 0.00 + 0.00 River 18 3.90 + 1.39 0.20 + 0.26

Source: Adapted from Nursyamsi et al. (2001)

Economic Valuation of Selected Environmental Functions of Paddy Field

This valuation is an attempt to translate several services produced by agriculture into economic term using the replacement cost method (RCM) as exemplified by Yoshida (2001) for Japanese case. In this paper the replacement cost simply means the estimated costs for restoration of environmental services if paddy fields are converted to other uses.

A study by Wahyunto et al. (2001) for Citarik Watershed revealed that most of paddy field conversion occurred near the urban or suburban areas and that the main successive land uses are settlement, urban, and industrial areas. Therefore, the calculation was based on this logic of land use changes. The principles of RCM calculation for selected functions are given below and the detail calculation is given by Agus et al. (2005).

Replacement cost of flood mitigation function

Paddy fields surrounded by dikes temporarily store water at times of heavy rain, and discharge it gradually into down-stream rivers and surrounding areas. In

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this way, they function as mini dams and thus mitigate the damage which might otherwise be caused by floods.

Replacement cost of flood mitigation function is the cost of constructing and maintaining a dam to replace the function of flood mitigation of paddy fields had the paddy fields been converted.

Replacement cost of water preservation function

Paddy fields receive rainfall and irrigation water and release water in the forms of direct runoff, evapotranspiration, and percolation. Part of the percolated water (in this case assumed 75%) reaches the rivers through underground flow and eventually reaches dams. The rest of the percolated water recharges the ground water. The waters from paddy field recharging the ground water and reaching the dam as well as the runoff water that flows to the river and reaches the dam are called the preserved water, and the corresponding function of paddy fields is called water preservation function.

Replacement cost of preservation of water resources is the value of the portion of water used in paddy fields that is recycled and used again for irrigation and/or drinking water. For irrigation water, the replacement cost is valued based on the pricing of irrigation water and for drinking water. The replacement cost was based on the difference between costs of obtaining municipal tap water and that of traditional well. Figure 3 schematically depicts the partition of rainfall and irrigation water in paddy fields.

Figure 3. Schematic diagram of annual water balance for paddy field in Citarum watershed

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Replacement cost of erosion prevention function

Replacement cost of erosion prevention is the cost of constructing dam and/or other sediment collecting structures because of land use change from paddy field to other land use systems with higher sedimentation. Soil erosion under paddy fields is negligible (comparable to that of forest land) regardless of the major (macro) slope of the land (Agus et al., 2002). If paddy fields are converted to urban and industrial areas, it will create almost impermeable soil surface on areas used for building and paving and thus increase runoff and erosion on the exposed surfaces.

The difference in the volume of soil loss from the upland farming system with that of paddy fields was estimated and given a monetary value based on the cost incurred by constructing a dam to retain the sediment.

Replacement cost of waste disposal function

Organic (biodegradable) wastes such as food residues and human wastes from non agricultural activities can be applied to agricultural lands such as paddy fields as compost or as fresh organic matter. This practice lowers waste disposal costs compared to disposing biodegradable organic wastes to dumpsites. Organic matter returned to the fields can supply nutrients and maintain/increase soil organic matter content. The following assumptions applied for this valuation:

• The community is already accustomed to separation of wastes into bio-degradable and non biodegradable components.

• Institutions for monitoring and evaluating the toxic components in the wastes such as heavy metals and recalcitrant toxic substances have been established and functioning.

The replacement cost for waste disposal could be calculated by either one of at least the following two ways: 1) reduction of transportation cost of wastes had the wastes been applied to agricultural areas in the vicinity of wastes sources rather than transporting it to distanced dumpsites, or 2) payment from each household collected by the municipal government for waste disposal.

Because of more reliable data and simplicity, Agus et al. (2005) based their calculation on the household payment for waste disposal.

Replacement cost of heat mitigation function

Replacement cost for heat mitigation is calculated based on the fact that as paddy fields are converted to urban and industrial areas, there is an increase in air temperature. The loss of cooling effect of paddy field is replaced by the community by utilizing artificial cooling systems, such as fans and air

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conditioners and costs for purchase and maintenance of fans and air conditioner are used for valuation of heat mitigation function.

Replacement cost of preserving rural amenities for recreation function

Agricultural lands not only constitute beautiful agricultural landscape, but also create unique natural, cultural, and social environments attracting those living in urban areas to visit. Replacement cost of rural amenities is the sum of transportation and lodging costs of people visiting agricultural areas per unit of time. Setiyanto et al. (2003) estimated the value of rural amenity in Citarum River Basin as high as $18,232,623/year.

Table 6 gives annual marketable rice value and summary of non-marketable replacement costs of environmental functions in Citarum River Basin as elaborated in the previous sections. The estimated sum of marketable values of paddy field was about $181,342,667 and sum of non-marketable values was $92,672,627/year (about 51% of the marketable rice products). This 51% ($92,672,627/year) is the value of services by paddy farmers to the surrounding community, free of charge. This level of services could continuously be provided by paddy farming (paddy farmers) if the current paddy fields are not converted.

Table 6 gives annual marketable rice value and summary of non-marketable replacement costs of environmental functions as elaborated in the previous Sections. The estimated sum of marketable values of paddy field was about $181,342,667 and sum of non-marketable values was $92,672,627 yr-1 (about 51% of the marketable rice products). This 51% ($92,672,627 yr-1) is the value of services by paddy farmers to the surrounding community, free of charge. This level of services could continuously be provided by paddy farming (paddy farmers) if the current paddy fields are not converted.

The economic values as presented in Table 6 do not include other important services such as food security, carbon sequestration, conservation of biodiversity and socio-economic and cultural functions because of complication in the methodology. Should the economic values of these later functions be included, the sum of the non-marketable values can easily exceed that of the marketable value.

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Table 6. The values of non marketable services provided by paddy fields in Citarum River Basin, West Java1.

Function Value ($ year-1)

Marketable/tangible values 181,342,667

Non-marketable or Replacement costs of environmental functions

Flood mitigation function 18,104,983

Conservation of water resources 51,232,550

Soil erosion prevention function 26,977

Function of organic waste disposal 812,537

Rural amenity preservation function 18,232,647

Heat mitigation 4,262,933

Total non marketable value 92,672,627

Non marketable / marketable value (%) 51 1based on calculation using the replacement cost method and its comparison with the value of marketable rice grain product.

CONCLUSION

Agricultural land conversion has been happening at accelerating pace and it may become worse unless effective incentives and regulatory control measures are enforced. The conversion is a major threat to Indonesian food security (self-sufficiency in rice) as well as on environ-mental quality.

The devolution has been regarded as an opportunity by the local government to boost the local economy, by prioritizing the most profitable economic development and, in most cases, sacrificing agriculture because of low tangible benefits. The current national spatial plan, showing that 42% of irrigated paddy fields are subjected to conversion, is an obvious negligence of multifunctionality as well as 'conventional' food and fiber production function of agriculture and a violation of the objectives of agricultural revitalization. Since this spatial plan will clearly promote faster conversion, there is an immediate need for its revision for the revitalization to succeed. The need for land for the development of other sectors is not questionable, but this should not sacrifice productive agricultural lands. Thus, the recent spatial plan needs to be reinvented and realigned with agricultural development objectives.

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Agricultural lands, especially paddy fields, tree-based systems, and well-conserved annual upland farming provide various environmental services and food security as well as other intangible benefits. For these services they provide, farmers deserve incentives such as secure tenure, subsidized inputs, quality control of agricultural supplies, and better market access.

As more and more agricultural lands are converted to housing and industrial areas, the environmental services such as flood mitigation function and erosion reduction function diminish, leading to more frequent and intensified floods and more serious erosion and sedimentation.

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