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"In spite of all the setbacks caused by the destruction last September [1999], when the Indonesians withdrew from East Timor, agriculture is the activity that depends most on the Timorese themselves and is also the area that is now showing the clearest signs of recovery ... The people’s best protection against food insecurity lies in diversification," East Timor Observatory

East Timor Observatory

Ref.: AGRI01-14/09/2000

Subject: Agriculture, rehabilitation and development


Contents:
Summary
Background
The Facts
Conclusions
Note

Summary:


Employing over 80% of the population, contributing 40% of GDP, and accounting for 90% of foreign exchange, Timorese agriculture is of vital importance in all respects. In spite of all the setbacks caused by the destruction last September, when the Indonesians withdrew from East Timor, agriculture is the activity that depends most on the Timorese themselves and is also the area that is now showing the clearest signs of recovery: in 6 months, cereal production rose to 75% of its previous level, while coffee production has been restored 100%. None of the other sectors with the same international dependence on international aid has achieved anywhere near these results. However, there are still many problems that prevent the majority of East Timorese from escaping from the poverty in which they have been kept. The pockets of malnutrition that still persist are to be found in the areas growing coffee. As coffee is the territory’s chief cash crop, there is a danger of it becoming the monoculture in areas more suitable for cultivation. The people’s best protection against food insecurity lies in diversification, but this does not appear to be regarded a priority by the foreign players whose main focus is on coffee production. The fact that organically grown Timorese coffee is highly valued on the international market is a sign of a potential export market niche waiting to be exploited. Fishing resources, now being exploited at less than 1% of their potential, deserve greater attention.
 

Background:


Many years of colonisation without real development, followed by an deliberate wave of looting and destruction, form the backdrop for all the rehabilitation and development work that is underway. Agriculture cannot be regarded in isolation from the wider context that includes transport, markets, and sustainability.
 

The facts:


1. Agriculture in the Timorese economy

Prior to 1999, while over 85% of the population depended for on agriculture for their livelihood, it only accounted for 40% of the GDP. Agricultural exports made up 90% of East Timor’s foreign exchange (World Bank, Project TPPE70553, May 2000). Only half the territory’s 600,000 hectares of arable land is being used, according to the FAO/WFP, that describes East Timor’s economy as being largely dominated by subsistence "low input low output" agriculture (FAO/WFP, Special Report, 19-4-2000). Poor investment and production levels do not mean, however, that agriculture is not extremely important for the Timorese. Both national and international leaders have acknowledged the pivotal role of agriculture in East Timor’s future: it is "the base of our economy" (Xanana Gusmão); "a great opportunity" (Ramos Horta); "the mainstay of East Timor’s economy" (Sergio Vieira de Mello); "Agriculture will lead economic growth for some time" (Sara Cliffe, World Bank’s chief of mission for East Timor).

2. Destruction and Rehabilitation

Many sources refer to the fact that although the statistics produced by Indonesia on East Timor are wholly unreliable, they are the only ones available and so are necessarily being used as a basis on which to calculate comparisons and forecasts. The accuracy of the latter is, therefore, relative.

Klaus Rohland, World Bank (WB) director for East Timor, said that the September 1999 scorched-earth policy had reduced per capita income from $US380 to around $US190 a year (The Australian, 1-3-2000). The devastation not only resulted in loss of food and seed stocks, but also in the loss of assets and infrastructures needed to restart economic activity and production cycles (agricultural tools, seeds, livestock, water pumps, irrigation networks, etc). Human resources were badly affected by the displacement of 75% of the entire population in September – over 30% were taken, forcibly or otherwise, to Indonesia. All trade came to a halt with the disappearance of purchasing power and means of transport, deterioration of roads and closure of the border with Indonesia (FAO, 19-4-2000, Special Report).

Certain risks are attached to the much-needed foreign aid. The Timorese organisation HAK has reported that, in some cases, instead of receiving assistance with getting their own production process underway, farmers are being handed over free supplies of rice, which could prolong their dependency on aid (Fundação HAK, 4-2-2000). The FAO has acknowledged that some seed varieties given to farmers are not physiologically adapted to conditions in East Timor (FAO, 19-4-2000).

3. Subsistence farming

Three principal crops are produced: 2 for subsistence crops – maize and rice, and 1 for export – coffee. The season for cereal crops is from November to May throughout the territory. In some areas, especially along the southern coast where a second rainy season and irrigation makes it possible, a second harvest is produced that accounts for 10% of total cereal production, although this percentage could be increased. For most crops, soil preparation work begins before the start of the rainy season in November. In the agricultural year 1999-2000, almost a quarter of the population had not returned to their land in time for maize planting. Those who did manage to make it back in time had to engage in rebuilding their homes and other priority work. Manpower shortages were most acute along the border districts and areas close to the Oecussi enclave. "Monoculture areas would be more affected by this phenomenon [food shortages] than mixed-culture areas", reported the FAO (UNTAET, 9-8-2000). Lasaun, a monoculture area in the coffee-growing district of Ermera, is an example of this (WFP, press briefing, Kerren Hedlund, 28-1-2000).

a) Maize – maize is by far the staple diet among the East Timorese. Three times more maize is produced than rice, and three times the area of land is given over maize growing. It is planted at the start of the rainy season in November, and harvested in April. The onset of planting times seems to have been an important motivation for many deportees/refugees to return, and their later return was offset by the fact that the rains arrived later last year than usual. Given the amount of rainfall, a good harvest was forecast (UNTAET, 14-1). The final harvest was, however, only relatively successful: 94,000 tonnes, i.e. 75% of the total produced in 1997-98, the reference year (FAO, 19-4.). While regarded as satisfactory, this result conceals some problem areas, as well as the particular hardship faced by people living near the border with Indonesia and in the Oecussi enclave – where persisting militia activities across the border were still causing a climate of insecurity. The FAO also reported "post-harvest and storage losses that would be appreciably higher than in previous years" because new varieties were used "that are not physiologically adapted to conditions in East Timor", and because storage facilities had been destroyed. Finally, rats destroyed an estimated 70% of the second harvest in the district of Viqueque, the largest production area.

b) Rice – Rice is the second most important crop in terms of both diet and production. Growing is divided into irrigated (40%) and non-irrigated fields. Traditionally, water buffalo are used, "which are essential for the preparation of the land" (FAO, 21-12-1999). Planting is done in December-January, after maize has been sown, and harvested in May-June. As in the case of maize, rice production was also adversely affected in 1999/2000 by labour and seed shortages. Rice cultivation was also adversely affected by the shortage of tractors and buffaloes, stolen or killed in September (FAO, 21-12-1999). Seed shortages were overcome through the supply, by international organisations, of seed varieties that, in theory, were to produce higher yields but that, in fact, were not adapted to conditions in East Timor. In spite of the difficulties, given the abundant rainfall during the rainy season, 30.500 tonnes of milled rice production was expected, which is 70% of the 1997/98 harvest (FAO, 19-4). This forecast was probably revised after the floods in May, but new figures were not issued. The second rice crop in Viqueque, that was expected to produce a surplus, was badly affected by rats that reportedly damaged between 60 and 90% of the rice fields (UNTAET Briefing, 27-7-2000).

c) Other crops - various tubers, pulses and fruits complement the people’s diet. "Cassava and sweet potatoes are important security crops and constitute the main source of food in difficult years". With a deficit in cereal production this year estimated at 44,600 tonnes, but cassava and sweet potato production estimated at an equivalent of 12,500 tonnes of cereals, the overall food deficit for this year is likely to be 32,100 tonnes (FAO, 14-9-2000). Beans, chickpeas, bananas are also usually grown in family kitchen gardens.

4. Export Crops

Coffee – Coffee is the country’s main export commodity. Until 1994, East Timor’s coffee was controlled and exported by Indonesian companies linked to the military (SMH, 28-2-2000) that used to buy it for around one-fifth of the market price in Indonesia. After 1994, a non-profit organisation, the National Cooperative Business Association (NCBA) backed by USAID substituted the military’s role and became the largest coffee purchaser. It pays better prices to farmers, but continues to wield quasi-monopolistic control over the industry.

The harvest for the year 2000 is expected to be 8,000 tonnes (Financial Times, 4-3-2000), a little higher than the average over the past 5 years. It is high-grade organically grown coffee. The coffee sold by the NCBA holds international organic/biological certification, something that could be applied to almost the entire crop, and has high international market value.

Last February, the CNRT, and in particular João Carrascalao who owns coffee plantations, invited Portuguese businessman Rui Nabeiro, owner of Delta Coffees, to visit East Timor with a view to buying a significant part of the coffee harvest. In the end, however, instead of buying the 4,000 tonnes of coffee initially announced (AP, 8-2-2000), or the 2,000 tonnes announced later (Lusa, 25-2-2000), Nabeiro bought only 200 tonnes (Público, 2-3-2000). He was disappointed that the coffee would be delivered unhusked. He also realised that, just before his arrival, the US co-operative had doubled its purchase price: "I have increased the value of your coffee merely by coming here" (Público, 29-2-2000). Recommending that farmers should remove the husk from their coffee beans before selling, which would increase the value of the product by 30 to 40%, the Portuguese businessman sent 50 manual husk-removing machines to the country, while UNTAET supplied another 30. The NCBA pays farmers 60% of the export price, and reinvests profits in social services such as clinics (FAO, 19-4).

Robert Randolph, USAID Assistant Administrator for Asia, stated before the US Senate that an US$8 million investment would increase the number of families employed in the coffee industry from 17 to 40,000 over the next 4 years. He expected that the coffee industry in 5 years would support 160,000 East Timorese – about 25% of the population (US Senate, 25-4). UNTAET’s Agricultural Department estimated that "48,000 farmers are involved in growing the crop and are going to produce between 8,000 and 10,000 tonnes" (UNTAET, 5-7).

Several statements made before the Senate show that the US has faith in East Timor’s coffee industry, and regards it a mainstay of the new country’s future economy. USAID has pledged US$6 million over 3 years to develop the industry (World Bank, report nº 20439-TP).

5. Livestock

Water buffalo are used to prepare rice fields for planting. Domestic animals generally, even chickens, are regarded as "an income generating asset, rather than for consumption. It is rare for people to eat their own livestock, except during funerals and festivals. … Eggs are only infrequently consumed, as the preference is for poultry breeding" (FAO, 19-4-2000).

In March, when 60 buffalo in the sub-district of Dilor (Viqueque) suddenly died, vets were unsure about the cause. Reports at that time mentioned that there had been 1,000 buffalo in Dilor (UNTAET report, 26-1-2000), one of the 64 sub-districts, but gave no figures for the total number of cattle throughout the country. Indonesian livestock statistics published in 1998 put the figure for animals slaughtered in 1997 at: 5,500 cows and 1,700 buffalo (Livestock Service of East Timor Province, 1998, quoted by the World Bank, 26-5-2000).

6. Fisheries

Sea fishing and pisciculture were always small-scale. A Columbia University study (November 1999) found that less than 1% of sea fishing potential was being utilised. With the disappearance or destruction of boats last September (there had been 1,400 canoes and small craft, 630 boats with outboard motors and a few trawlers) fishing practically came to a standstill. The main fishing port, Hera in Dili, remains abandoned (UNTAET and WB Background Paper, June 2000). International organisations have been focusing little attention on the fishing sector. The first fisheries specialist, from the FAO, visited the country only in March. Among other urgent recommendations, he called for the emergency repair or replacement of 15 trawlers, replacement of small-scale fishing canoes, and the setting up of ice production and iceboxes (UNTAET, 12-4-2000). The World Bank included the rehabilitation of fisheries in its overall Rehabilitation Project, but has allotted no funds for it. Various Asian countries have pledged aid, and/or expressed willingness to invest in the fishing sector and/or acquire fishing rights. The West Australia fishing industry called for donations of fishing gear to help fishing communities (over 2,000 East Timorese) re-establish themselves. While the Timorese wait, Indonesians are fishing unrestrictedly in East Timor’s territorial waters, even using outlawed fishing methods, such as explosives (UNTAET, 9-5-2000). Portugal’s proposal that a navy corvette should patrol territorial waters for security and observation purposes was rejected.

7. Environment/Forests

The main cause of deforestation is burning to clear land for planting. The markedly sloping terrain combined with periods of intense rain causes erosion which, in the medium term, are likely to give rise to serious problems for farmers. Although UNTAET has launched an awareness-raising campaign dealing with burning and has published a law banning wood exports, and although the World Bank has stated it attaches "great importance" to environment protection, no funds have been budgeted for conservation of forests or other natural resources. "Zero budget for the environment is a wrong decision", said the director of the Timorese environmental NGO Haburas (Kyodo, 27-7-2000).

8. Structures and Training

In July, UNTAET’s Agricultural Department was succeeded by the Agricultural Affairs Department, which is part of the Economic Affairs Ministry. The Department has a Fisheries Section. The Department Head is still Serge Verniau, who occupied the post under the UNTAET Government. The training of Timorese in the farming sector, which is one of the components of the World Bank’s Agriculture Rehabilitation Project, especially in terms of the PASC (Pilot Agricultural Services Centres), is currently limited to a few initiatives: training of farmer in long-term rice production, funded by the Norwegian government, training young Timorese refugees in Portugal, and training 23 technicians under a UNTAET/CNRT-funded project.

9. Projects and Funds

After the initial emergency phase, during which projects necessarily focused on distribution of food, seeds and basic tools, and international agencies, departments, NGOs, and others worked independently of each other, the World Bank’s Project, established on the basis of and with the funds pledged at the donors’ conferences held in Tokyo (December 1999) and Lisbon (June 2000), aims to build a structure for the creation of sustainable agriculture. Part of this 2 year project is to be managed by the World Bank (TFET – Trust Fund for East Timor) and a part will depend on bilateral aid.

The World Bank put forward various overall budget proposals ranging from US$37 to US$52 million. The TFET budget was finally set at US$18.9 million, following the June 2000 donors meeting in Lisbon. As, at this stage, it was impossible to define the different projects, the plan was divided into two phases: the first runs from July to December 2000 (US$ 6.8 m), the second phase ends in December 2002. The start of the second phase has not yet been scheduled, and could start before the first phase ends.

The World Bank grouped four sectors, regarded as priorities, into an "Agriculture Rehabilitation Project" (ARP), and these sectors are to be largely funded by the TFET.

1 – Priority Productive Asset Restoration. Vaccination of livestock; providing 20,000 needy families with 100,000 chicks; 1,000 head of buffalo and 1,000 head of cattle; hand tools, awareness-raising campaigns to inform farmers about benefits available under this and other projects (US$3 million).

2 – Irrigation/Rural Infrastructure Rehabilitation and Maintenance of 7,000 ha., maintenance of rural access roads through community participation (US$8.6 m).

3 – Pilot Agriculture Services Centres (PASC). Eight centres providing agricultural services, staff training, community radio stations for technical information and advice, land mapping, training for research, research lab and experiment stations (US$6.0 m).

4 – Project Management Unit within the Department of Agricultural and Rural Development over 2 years (US$1.5 m).

Other sources are to complement funding of the above. For example, large contributions are expected from Portugal (to points 1 and 3 above, with US$1 and US$10 million respectively), and Japan (to point 2, with US$6 million), while other areas will only receive bilateral aid: from Australia, for the meteorological stations (US$ 0.5 m) and fisheries (US$ 0.2 million); from Japan, Macao and Norway for agricultural mechanisation (US$ 1.7 million); from the US for agricultural colleges, including university (US$ 2 million) and for coffee development (US$ 6 million), etc. "The lack of interest on the part of the majority in bilateral aid for agriculture ", with the exception of coffee, remarked on by the WB, can signify that it will be difficult to cover the overall programme and to obtain aid in the future. Lack of aid for fisheries may be a sign to foreign fleets waiting to step in.
 

Conclusions:

1. The areas of intervention and amounts pledged show a degree of commitment on the part of the international community after years of conniving silence about Indonesia.

2. Some of the pitfalls associated with emergency aid, such as the risk of jeopardising local production by distributing free food, were largely avoided thanks to lessons learned from past experience.

3. Soil erosion poses the greatest threat to Timorese agriculture. Even taking into account the emergency situation, forests and the rest of the natural environment deserve to be dealt with as genuinely important issues. This involves the long-term planning of all aspects of agriculture in their wider context – now, at the beginning.

4. Crop diversification offers the best guarantee against food the insecurity found in monoculture areas. Given that the Timorese themselves are not in a position to invest in diversification, excessive foreign interest in the export crop could lead to an increase in food vulnerability. Liberalisation and globalisation could, in this context, be dangerous.

5. The risks involved in increasing economic dependence on a single crop should not be ignored. The fact that Timorese coffee’s appeal is due to the fact that it is organically grown should be used to promote the production of other organic food crops – horticulture and tropical fruit growing could be profitable alternatives. Given Timor’s proximity to Australia, the possibilities in terms of sustainable agricultural products and ecological tourism should not be underestimated. Doubling the area that is currently under cultivation, and extending the areas in which it is possible to obtain two harvests per year would increase production without having to resort to chemical fertilisers and pesticides, with which Timorese farmers have little experience anyway.

6. The question of fishing resources, exploited to less than 1% of capacity, deserves far greater attention than the TFET plan affords it. Balanced management of these resources is far more likely if undertaken by the Timorese themselves, than if third parties are granted fishing rights or they exploit resources without authorisation.

7. Training Timorese in all agriculture and fishing-related areas is of paramount importance if the independence they chose a year ago is to be achieved.
 

Note: Documents and information relating to this subject have been compiled between 1-1-2000 and 31-8-2000 by the East Timor Observatory in a 42-page thematic Dossier entitled "Agriculture – ref. AGRI01". The Dossier and/or further information may be ordered from the East Timor Observatory.


Observatory for the monitoring of East Timor's transition process a programme by the 'Comissão para os Direitos do Povo Maubere'
Coordinator: Cláudia Santos 
Rua Pinheiro Chagas, 77 2ºE -  1069-069     Lisboa - Portugal
ph.: 351 1 317 28 60  -  fax: 351 1 317 28 70  -  e-mail: cdpm@esoterica.pt
URL: http://homepage.esoterica.pt/~cdpm

Portuguese:
Observatório Timor Leste  Updated Jan 25
Duas Organizações Não Governamentais portuguesas, a COMISSÃO PARA OS DIREITOS DO POVO MAUBERE (CDPM) e o grupo ecuménico A PAZ É POSSÍVEL EM TIMOR LESTE que, desde o início da década de oitenta, se solidarizam com a causa do Povo de Timor Leste, tomaram a decisão de criar o OBSERVATÓRIO TIMOR LESTE. A vocação do Observatório Timor Leste é, no quadro das recentes alterações do regime de Jacarta face a Timor Leste, o acompanhamento, a nível internacional, do processo negocial e, no interior do território, do inevitável período de transição que se anuncia.
correio electrónico: cdpm@esoterica.pt  URL: http://homepage.esoterica.pt/~cdpm/framep.htm

English:
East Timor Observatory  Updated Jan 25
ETO was set up by two Portuguese NGOs - the Commission for the Rights of the Maubere People (CDPM) and the ecumenical group Peace is Possible in East Timor,  which have been involved in East Timor solidarity work since the early eighties. The aim of the Observatory was to monitor East Timor's transition process, as well as the negotiating process and its repercussions at international level, and the developments in the situation inside the territory itself.
E-mail: cdpm@esoterica.pt  Homepage: http://homepage.esoterica.pt/~cdpm/frameI.htm

French:
Observatoire Timor-Oriental  Updated Jan 25
Deux Organisations Non Gouvernementales portugaises, la ‘Commission pour les Droits du Peuple Maubere’ et l’association oecuménique "La Paix est Possible au Timor Oriental", qui se solidarisent avec la cause du peuple du Timor Oriental depuis le début des années 80, ont pris la décision de créer un OBSERVATOIRE TIMOR ORIENTAL. La vocation de cet observatoire est d’accompagner le processus de transition du Timor Oriental, aussi bien le processus de négociation que ses répercussions au niveau international et l’évolution de la situation à l’intérieur du territoire.
courrier électronique: cdpm@esoterica.pt  URL: http://homepage.esoterica.pt/~cdpm/framef.htm


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