Modernising Agriculture

Recently the Monash University team released a report on Modernising Agriculture - you can download a copy at We’re going to write a few blogs that explore some of the ideas in that report.  This first one will provide an overview of the main themes. Later blogs will get into the details of specific recommended actions.  Please enjoy.

Agriculture matters! 

For most Timorese adults, working on the land is their main daily activity and source of their family’s livelihood (Census, 2015).  Investing in agriculture is essential for an economy that benefits the majority of the population.  Some facts to illustrate:

  • More than 200,000 working-age adults (60%) rely on agriculture as their main economic activity, the vast majority employing traditional farming practices. 

  • Around 30,000 young people finish their education each year, and most will be looking for jobs.

  • No other sector can create enough employment to absorb this growth.  For example, the 2017 Tourism Policy has a very ambitious aim of creating 15,000 jobs in tourism-related services by 2030 - but this is not even enough for just one year’s growth in labour supply.

  • The Oil and Gas sector may be good for government revenues, and hence government employment, but it doesn’t generate jobs.  For example, there will be less than 500 ongoing jobs coming from the proposed LNG facility on the South Coast.

  • While Dili is growing rapidly, rural areas of the country are also seeing population growth.   Projections show that even in 20 years’ time, more than 50% of Timor-Leste’s population will still be rural.   

Any realistic path to economic development must include investing in agriculture.  But we must face the reality that progress has been slow, and learn the lessons – perhaps new approaches are needed.  The report focuses on what is involved in the early steps towards a modern agricultural sector.  

The realities of COVID-19 make a further case for the importance of agriculture. It highlights the importance for nations to have food security, greater control over their own food production.

* How it works

There are three key elements to agricultural activity: 

Inputs (farmers need access to quality seeds, and other inputs); 

On the Farm (These inputs need to be used efficiently to increase yields); 

The Market (Farmers need a market for their production).

The Big Squeeze

Farmers in Timor-Leste face one basic problem, which we call The Big Squeeze:

Timorese farmers typically have poor quality inputs, lack tools and other resources, and have difficulties accessing markets.  As a result, they work harder, produce less output and receive a lower reward for their effort than most farmers in Asia.  This drives down their incentive to produce more. This is The Big Squeeze on Timorese farmers.  

Imagine being asked to work hard in tough conditions and offered little reward for your work.  You would probably do what you must in order to survive, but it’s unlikely you will be willing to increase the effort or take the risk of new approaches.

Farmers and businesses are generally ambitious and keen to succeed, and willing to learn and adopt new practices, provided they can see the benefits and manage the risks.  The problem is, The Big Squeeze means that without additional support, there is little incentive for them to do that. 

Industry Incentives make things happen

For the agricultural industry in Timor to grow and modernise, we argue that Government needs to create Industry Incentives that encourage farmers and businesses to invest more time and money in growing their businesses.

The kinds of incentives discussed in the report include farmer vouchers for inputs, subsidised import or production of inputs, improved access to credit, as well as export incentives and guarantees and tax incentives.  Once incentives like these are in place, investing becomes more attractive, and farmers and entrepreneurs will take the opportunities presented to them.  We will look more closely at these ideas in later blogs.

Large Farms can lead the way 

Alongside these incentives, that are designed to support all farmers and businesses, modernising agriculture will also need to support the emergence of large or Nucleus Farms.  These farms provide valuable leadership in accessing inputs, introducing technology, creating employment, and improving market access, that can greatly benefit small farmers.  The report proposes an incentive for establishing and growing large farms by addressing the most critical constraint: the secure access to land, alongside improved credit arrangements.

Coffee, Konjac, Chickens, Aquaculture and more

We all know that besides revenue from oil and gas, coffee is Timor-Leste’s one big export commodity ($20million in 2018).  In recent years, Konjac has emerged as the next biggest ($2million in 2018).  In a small sector, it makes sense to build on strengths, so we recommend a focus on these two commodities.  

Looking at imports, there are some commodities where Timor-Leste relies on a large volume of imports, and yet has plenty of capacity to build local production - including rice, chicken and eggs, as well as other meat and fish products and others.  There is clearly plenty of local demand for these commodities, so investing in local production that competes with imports on quality and price will help improve farmer incomes and local food security.  The future for agriculture is in specialising in a few areas.  We explore obvious crops where there is a known market, either through exports or growing local demand. Coffee, Konjac, Chickens, Aquaculture and more …

The report investigates these specific crops in more detail, and proposes a range of incentives that would address the most critical constraints holding back investments in these crops.  The idea is simple: what are the “bottlenecks” preventing growth in the production and marketing of these commodities?  Usually there are just a few critical points in the supply chain that are holding back growth.  Once these are identified, a plan can be developed for changing the incentives for farmers and businesses - reducing costs, increasing returns, reducing risk. 

Lastly, a few thoughts about Economy-wide reforms that would really make a big difference to agriculture … 

Access to Credit 

A big challenge faced by businesses, especially in animal and aquaculture production, is with funds for capital investment. This bottleneck can be addressed by government support for agribusiness credit.  This can be achieved by providing interest rate subsidies and a partial government guarantee on loans to support agribusiness activities.  Allow the banks to continue managing the assessment of loan risk, but use subsidies to change their calculations of risk and hence drastically reduce the rates they need to charge. 

National Strategies

A modern agriculture sector needs large volumes, consistent quality and competitive prices, and this comes from clear national strategies that give confidence and create incentives for farmers and businesses to invest.

Other institutional priorities that will really help in modernising agriculture include:

* Addressing inefficiencies in the import and export processes (the biggest improvements can come from improved procedures rather than facilities) 

* Addressing ongoing concerns with land title uncertainty. 

That’s plenty to work on!  We’ll write more in following blogs about some of these things.  Progress will be slow, but let’s set course in a good direction …

You can view the report here:

Modernizasaun Agrikultura

Foin dadauk Ekipa husi Universidade Monash lansa sira nia relatoriu konaba moderniza agrikultura -ita bele hetan nia kopia iha Ami sei hakerek diariu balu hodi explora idea balu iha relatoriu ne’e. ba dahuluk ida ne’e sei fornese informasaun jeral konaba temas prinsipal. Diariu sira tuir mai sei koalia detallus liu konaba rekomendasaun asaun espesifiku sira. Favor aproveita. 

Agrikultura nia importante! 

Maioria Timor oan sira ne’ebe ho idade adultu, servisu iha toos hanesan sira nia atividade prinsipal loro-loron no sai rekursu vida-moris ba sira nia familia (Sensus, 2015).  Investe iha agrikultura ida importante tebes ba ekonomia ne’ebe benefisia ba populasaun barak. Iha faktus balu ne’ebe ilustra iha ne’e mak: 

  • Liu husi 200,000 servisu-nain ho idade adultu (60%) depende ba agrikultura hanesan sira nia atividade ekonomia prinsipal, maioria husi sira ne’e sei aplika Sistema agrikultura tradisional. 

  • Besik 30,000 joven sira remata sira nia edukasaun kada tinan, no maioria husi sira sei buka hela servisu hodi halo.  

  • Laiha setor seluk ne’ebe bele kria kampu servisu sufisiente hodi halibur kresimentu ida ne’e. hanesan ezemplu, iha tinan 2017 politika turismo ne’ebe iha ambisaun boot hodi kria servisu ne’ebe relasiona ho turismo ba ema 15,000 iha tinan 2030 – maibe ida ne’e nafatin la sufisiente atu simu kresimentu servisu-nain maske ba iha tinan ida nian deit.

  • Setor oli no mina dalaruma diak ba rendimentu governu nian, no tanba ida ne’e kampu servisu ba governu, maibe ida ne’e produs kampu servisu. Hanesan ezemplu, sei menus husi 500 kontinua servisu ne’ebe propoin husi fasilidade iha LNG iha tasi mane.  

  • Iha parte Dili kresimentu lalais liu, area rural iha nasaun ida ne’e mos hatudu nia kresimentu populasaun. Projesaun hatudu katak iha tinan 20 mai, liu husi 50% populasaun iha Timor-Leste nafatin sei iha area rural. 

Dalan realistiku ba dezenvolvimentu ekonomia mak tenke inklui investimentu iha agrikultura. Maibe ita tenke hasoru realidade katak progresu lao neneik liu, no aprende husi lisaun – dalaruma ita presiza aprosimasaun foun.  Relatoriu ne’e foka liu ba saida mak involve iha etapa inisiu hodi hasoru setor agrikultura modernu. 

Realidade COVID 10 halo kazu agrikultura ba agrikultura sai importante tebes. Ida ne’e importante tebes ba nasaun atu iha seguransa ai-han, kontrolu diak liu tan ba sira nia produsaun rasik. 

Oinsa ida ne’ebe bele lao ho diak 

Iha elementus xave tolu iha atividade agrikultura: 

Insumu (agrikultor presiza asesu ba kualidade fini diak, no insumu seluk); 

Iha toos (Insumu sira ne’e presiza utiliza ho efisiente hodi hasae produtividade); 

Merkadu (Agrikultor sira presiza merkadu ba sira nia produsaun).

Presaun boot

Agrikultor sira iha Timor-Leste hasoru problema baziku ida, ne’ebe ho naran presaun boot: 

Agrikultor Timor-oan normalmente iha insumu ne’ebe ho kualidade ladiak, menus ekipamentu, no rekursu seluk, no iha difikuladade hodi asesu ba merkadu. Nia rezultadu mak, sira servisu maka’as, ho rezultadu produsaun ne’ebe menus no hetan rendimentu ne’ebe menus husi sira nia esforsu kompara ho agrikultor sira iha nasaun Asia.  Ida ne’e bele hatun sira nia hakarak ka vontade atu produs barak.  Ida ne’e mak presaun boot ba Agrikultor Timor-oan sira.  

Imajina bainhira husu ita atu servisu maka’as iha tempi difisil no oferese rendimentu ne’ebe kikoan ba ita nia servisu. Ita boot dalaruma halo saida mak ita tenke halo hodi agoenta moris, maibe ida ne’e lahatudu ita nia vontade atu hasae esforsu ka foti risku ba aprosimasaun foun. 

Agrikultor no Negosiante sira mormalmente iha ambisaun no iha hakarak atu susesu, no interese atu aprende no adopta pratika foun, importante mak sira bele haree nia benefisiu no jere nia risku. Problema mak, Presaun boot signifika laiha apoiu adisaun no insentivu, oportunidade atu atrai ba investimentu oitoan.

Insentivu Industria halo sira ne’e akontese 

Ba Industria Agrikultura iha Timor-Leste atu buras no moderniza, ami argumenta katak Governo presiza kria Insentivu industria ne’ebe enkoraja agrikultor no negosiante sira atu investe tempu no osan barak liu hodi haburas sira nia negosiu.  

Tipu insentivu ne’ebe diskusi ona iha relatoriu ida ne’e inklui kupon ba agrikultor sira konaba insumu, subsidiu ba inportasaun ka produsaun insumu, hadia maneira asesu ba kreditu, hanesan mos insentivu ba esportasaun no seguransa no taxa insentivu. Bainhira insentivu sira hanesan ne’e tau iha fatin ona, investor sira sai atrativu, no agrikultor ho negosiante sira sei foti oportunidade sira ne’ebe ne’ebe aprezenta ba sira. Ita sei haree idea sira ne’e diak liu iha diariu balu tuir mai. 

Agrikultura ka toos boot bele lidera  

Parte seluk husi insentivu ida ne’e, ne’ebe dezeñu ona atu suporta agrikultor no negosiante sira hotu, modernizasaun agrikultura sei presiza mos suporta Agrikultura boot ka Agrikultura nukleu sira ne’ebe foin mosu. Agrikultra sira ne’e sei fornese lideransa ne’ebe ho valor liu hodi asesu ba insumu, introdusaun teknolojia, kria kampu servisu, no hadia asesu merkadu, ne’ebe bele fo benefisiu barak ba agrikultor kiik sira. relatoriu ida ne’e propoin insentivu ba estebelesimentu no hamosu agrikultura/toos boot sira liu husi rezolve dezafius sira ne’ebe kritiku liu. Asesu ba rai ho seguru, iha parte seluk hadia aranjamentu konaba kreditu.

Kafe, Maek, Manu, Akuikultura no seluk tan 

Ita hotu hatene katak rendimentu/lukru seluk husi Oli no mina, kafe mak sai komoditi ida ne’ebe Timor-Leste Exporta ho kuantidade boot (Milliaun $20 iha tinan 2018). Iha tinan foin dadauk ne’e, maek hanesan exportasaun ida bot ba daruak nian (milliaun $2 iha tinan 2018). Iha setor kiik, ida ne’e merese atu haforsa tan, tanba ne’e ita rekomenda atu foka liu ba komoditi rua ne’e. 

Haree ba importasaun, iha komoditi balu ne’e Timor-Leste sei dependente los atu importa ho volume boot, no sei presiza kapasidade barak hodi produs iha rai laran – inklui foos, manu no mantolun, nune’e mos produsaun naan no ikan no seluk tan. Sira klaru katak demanda iha rai laran barak liu ba komoditi sira ne’e, tanba ne’e investe iha produsaun lokal ne’ebe bele kompete ho importasaun iha parte kualidade no presu sei ajuda hadia agrikultor sira nia rendimentu no seguransa ai-han rai laran. Ba future agrikultura iha Timor-Leste presiza halo espesializasaun ba area balu.  Ita esplora tan ba ai-horis seluk bainhira iha hatene ona nia merkadu, hodi ba exportasaun ka demanda rai laran ne’ebe mak sa’e. Kafe, Maek, manu, akikultura no seluk tan…..

Relatoriu ne’e halo investigasaun ba ai-horis espesifiku sira balu ho detallu liu, no propoin insentivu oi-oin hodi resolve dezafiu balu ne’ebe kritiku liu ne’ebe hanehan invetimentu iha ai-horis sira ne’e. idea ida ne’e simples: saida mak sai “dezafiu” ba kresimentu iha produsaun no merkadoria ba komoditi sira ne’e? normalmente iha pontu kritika balu iha kadeia fornesedor ne’ebe dezafia ba kresimentu. Bainhira sira ne’e identifika ona, planu bele dezenvolve hodi halo mudansa ba insetivu ba agrikultor no negosiante sira: hamenus kustu, hasae rendimentu, hamenus risku. 

Ikus liu, iha hanoin balu konaba reforma ekonomia ne’ebe luan hodi bele halo diferensia boot iha agrikultura….

Asesu ba Kreditu

Dezafiu boot ne’ebe negosiantes sira hasoru, partikularmente iha produsaun aninmal no akuikultura, ne’ebe ho fundus ba investimentu kapital. Dezafiu ida ne’e bele rezolve ho apoiu husi governu ba kreditu agronegosio. Ida bele atinji liu husi fornese subsidiu ho funan kiik no garante husi governu ba imprestimu/deve hodi suporta atividade agronegosio. Autoriza banku kontinua jere avaliasaun konaba risku husi deve, maibe uza subsidiu hodi troka sira nia kalkulasaun risku no hodi nune’e bele redus valor ne’ebe sira atu selu. 

Estratejia Nasional 

Setor agrikultura modernu presiza volume boot, konsistente ho kualidade no kompetente ho presu, no ida ne’e mai husi estratejia nasional ne’ebe klaru katak fo fiar no kria insentivu ba agrikultor no negosiante sira atu investe. 

Prioridade institutional seluk ne’ebe sei ajuda tebes iha modernizasaun agrikultura inklui: 

* Rezolve prosesu iha importasaun no exportasaun ne’ebe la efisiente (mudansa boot bele mai husi hadia prosedura kompara ho fasilidade sira). 

* Rezolve problema sira ne’ebe lao dadauk ho titlu nain ba rai ne’ebe la serteza/klaru. 

Ida ne’e sei iha servisu barak atu halo! Ami sei hakerek barak tan iha diariu sira tuir mai konaba sasan sira ne’e. progresu sei lao neneik, maibe mai ita prepara diresaun ne’ebe diak…. 

Ita bele lee peskiza iha: