Review of Indonesian Government Regulation Number 26/2021 on Implementation of Job Creation Law in the Agriculture Sector

Review of Indonesian Government Regulation Number 26/2021 on Implementation of Job Creation Law in the Agriculture Sector

Published: 2021.04.23
Accepted: 2021.04.22
7
Indonesian Center for Agriculture Socio Economic and Policy Studies
Senior Agricultural Economist and Research Professor
Indonesian Center for Agriculture Socio Economic and Policy Studies (ICASEPS), Ministry of Agriculture, Indonesia

ABSTRACT

The government of Indonesia has amended several implementing regulations in the Law Number 11/2020 on Job Creation. One of them is stipulated in the Government Regulation Number 26/2021 on the Implementation of Agriculture Sector. This Government Regulation amends the following Laws, namely: (1) Law Number 39/2014 on Estate Crops; (2) Law Number 29/2000 on Plant Variety Protection; (3) Law Number 22/2019 on Sustainable Agricultural Cultivation System; (4) Law Number 13/2010 on Horticulture; and (5) Law Number 41/2014 on Livestock and Animal Health. The amendment of Government Regulations in the agriculture sector is basically aimed at increasing agricultural employment and investments in the country. Therefore, the amendment contents of the agricultural government regulations should be implemented manageably to improve the current and future economy of Indonesia.

Keywords: regulation, job creation, agriculture, Indonesia

INTRODUCTION

Background

On 2 November 2020, the Government of Indonesia (GoI) ratified and promulgated Law Number 11/2020 on Job Creation (GoI, 2020). The Law is aimed at: (1) Absorbing Indonesian foreign workers as widely as possible in the midst of increasing competitiveness and the demands of economic globalization; (2) Adjusting various regulatory aspects towards enhancing the investment ecosystem and accelerating national strategic projects for improving the protection and welfare of workers: (3) Formulating the convenience, protection, and empowerment through accelerating national strategic projects are required in line with improving the protection and welfare of workers scattered in various sector regulations which are currently unable to meet the legal requirement for accelerating the job creation; and (4) Requiring the change of regulations related to improvement of investment ecosystem, stimulating national strategic projects with advanced protection and welfare of workers through amending the awkward sector regulations and synchronizing the breakthrough acceleration of legal work to which it can comprehensively resolve various problems in several regulations into single Law on Job Creation.    

The implementation of the Job Creation Law requires the Government and Presidential Regulations toward an impact on efforts to restore the national economy as well as become a momentum for the awakening of the Indonesian nation. With regard to this matter on 2 February 2021, the GoI stipulated and promulgated 49 Government Regulations and four Presidential Regulations for the implementation of the Law. Among others is Government Regulation Number 26/2021 on Implementation of Job Creation Law for Agriculture Sector in the country.

Objective

The article reviews Government Regulation Number 26/2021 on the Implementation of Job Creation Law in the Agriculture sector of Indonesia. It simply discusses the Job Creation Law and the implementation of the Government Regulation particularly in line with plantation, plant variety right, sustainable agricultural cultivation system, horticulture, as well as livestock and animal health.     

INDONESIAN JOB CREATION LAW

Essentially, the term of job creation in the Job Creation Law refers to generate work through facilitating, protecting, and empowering the improvement of investment ecosystem as well as ease of doing business and investment of government towards accelerating the national strategic projects. This Law is implemented based on the principles of equal rights, legal certainty, and ease of doing business, amity, and independence.

To support the implementation of strategic policies in the Job Creation Law, it is necessary to amend and improve certain regulations. Amendments to those regulations cannot be carried out through conventional ways of changing one by one of regulation, which is quite ineffective and inefficient as well as the fact that amendments take a long time to make.  One of amended regulations includes the agriculture sector as stated in the implementation of agriculture sector regulation.

IMPLEMENTATION OF JOB CREATION LAW IN THE AGRICULTURE SECTOR

There are five laws of agriculture that must be followed up in the Government Regulation Number 26/2021 on Implementation of the Agriculture sector, namely: (1) Law Number 39/2014 on Estate Crops; (2) Law Number 29/2000 on Plant Variety Protection; (3) Law Number 22/2019 on Sustainable Agricultural Cultivation System; (4) Law Number 13/2010 on Horticulture; and (5) Law Number 41/2014 on Livestock and Animal Health. The sustainable agricultural cultivation system is substantially related to food crops.

Estate Crops  

One of the estate crops management is aimed at managing and developing estate crops resources optimally, responsibly, and sustainably towards improving production, productivity, quality, added value, competitiveness, and market share (GoI, 2014). With regard to the content of Government Regulation Number 26/2021 for estate crops, the sub-sector is to regulate land use for estate crop businesses, facilitate the development of local community estate crops business, and develop farms for certain estate crops processing units and seeds. This change is intended to further improve welfare and prosperity of the people, increase the source of foreign exchange, provide employment and business opportunities, enhance production, productivity, quality, added value, competitiveness and market share, escalate and fulfill the requirements of domestic industrial consumption and raw materials, provide protection to estate crops business players and the community, manage and develop estate crop  resources in an optimal, responsible, and sustainable manner, as well as improve the utilization of estate crops services.

The land use for estate crops is classified based on maximum and minimum criteria applied to certain strategic commodities (Table 1). The determination of these criteria is based on type of plant and availability of suitable land area related to agro-climatic characteristics.

The company that has obtained a license to undertake cultivation of estate crops from other use areas outside the Cultivation Rights (HGU) originating from the release of forest areas, is obliged to facilitate the development of farms for neighboring communities that are joined in institutional organizations (farmer group, farmer group association, farmer economic institution, and cooperative), which is 20% of the total estate crops area cultivated by company. The development of local community farms is carried out no later than three years after the land for estate crops business is granted cultivation rights. The surrounding community obliges to cultivate and utilize the land complying with the provisions on the use and utilization of land in accordance with the nature and purpose of granting rights, and carry out cultivation activities in line with good cultivation practices. It can be implemented through credit scheme, profit sharing pattern, and other forms of funding agreed by the parties and/or other forms of partnerships. The pattern and form of farm development facilitation are contained in the cooperation agreement.

In relation to types of processing products and time periods, it is required that every certain product processing unit produce from imported raw materials – in this case, raw crystal sugar from sugar cane – to build a farm integrated with the processing unit no later than three years from the time of processing unit operated. The integrated sugarcane industry is based on its specific characteristics in one or separated overlay areas between farm and processing unit.   

Seed facility is in line with searching, collecting, utilizing, and preserving the genetic resources, seed breeding introductions[1], release of varieties, production, certification, labeling, as well as supervision of seed distribution. With regard to searching and collecting genetic resources, it can be carried out inside and/or outside habitat of estate crops. Genetic resource collection activities are conducted in genetic resource banks either through collection farm or cold storage. The utilization of genetic resources can be implemented individually or collectively in a sustainable manner through activities such as breeding, research and development, and/or maintenance of a bank of genetic resources. Preserving the genetic resources are organized by determining the location as the source of native Indonesian genetic diversity crops based on inside (in-situ) and outside (ex-situ) bank of genetic resources involving the community.

Seed breeding introductions are produced in the form of seeds or parent materials for plant breeding. The introduction must obtain the approval by submitting a request for introduction accompanied by a proposal containing at least the purpose and description of the introductory required material and its amount. The approval holder who has carried out the introduction is obliged to submit the written report and sample of seeds or parent material introduced.

Release of varieties consists of non-genetically modified organism (Non-GMO) and GMO[2] crops. Non-GMO crops can be categorized as pure, multiline, open-pollinated, composite, synthetic, clone, semi clone, biclone, multi clone, mutant, or hybrid strains. Meanwhile, GMO crops are identical to Non-GMO crops, except for pure strain category. The release of varieties can be carried out on local varieties that have advantages.

Estate crops seeds can be derived from superior seeds and/or local superior seeds based on selected parent trees and commercial or smallholder farms. These seeds can be produced, certified, labeled, and distributed, which are classified into Breeder Seeds, Foundation Seeds, Stock Seeds, and Extension Seeds[3]. To ensure the sustainable seed availability, the generative and vegetative propagations are carried out. The former is carried out for free-seed varieties, hybrids, and pure strains, while the latter is conducted by conventional methods and/or tissue culture.

Supervision of seed distribution is carried out by plant seed supervisor with time limit based on the validity period of label for each type of crops. It is generated by checking the document and seed quality as well as re-labeling. The re-labeling is reserved for orthodox seeds only. Supervision is organized in accordance with the provisions of business licensing regulations. 

Plant Variety Right

Plant Variety Right is a special intellectual property right provision set by the state, in which it is represented by the government and carried out by the office of plant variety rights towards plant varieties produced by plant breeders through breeding activities (GoI, 2000). Hence, the implementation of the Government Regulation Number 26/2021 is in line with regulating the process, applying, registering, checking, announcing, recording, and obtaining certificate of plant variety rights. This can be applied alone and/or transferred to another party to use plant variety commercially through an agreement of the rights. The plant variety rights can be provided to plant varieties resulting from breeding of new, unique, uniform, stable characteristics (Table 2), and given names and differentiated into seasonal and annual crops.

The application processes for plant variety rights can be prepared by breeders, individuals or business entities that employ breeders or those who order plant varieties from plant variety breeders, heirs, or consultants. The consultant must be registered at the office of plant variety rights and are obliged to maintain the confidentiality of the plant variety and all application documents until the date of plant variety right application is announced. Plant variety right application can only be submitted for single plant variety. The plant variety right applications that have fulfilled the requirements are announced by the office of plant variety rights for six months to offer the opportunity of public to examine the violations or objections regarding their applications.

In order to regulate the process of obtaining the plant variety rights certificate, the application must be registered, checked, announced, by the office of plant variety rights. This can be conducted alone or transferred to another party to use the plant variety in accordance with commercially based-agreement. The plant variety rights office officially announces in newsletter regarding the approval to grant in the form of plant variety rights certificate which is valid for a period of 20 years for seasonal crops and 25 years for perennial crops, starting from the date of issuance.

Sustainable Agricultural Cultivation System

Sustainable agricultural cultivation system is the management of living natural resources in producing agricultural commodities towards accomplishing better and sustainable human needs by preserving sustainability of the environment (GoI, 2019). One of the critical factors related to this system is the occurrence of land conversion in Indonesia. It is often blamed as an investment obstacle, so that the stipulated prohibition on the conversion of agricultural cultivation land is aimed at realizing and ensuring the availability of land in the country. The availability of land is intended for cultivation, realizing independent resilience and national food sovereignty, increasing the empowerment and welfare of farmers, providing certainty in farming, recognizing ecological balance, and preventing wasteful investments in agricultural infrastructure of Indonesia. Hence, the implementation of Government Regulation Number 26/2021 on Sustainable Agricultural Cultivation System is essentially related to prohibition, obligation, acquisition, location, replacement, function, compensation, investments, as well as cost and value of land conversions (Table 3).

Table 3. Requirement, assessment and plan, replacement, exemption, compensation of land conversions in Indonesia

Aspect

Explanation

Prohibition

Everyone is prohibited from converting land that has been designated as land for agricultural cultivation. In the case of public interest and/or national strategic projects, cultivated land can be converted and implemented in accordance with the provisions of regulation. The conversion of cultivated land for the public interest can only be carried out on the condition that a strategic study is carried out, compiled land conversion plan, freed ownership of rights from the owner, and provided replacement land for agricultural cultivation land.

Obligation

The conversion of cultivated land for public purposes and/or national strategic projects conducted on agricultural land that already has a complete irrigation network is obliged to maintain complete irrigation network function. It is underlined that agricultural cultivation land is the raw land for food crops. The conversion of land for cultivation in the context of land acquisition for the public interest is limited to the public interest which includes public road, reservoir, dam, irrigation, drinking water or clean water channels, drainage and sanitation, irrigation building, port, airport, railway station and road, terminal, public safety facility, natural preservation, as well as power plant and network.

Acquisition

The conversion of land for cultivation of agriculture in the context of land acquisition for national strategic projects is carried out in accordance with the provisions of law. Strategic study should be conducted at least covering the area and location of the converted land, potential yield and investment loss risks, economic, environmental, social and cultural impacts.

Location

The land conversion plan contains at least the area and location of the converted land, schedule of function transfer, area and location of replacement land, plan for providing replacement land, and substitute land use. The acquisition of ownership rights is carried out by providing compensation from the party that converts the land. The amount of compensation is carried out by the appraiser who is determined by the land agency in accordance with the provisions of regulation.

Replacement

The replacement of land must meet the land suitability criteria and be ready for planting. Land replacement can be obtained from new land clearing, conversion of land from non-agriculture to agricultural cultivation land, especially from abandoned land and/or formerly forest land areas, or the designation of agricultural food land as agricultural cultivation land. The determination of land replacement must consider the area, productivity level, and basic infrastructure conditions.

Function

Change of function of cultivated land in the context of land acquisition for public interest and/or national strategic projects is proposed by the party that will convert the land for agricultural cultivation to the government in accordance with the provisions of regulation.

Compensation

The conversion of agricultural cultivated land must be compensated by the converting party. In addition to compensation, the party who converted was obliged to replace the value of infrastructure investment in the converted agricultural cultivation land.

Investment

Replacement of investment value is earmarked for financing infrastructure development at the replacement land location. The value of infrastructure investment is based on the estimated value of infrastructure investment on the converted land that has been built and the required replacement land.

Assessment

The assessment of the value of infrastructure investment is carried out in an integrated manner by team formed by the Minister consisting of agencies in charge of agricultural infrastructure affairs.

Cost and value

The cost of compensation and the value of infrastructure investment as well as funding for the provision of replacement land derive from the state/provincial or regency/city revenue and expenditure budgets to the land conversion agency.

Source: GoI, 2021

Horticulture  

Among other objectives of the implementation of horticulture is to increase production, productivity, quality, added value, competitiveness, and market share (GoI, 2010). Government Regulation Number 26/2021 also regulates this sub-sector which has enormous economic potential to move the wheels of the economy, creating job and business opportunities as well as upstream-downstream linkages with other sectors in Indonesia. Therefore, it is necessary to particularly regulate seed business including breeding, seed production and certification, as well as distribution and product grade system of seeds based on quality and price standards.

Breeding is carried out to maintain and improve the purity of existing types of variety or to produce new variety types. New varieties resulting from breeding to be launched must be registered before they are distributed. Breeding can be produced by domestic or introduction which is carried out in the form of seeds or parent materials that have not yet existed in Indonesia.

The obligation provisions of registration are exempted for individual or group business players conducting domestic breeding for their own use and/or limited to one group in one regency/city area. An exception is imposed on the condition that individual or group business players report to the technical implementation unit of the regional institution which carries out tasks and functions in the supervision of horticulture variety registration with a copy to the local governor and minister; and new varieties are produced locally and circulated in a limited manner within one regency/city.

Domestic breeding can be carried out by the method of selection, cross/hybridization, mutation, chromosome multiplication, or genetic engineering technologies. The introduction must meet the statutory provisions of plant quarantine and the number of seeds introduced in accordance with the requirements which has a description of the variety. Introduction must obtain permission from the owner of the variety or its representative. Apart from that, it is obligatory to fulfill the business license from the central government which is issued in accordance with the statutory provisions. To ensure the availability of seed quality in a sustainable manner, the production is carried out through generative and vegetative propagations. Those are respectively conducted conventionally and tissue culture or hybrid extract.

Horticulture seed certification is carried out through supervision of: (1) Planting and postharvest (field inspection, testing of horticulture seed quality in the laboratory and/or inspection in the warehouses, issuance of horticulture seed certificates, and labeling); (2) Quality management system organized by the Quality System Certification Agency (LSSM) or government agencies accredited by the National Accreditation Committee (KAN) in accordance with the scope of the horticulture seedling sector; and (3) Testing the horticulture seed products, or assessment of the production process. The provisions regarding the certification of horticulture seeds are regulated in the Ministerial Regulation.

For the horticulture product trading business, it regulates the buying and selling processes between producer and trader, within traders, and between trader and consumer. Horticulture product trading business players must implement the product class system based on quality and price standards in transparent manner and the product class system is classified into super class, class A (class 1), and class B (class 2). The quality standards refer to general and specific product requirements in accordance with the Indonesian National Standard (SNI). Special requirements are required for determining product class.

If horticulture products are not stipulated in the Indonesian National Standard, the product class system is determined based on the minimum technical requirements. Provisions regarding the application of standardized product class system shall be regulated by Ministerial Regulation. Price standards for horticulture products as staple goods are regulated in accordance with statutory provisions.

Livestock and Animal Health

The management of livestock and animal health includes managing export and import of livestock, animal, and animal products, preventing animal and zoonotic diseases, strengthening veterinary authorities, requiring halal (permitted) for animal products, and enforcing violations against animal welfare adapted to the development and requirements of community (GoI, 2014). Based on this, the implementation of the Government Regulation Number 26/2021 in this sub-sector includes public grazing areas, minimum standards and technical requirements for feed, and veterinary medicine.

The provision and management of public grazing areas so far emphasizes the role of regional governments at regency/city(s) to determine which areas have the stock of land as a public grazing area. In the framework of increasing small-scale livestock cultivation, areas that have met the provisions of this government regulation can be designated as public grazing areas by the central government. The standard setting or minimum technical requirements and safety of feeds as well as good feed preparation methods are intended to fulfill the criteria for the production of feed to be commercially distributed in Indonesia.

The public  grazing areas can be in the form of one or more overlay lands in regency/city area that can be converted from the grazing, ex-mining, and production forest areas, or estate crop areas that are not cultivated in accordance with the provisions of statutory regulations. The function is to produce forage plants, places for natural mating, selection, castration, and artificial insemination services, and places for animal health as well as research and development of livestock and animal health.

The minimum standards of feeds contain at least the parameters of moisture, crude protein, fat, and fiber, as well as calcium, and phosphorus materials. The minimum technical and security standard requirements are implemented in accordance with the regulatory provision of business licensing. In terms of feed safety aspect, it regulates the prohibition on the use of feed mixed with certain hormones and/or feed additive antibiotics. Feed safety at least loading aflatoxin parameters.

The utilization of such feed in this government regulation is to control therapeutic and reproductive purposes using parenteral methods. Meanwhile, the exception of the use of antibiotics is only for therapeutic purposes based on the diagnostic prescription results of veterinarian. Feed must meet minimum technical requirements, feed safety, and good feed manufacturing practices. The good manufacturing practices of feed must meet minimum assessment requirements of location, building, personnel, sanitation and hygiene, feed ingredients and production, quality control, internal inspection, and handling of observations, complaints, as well as recalling circulated feed. Producing feed that meets the assessment requirements will provide a certificate of how to make good feed based on the provisions of the regulation on business licensing.

It is noted that everyone is prohibited from using and/or mixing certain hormones (natural and synthetic) and/or antibiotics (finished products, raw materials/semi-finished veterinary medicines) into the feed for the purpose of adding feed and promoting growth. The prohibition is carried out to prevent residues from being trapped in livestock, health problems in human consuming livestock products, the emergence of pathogenic microbial resistance causes hypersensitive, carcinogenic, mutagenic, and teratogenic effects in animal, human, and environment.

The prohibition of using hormones is excluded only for therapeutic and reproductive purposes employing parenteral method. Meanwhile, the prohibition on the use of antibiotics is excluded only for therapeutic purposes with prescription of veterinarian based on diagnostic results of animal disease that must be fulfilled clinical symptoms and anatomical or laboratory pathology includes histopathology, serology, and epizootiology.

The supply of veterinary medicines is particularly carried out through domestic production and import. Domestic production is carried out by own production, production with a license, or cooperation contract (toll manufacturing). The production must obtain manufacturing veterinary medicine business license and certification of Good Manufacturing Practices for Veterinary Medicine (CPOHB) in accordance with the scope of veterinary medicine. The license production is carried out between the licensor and the licensee according to the agreement. The licensor is required to possess good manufacturing practices certification or equivalent certification, certification of free sale in the country of origin, and certification of registration or equivalent documents in the country of origin for licensed veterinary preparations.

CONCLUSION AND RECOMMENDATIONS

The amendments of certain government regulations have consequences for re-setting them in line with the Law Number 11 of 2020 on Job Creation. One of its amendments is stipulated in the Government Regulation Number 26/2021 on the Implementation of the Agriculture Sector. 

The content of Government Regulation Number 26/2021 comprises estate crops, plant variety rights, sustainable agricultural cultivation system, horticulture, as well as livestock and animal health as an essential part of the agriculture sector in Indonesia. Estate crops include land use, development facility, farm, seed, and processing unit components. Plant variety rights comprise rights, as well as their application, registration, checking, announcement, recording, and certification processes. Sustainable agricultural cultivation system is substantially related to land conversion issue in the sub-sector of food crops. Horticulture is particularly in line with seed aspect. Moreover, livestock and animal health consist of grazing, feeds, and veterinary medicine requirements. 

Government Regulation Number 26/2021 should be implemented manageably to increase employment and investments, which consequently can improve the welfare of Indonesian people in the agriculture sector. This is because agriculture has a large contribution to the Indonesian economy and absorbs high labor, so that this government regulation would be able to achieve a positive effect on the agriculture sector in the country.

REFERENCES

GoI. 2000. Undang-Undang Nomor 29 Tahun 2000 tentang Perlindungan Varietas Tanaman (Law Number 29/2000 on Plant Variety Protection). Government of Indonesia. Jakarta.

GoI. 2010. Undang-Undang Nomor 13 Tahun 2010 tentang Hortikultura (Law Number 13/2010 on Horticulture). Government of Indonesia. Jakarta.

GoI. 2014. Undang-Undang Nomor 39 Tahun 2014 tentang Perkebunan (Law Number 39/2014 on Plantation). Government of Indonesia. Jakarta.

GoI. 2014. Undang-Undang Nomor 41 Tahun 2014 tentang Perubahan atas Undang-Undang Nomor 18 Tahun 2009 tentang Peternakan dan Kesehatan Hewan (Law Number 41/2014 on Amendments to Law Number 18 of 2009 on Livestock and Animal Health). Government of Indonesia. Jakarta.

GoI. 2019. Undang-Undang Nomor 22 Tahun 2019 tentang Sistem Budidaya Pertanian Berkelanjutan (Law Number 22/2019 on Sustainable Agricultural Cultivation System). Government of Indonesia. Jakarta.

GoI. 2020. Undang-Undang Nomor 11 Tahun 2020 tentang Cipta Kerja (Law Number 11/2020 on Job Creation. Government of Indonesia. Jakarta.

GoI. 2021. Peraturan Pemerintah Nomor 26 Tahun 2021 tentang Penyelenggaran Bidang Pertanian (Government Regulation Number 26/2021 on the Implementation of Agriculture sector). Government of Indonesia. Jakarta.


[1] It is the importation of seeds or parent material from abroad which has never existed in Indonesia.

[2] GMO is a living organism as parts and/or processed products which have a new genetic composition as a result of the application of modern biotechnology.

[3] Breeder Seed is an early generation of seed originating from the core seed produced by the variety assembly for propagation that meets quality standards or minimum technical requirements of this seed class. Foundation Seed is the first descendant of Breeder Seed that meets the quality standards or minimum technical requirements of this seed class. Stock Seed is the descendant of Foundation Seed that meets the quality standard or minimum technical requirements of this seed class. Extension Seed is a descendant of Stock, Foundation, or Breeder Seeds which fulfills the quality standard or minimum technical requirements for this seed class.

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