Promoting the manufacture and use of small-scale agricultural machinery in Indonesia

Although it is too early to draw firm conclusions as to the program's direct socioeconomic benefits, the feasibility of substituting less costly and more easily maintained and repaired Indonesian-made farm machinery for imported machinery has been established. The technology being transferred under the IRRI-GOI program is easily adopted by small manufacturers because it requires little capital or equipment and relies on skills already present in many rural workshops. While firms varying in size and market orientation have participated in the program, sustained commitment is found only among smaller fabricators directly linked to farmers; IRRI-type equipment now represents an important part of the livelihood of these entrepreneurs. Program efforts have also successfully turned around GOI policy toward locally manufactured farm equipment; import bans have been imposed and credit made more available to both manufacturers and buyers of small farm equipment. Indigenous manufacture has already spread spontaneously beyond target areas, and it appears that the program is replicable in other Indonesian provinces, or, with some modifications, in other countries with a suitable policy environment and sufficient sophistication in metal fabrication. Replication with respect to nonagricultural manufacturing, however, is less likely to be successful - only in agricultural manufacturing is fabrication so closely linked to service and so dependent on local adaptation of design. Also, the fact that much of the program's success is due to the enormous dedication and enthusiasm of the IRRI project officer and his Indonesian counterparts creates further doubts about replication on a broader scale. Lessons learned are: the overall business environment for fabricators must be favorable; developing country commitment to a clearly articulated policy and program for farm mechanization must exist; and coordination among and within the principal involved ministries is essential.