Improving Agricultural Market Performance:
Developing Agricultural Market Information Systems
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6.3 PROMOTING WRS AND TRADING OF COMMODITY FUTURES IN
INDONESIA
As part of efforts to promote structured trading systems for agricultural commodities, the
Government of Indonesia launched a WRS in 2014, initially for products such as rice, maize,
coffee and seaweed. This legal framework underpinning the WRS centres around Law No.
9/2009 and Law No. 9/2011.353 (COMCEC, 2017). These laws, among others, stipulate the
minimum statutory requirements for licensing the produce stated above under the WRS. The
framework also sets out the rights of holders of warehouse receipts issued under the system as
well as the official regulator of the WRS, which is the Indonesian Commodity Futures Trading
Regulatory Agency (COFTRA). The regulatory agency, COFTRA, operates under the supervision
of the Ministry of Trade and its mandate includes overseeing the operations of licensed
warehouses. COFTRA regulates the country’s commodity futures trading market. It also
regulates the operations of auction markets for agricultural produce in the market.The WRS and formal markets – the auction and futures markets – are recent and emerging. The
progress made includes licensing of a total of 165 warehouses, including 44 private-owned
warehouses, which are strategically located across the country. The commodity coverage has
been extended beyond the initial list and includes a number of export crops such as rubber,
cocoa, and pepper as well as coffee which was in the original list. The auction markets regulated
by COFTRA across Indonesia was 14 in 2017 (COMCEC, ibid.). These auction markets bring
together buyers and sellers of agricultural commodities to determine commodity prices through
physical settlement. It is anticipated that as the market institutions discussed in this subsection
mature, they will impact positively on the collection and dissemination of price data as well as
stock information in Indonesia.
6.4 ASSESSMENT OF EXISTING MIS IN INDONESIA Studies undertaken in the 1990s concluded that the MIS in Indonesia provides a valuable
service, most notably to farmers and was also sustainable (Shepherd, 1997). Rather few
assessments of the system have, however, been carried out in recent times. From this review, it
is evident that the MIS in Indonesia is quite elaborate. It operates within a legislative framework
with clearly defined roles for various government agencies. The defined roles are
complementary and well-coordinated to assure the quality of information published by BPS.Funding for the MIS is assured through government budgetary provisions to the Ministries of
Agriculture and Trade. These government agencies are therefore able to deploy their staff at
district and provincial levels to collect and transmit data using modern ICT to speed up the
process. The staff involved are incentivised to undertake the collection of data in addition to
their core functions, which for example includes the provision of extension advisory services to
farmers. The staff at CADIS, who are responsible for collating, analysing and disseminating
market information only spend 25% of their time doing this as they have other responsibilities.
This structure makes it possible for the government to fund this activity on a sustained basis,
though donor support (e.g. from the Government of Germany) is leveraged for the production of
the WFP Food Security Monitoring Bulletin.It is evident that one of the main reasons for public investment in MIS is to enhance government
capacity to respond to food security emergencies in the country. An important feature of the