JAKARTA, INDONESIA — Despite the government’s plan to increase soybean production, Indonesia’s projections for the 2021-22 marketing year are down compared to last year, according to a report from the Foreign Agricultural Service of the US Department of Agriculture (USDA).

Production is estimated at 425,000 tonnes, down from 475,000 tonnes in 2020-21. Planted area is reduced as farmers’ prefer more lucrative crops like corn and rice, the USDA said, adding that there is continued land conversion in key growing regions.

The Ministry of Agriculture (MOA) had planned to increase soybean production by 500,000 tonnes between July and September 2021. The plan proposes new planting area of up to 325,000 hectares across six provinces.

“Funding to support the initiative was proposed from various sources, including the national budget, loan programs, and private investment, but it’s unclear what if any funding has been secured,” the USDA said.

The plan likely will face challenges from farmers who can make more income from paddy and corn. In addition, the lack of high yielding varieties and new land for expanding area present barriers to production increases, the USDA said.

“Perhaps the most significant challenge to increasing soybean production are policies that incentivize corn and paddy production,” the USDA said. “Most food crop farmers on Java island (the primary growing area for soybeans) rotate their crops between paddy, corn and legume crops. Government supports for food crops favor production of paddy and corn through various support structures ranging from fertilizer, seeds, improved infrastructure, and minimum farm gate prices.”

Demand for local rice and corn is also stronger than for soybeans.

The USDA expects soybean imports to reach 2.8 million tonnes in 2021-22, an increase of 100,000 tonnes from 2020-21, on increased demand from the tempeh and tofu industry, which is expected to recover alongside the larger foodservice sector as travel and social distancing restrictions are lifted.