REPUBLIKA.CO.ID, BOGOR -- Indonesia must have an agricultural development model that responds to global economic changes and developments, so that agriculture can contribute in overcoming various global problems, stated President Susilo Bambang Yudhoyono.

"This problem must be put in the current context where Indonesia is adopting a decentralization system with its high economic growth. An agricultural development model will decide the direction and history of the nation in the future," the President announced at the anniversary of the Bogor-based Institute of Agriculture (IPB), here on Friday evening.

Yudhoyono pointed out the need for at least three agricultural development models.

The first model is an economic development strategy, which offers ample opportunities for the market economy to decide the direction of development.

In this case, the government should play a role in creating a market that can function efficiently and effectively. However, this model is not able to create equitable economic development. It often fails to create justice, among other things, because the underprivileged are often left behind by the fast economic growth.

"The second model is an economic development strategy that highlights the importance of the government's involvement in development. The government has to be involved from the beginning, right from charting out the strategic plans to their implementation. The agricultural development model is the realization of a concept for a centralized authority on economic issues," the president explained.

And the third model is an economic development strategy, which basically incorporates the principles of the first and second strategies mentioned above.

The government should intervene by involving other sectors such as the private sector, state-owned enterprises (SOE), and cooperatives.

This development strategy should be implemented with the awareness about the likelihood of market failure hence the government's role remains vital. However, absolute and excessive intervention will also produce, what is termed government failure, he stated.

"I believe that Indonesia should adopt the third strategy as earlier pointed out. In various occasions during my government tenure for almost nine years, I have always put forward the vision, policies, and strategies of this middle way of economic development, namely, The Third Way, including development in the agricultural sector," the president added.

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