The rural economy is pre-eminent in East Timor, and must necessarily underpin future economic advances there. This chapter examines that economy, looking especially at the possibilities for technical improvement and ways to implement changes so as to enhance economic growth and social welfare. It also makes recommendations on government policies that would promote these goals.

BACKGROUND CONDITIONS

East Timor's dry but variable climate, mountainous topography, soils and modes of agricultural activity in East Timor are discussed by Fox in Chapter 10. The physical conditions of the territory are difficult, but usually well managed by an adaptable and resilient people living in scattered villages and with generally plentiful land. These people have evolved modes of living and farming suited to their circumstances, but still have problems of food security owing to the unpredictability of the climate. Such problems were exacerbated by the destruction accompanying the Indonesian withdrawal in late 1999.

Agriculture

Data on East Timorese agriculture in 1970-95 are presented in Table 7.1. While approximate, they help to denote the underlying capacity of the sector using existing technologies. The data indicate increases up to 1995 in area under cul-tivation, exports of coffee and numbers of cattle and pigs, but declines in land planted with coconut and rice. Exports of copra fell, mainly due to rising local consumption, while rice imports grew strongly owing to the inability of local production to keep up with rising demand.

While maize, cassava and sweet potatoes were grown largely for home consumption, rice produced good returns for growers. Coffee, copra, some root crops and vegetables, live fattened cattle, pigs, goats and chickens were all significant earners of cash for certain groups of farmers in particular locations. Returns from these items supplemented the basically subsistence livelihood of farm households, bringing in revenue that could be used to buy consumer items and production inputs. However, the Indonesian forces as they left in 1999 killed many livestock, whose numbers will take long to recover.