Doubts raised over RI's agricultural liberalization<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Poor farm productivity and a flood of imported agricultural
\ngoods call into question Indonesia's low tariff policy just as
\nthe country has agreed to join China, Japan and India in free
\ntrade pacts, according to a World Bank discussion panel.<\/p>\n
Indonesia has liberalized its agricultural sector while most
\nother countries are maintaining high trade barriers, participants
\nin Thursday's discussion said.<\/p>\n
\"Tariffs are really low, I have not seen anything like that in
\nany other country,\" World Bank economist Mona Haddad said during
\na workshop on trade organized by the World Bank.<\/p>\n
She said that aside from Malaysia, Indonesia owned among the
\nlowest and most simple tariff rates, and yet its agricultural
\ngoods faced a bulwark of trade barriers protecting markets in
\nboth developing and developed countries.<\/p>\n
Haddad said the situation was unfair but added that \"if we
\nwere to raise tariffs, what makes sense to Indonesia is to ask
\nwhat would increase (farm) productivity rather than to merely
\nreact to this unfairness\".<\/p>\n
On top of unfavorable trade conditions, farmers' inability to
\nincrease their productivity to match a fast growing population
\nhas forced Indonesia to turn to overseas producers to meet its
\nfood demands.<\/p>\n
Indonesia has seen a steady flow of rice imports drag rice
\nprices down, which has become a disincentive for paddy farmers to
\nplant rice. But the more paddy farmers who shift to other crops
\nwill widen the supply-demand gap, increasing the need for more
\nrice imports.<\/p>\n
In 10 years rice imports increased by more than tenfold to 5.8
\nmillion tons in 1998, making Indonesia one of the world's biggest
\nrice importers.<\/p>\n
The supply gap in sugar is even more stark, with annual
\nconsumption at about 3.3 million tons, exceeding output by 1.6
\nmillion tons.<\/p>\n
A stream of cheaper imported sugar, however, has brought a
\nnumber of local sugar mills to the brink of collapse.<\/p>\n
\"How the increase in trade liberalization has not raised
\nproductivity, we don't know yet,\" Haddad added.<\/p>\n
Doubts over Indonesia's liberalized agricultural sector come
\non the heels of three agreements creating free trade areas
\nbetween ASEAN markets and China, Japan and India.<\/p>\n
But to what extent these deals will tear down agricultural
\ntrade barriers remains uncertain, considering the issue is being
\nheavily debated in talks at the World Trade Organization (WTO).<\/p>\n
Developing countries charge their developed counterparts with
\nfoot dragging. Rather than lowering tariffs, developed countries
\ncontinue to subsidize their farmers to penetrate developing
\nmarkets with cheaper products.<\/p>\n
At the same time trade barriers in the form of high and
\ncomplex import tariff rates and health and environmental
\nstandards block agricultural products from developing countries
\nentering developed countries.<\/p>\n
Indonesia's agricultural sector generates about 18 percent of
\nthe country's gross domestic product (GDP), which measures the
\ntotal value of goods and services a country produces every year.<\/p>\n
And about half of Indonesia's total labor force works in the
\nagricultural sector, according to Haddad.<\/p>\n
Bayu Krisnamurthi of the Bogor University of Agriculture said
\nthat although Indonesia's present liberalized agricultural sector
\nwas hurting farmers, increasing tariffs might not necessarily be
\nthe right answer.<\/p>\n
\"The question we must ask is on whose side are we, the
\nconsumers or the producers?\" he told participants.<\/p>\n
Underpinning the low import tariff policy was the need for
\nfood security, he said, explaining that the country's political
\nelite did not want to risk social unrest sparked by food
\nshortages.<\/p>\n
He added that much of the problems plaguing the agricultural
\nsector were compounded by domestic inefficiencies.<\/p>\n
According to him, the government should raise import tariffs
\ntemporarily to allow the local agricultural sector to restructure
\nitself.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/doubts-raised-over-ris-agricultural-liberalization-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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