Milk cooperatives ask for loan rescheduling<\/p>\n
JAKARTA (JP): The Federation of Indonesian Milk Cooperatives
\n(GKSI) plans to request a write-off or rescheduling of loans from
\ntwo creditor banks which provided funds for the purchase of dairy
\ncows.<\/p>\n
GKSI's general-secretary, Salim Al Bakry, told reporters here
\nyesterday the request was being made because many of the
\nborrowers have lost their cattle due to natural disasters.<\/p>\n
But he admitted that he was not sure how many cattle farmers
\nwere hit by natural disasters and were thus unable to service
\ntheir loans.<\/p>\n
Salim was speaking during a break at a hearing with members of
\nthe House of Representatives' Commission VII, which oversees
\ncooperative, financial and trade affairs.<\/p>\n
He said the distribution of credit to breeders was based more
\non notions of equality than economic considerations.<\/p>\n
Salim said that part of the credits given by the two banks --
\nBank Rakyat Indonesia (BRI) and Bank Bukopin -- should have
\nincluded a \"training fee\" to teach farmers how to manage their
\ncattle professionally.<\/p>\n
In the 1987\/1988 fiscal year, GKSI obtained Rp 19.4 billion
\n(US$8.43 million) in loans from Bukopin and in 1988\/1989 it
\nobtained Rp 22.6 billion from BRI, bringing its total credits to
\nRp 42 billion; all this money was used to buy dairy cows.<\/p>\n
From this total, around Rp 36.7 billion has not been repaid,
\nSalim said.<\/p>\n
During the 1987-1989 period, 27,410 live cows were shipped in
\nfrom New Zealand, America and Australia. The imported cattle was
\ndistributed to individual farmers through \"village cooperatives\"
\nand the larger \"primary cooperatives\", all of which are members
\nof GKSI.<\/p>\n
Salim said he was optimistic that Indonesia would be in a
\nfavorable position when the World Trade Organization regulations
\nfor the industry come into effect in 2005.<\/p>\n
Salim explained that milk prices on the international market
\nare currently increasing because the WTO does not allow
\nsubsidies. Subsidies, Salim said, would be an advantage to
\nIndonesian milk producers considering that milk costs more to
\nproduce than to import here.<\/p>\n
Local milk costs Rp 682 per liter, while imported milk
\naverages at Rp 550 per liter.<\/p>\n
Import<\/p>\n
Indonesian milk-processing companies are currently allowed to
\nimport the equivalent of 2.9 liters of fresh milk for every liter
\nof fresh milk they buy from domestic farmers.<\/p>\n
The import-ratio policy for milk products, which has been in
\neffect since 1982, is meant to guarantee the sale of fresh milk
\nproduced by domestic farms.<\/p>\n
This ratio is reviewed every six months based on negotiations
\nbetween milk-processing firms, the Federation of Indonesian Milk
\nCooperatives and the national coordinating team for milk
\ndistribution.<\/p>\n
GKSI Chairman Hardjono Hamidjojo said yesterday that
\nincreasing import ratios over the year were not caused by a
\ndecline in domestic milk production but were a result of a rise
\nin milk consumption.<\/p>\n
By the year 2000, consumption is expected to reach 9.7
\nkilograms per capita per year. Currently it is estimated at
\naround 6.4 kg per capita per year.<\/p>\n
Domestic production in 1996 is estimated to weigh in at 471.2
\ntons, up from around 346 tons in 1990. (pwn)<\/p>",
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