RI agroindustry needs structural reform<\/p>\n
JAKARTA (JP): Indonesia needs to structurally reform its
\nagroindustry to improve its efficiency, a national conference was
\ntold yesterday.<\/p>\n
The head of the Board for the Development of Agroindustry,
\nKaman Nainggolan, said that reform was needed in investment
\nregulations and in monetary, marketing and manpower policies.<\/p>\n
Without reform, Indonesia could face difficulties in competing
\nwith foreign producers, both in the domestic and overseas
\nmarkets, he told a national conference of the association of
\nexperts in agroeconomy.<\/p>\n
He said that investment regulations remain complicated despite
\na series of deregulation measures in the last five years.<\/p>\n
In the monetary sector, the existing lending rates are also
\nstill too high, making the agroindustrial sector less attractive
\nthan other business fields, he said.<\/p>\n
\"It is, therefore, necessary for the government to introduce a
\nspecial interest rate for agriculture-based industries,\" he said,
\nciting that banks in several Asian countries offer lower lending
\nrates to agricultural companies.<\/p>\n
In Thailand, the lending rate for the agribusiness is set at
\nan average of four percent per annum, a bit lower than the
\napproximately six percent charged by Malaysian banks.<\/p>\n
Unlike in those two countries, Indonesian investors in the
\nagribusiness receive no special treatment from banks, which at
\npresent charge borrowers between 15 percent and 18 percent per
\nannum.<\/p>\n
\"The high lending rates make the return on investment ratio in
\nthe agricultural sector much lower than those of other business
\nfields,\" he said.<\/p>\n
Nainggolan said that poor marketing and a lack of skilled
\nworkers also hamper activities in the agroindustry.<\/p>\n
H.S. Dillon, another speaker at the two-day congress, which
\nwill end today, said the free trade pact implemented by the World
\nTrade Organization early this year would become a threat rather
\nthan an opportunity for Indonesia if it fails to modernize its
\nagroindustry.<\/p>\n
\"Indonesia's products will not be able to compete with those
\ncoming from other countries if their quality is not improved,\" he
\nsaid of the impact of the fiercer competition resulting from the
\nfull implementation of the free trade pact in the next 10 years.<\/p>\n
Dillon, an assistant of the minister of agriculture, shared
\nthe view on the need for reform in the agricultural sector to
\nenable Indonesia's farm products to compete in the era of trade
\nglobalization.(hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-agroindustry-needs-structural-reform-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}