Sugar policy in place until 2007: Mari<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government will maintain the sugar policy of the previous
\nadministration until 2007, despite criticism the policy is
\nresponsible for the rampant smuggling of the commodity.<\/p>\n
Minister of Trade Mari E Pangestu said on Thursday that rather
\nthan putting together a stopgap policy to provide short-term
\nsolutions for current problems in the sugar industry, she would
\nrather work on a comprehensive policy that would establish
\nmedium-term direction for the industry.<\/p>\n
She said she was gathering input from various parties on the
\npolicy, which is expected to be issued in 2007.<\/p>\n
"We will make a comprehensive medium-term policy that will be
\nable to accommodate the interests of producers, growers, industry
\nand the public," Mari was quoted by Antara as saying after a
\nmeeting with Japan's Minister of Economy, Trade and Industry
\nShozo Nakagawa.<\/p>\n
According to existing regulations, issued by former minister
\nof industry and trade Rini MS Soewandi, only five companies are
\nallowed to import sugar: state-owned plantation firms PPTN IX,
\nPTPN X and PTPN XI, and state-owned trading firms PT Rajawali
\nNusantara Indonesia and PT Perusahaan Perdagangan Indonesia.<\/p>\n
The policy was meant to protect local sugar growers from a
\nmassive inflow of cheaper imported sugar.<\/p>\n
Indonesia, which at one time during the Dutch colonial era was
\nthe world's largest sugar exporter, is now among the world's
\nlargest sugar importers. In 2002, Indonesia produced 1.8 million
\ntons of sugar, while demand reached 3.2 million tons.<\/p>\n
Domestic sugar production has declined over the past several
\ndecades due to the failure to upgrade sugar factories and
\nsugarcane plantations. Inefficient factories and the declining
\nproductivity of sugarcare plantations are blamed for the higher
\nprice of local sugar compared to imported sugar.<\/p>\n
The limitations placed on sugar imports have led to rampant
\nsmuggling of the commodity.<\/p>\n
Several parties have urged a review of the country's sugar
\npolicy, including the Business Competition Supervisory
\nCommission, which believes the policy creates unfair competition
\nand could lead to the formation of a cartel.<\/p>\n
The administration of president Megawati Soekarnoputri
\nintroduced in September 2003 a program to improve the nation's
\nsugarcane plantations.<\/p>\n
Under the program, Megawati's administration planned to
\nprovide Rp 68 billion in grants and Rp 1 trillion in soft loans
\nper year until 2005 to help sugarcane growers plant their fields
\nwith new high-yield seeds.<\/p>\n
"With that money, growers can replace their old sugarcane with
\nnew high-quality seeds to increase output. We hope this program
\nwill help Indonesia become a sugar exporter by 2007," said then
\nminister of Agriculture Bungaran Saragih.<\/p>\n
However, some industry players and analysts argued that the
\nmain problem in the sugar industry was the old machinery still
\nbeing used in sugar mills and the mills' inefficient labor force.<\/p>\n
However, Bungaran claimed the government did not have enough
\nmoney to spend on both seeds and machinery at sugar mills.<\/p>\n
"There are over 56 sugar factories in Indonesia. We would need
\na large amount of money to upgrade them. We can't do it now, but
\nmaybe in the next two or three years we can. So we have to
\nprioritize sugarcane seeds," said Bungaran.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sugar-policy-in-place-until-2007-mari-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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