156 firms interested in developing plantations

JAKARTA (JP): The government has as of December received 156 applications from companies for licenses to open plantations in 18 provinces, mostly in East Kalimantan and North Sumatra.

Data from the Directorate General of Plantations showed that the applications were made based on the Decree of the Minister of Forestry and Plantations No. 107 in March 1999, which sets limits on the acreage to be developed as plantations by investors.

The ruling stipulates that acreage developed by a company in one province is limited to 20,000 hectares, except for sugarcane estates, which can cover up to 60,000 hectares. The decree also rules that a company can, however, develop up to 100,000 hectares throughout the country.

Antara quoted the directorate general as stating that only 41 of the applications fulfilled the requirements, and out of this number, 21 were issued licenses.

Based on the decree, plantations can be developed under five models of ventures.

Under the first model, smallholders set up a cooperative to develop plantations under a management contract with a third party and with loan financing from banks.

The second and third models feature joint ventures between cooperatives and investors with different structures of shareholdings.

Under the fourth model, private investors develop plantations and their processing unit and transfer them to cooperatives under a build-operate-transfer arrangement.

Under the fifth model, the government develops plantations and transfers them to smallholders under long-term loan programs.

Most of the 156 applications for plantation licenses chose joint ventures between cooperatives and investors as the preferred model for their plantation development. (03)