$55.4b targeted for agricultural funding

$55.4b targeted for agricultural funding

JAKARTA (JP): The government has set an investment target of
Rp 125.2 trillion (US$55.4 billion) for the agricultural sector
during the sixth Five-Year Development Plan period, which ends in
1999, in order to achieve an annual growth rate in the sector of
3.4 percent.

Yesterday, Minister of Agriculture Sjarifudin Baharsjah told a
hearing with the House of Representatives' Commission IV, which
oversees agricultural and forestry affairs, that most of the
funds are expected to come from the private sector.

He said that extensive development was still required in the
fertilizer, seed, horticulture, cattle-feed and fishery
industries.

"There is also a high demand for modern farming equipment --
both for plant cultivation and post-harvest processes," he said.

Sjarifudin said he planned to ask the minister of finance to
review the levies on rice threshers, which are currently subject
to a luxury tax on top of the 10-percent value-added tax.

"Maybe they are subject to luxury tax because they look
sophisticated," the minister speculated.

Rice threshers could reduce the losses involved in the
traditional method of rice-threshing from about 15 percent to
only 3 percent, he said.

However, the threshing machines are not affordable to farmers
because of the levies. The threshers currently sell for
approximately Rp 60 million each.

Sjarifudin said his office also plans to promote the expansion
of agricultural activities in Sulawesi, Kalimantan and Irian
Jaya.

In 1992, land with agricultural potential which had not been
converted to farm land totaled 2.54 million hectares in Sumatra,
3.08 million ha in Kalimantan and 1.11 million ha in Sulawesi,
making for a total of some 7.7 million ha for Indonesia as a
whole.

Exports

Sjarifudin said the volume of exports of processed
agricultural products had grown by 6.9 percent per annum during
the fifth five-year plan period (1989-1994), while the volume of
exports had increased by an annual 8.7 percent.

Fruit exports increased by an average of 53.3 percent annually
during the 1989-1994 period, while exports of horticultural
products rose by 12.7 percent per annum.

Sjarifudin said that in the field of animal husbandry,
conventional products -- such as cattle hide, horns, nails and
beaks -- have become less popular. Commodities for which demand
has risen include pork, day-old chicks, eggs, beef, mutton, milk,
cheese and butter, he said.

The proportion of conventional products among animal husbandry
exports decreased from 99.1 percent, in 1987, to 63.5 percent in
1994, Sjarifudin said.

He added that exports of plantation commodities had risen by
an annual 9.3 percent, from 3.93 million tons worth $2.49
billion, in 1989, to 6.19 million tons worth $4 billion, in 1994.
(pwn)