$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)