Agricultural production to remain strong next year

Rendi A. Witular, The Jakarta Post, Jakarta

Minister of Agriculture Bungaran Saragih said on Friday that the country's agricultural production would continue to grow at a "high" rate next year on the back of favorable climatic conditions and a higher budget to support farming activities.

Speaking at a year-end press conference, Bungaran predicted that the 2003 agricultural production would grow by at least 3.7 percent, roughly the same as this year's estimate.

He said that a growth of more than 3 percent in the agricultural sector was considered a "high growth" rate.

"We are optimistic that next year's growth will be at least the same as this year's level," he told the media.

He said that the 2003 state budget had allocated around Rp 2.3 trillion to support farming activities. In comparison, this year's budget was only around Rp 1.4 trillion.

The higher budget will be spent by the ministry to provide subsidies for fertilizers, open more farming areas outside Java, and to provide soft loans for farmers.

Bungaran said that the agriculture sector started to rebound this year after a heavy plunge in 2001 which saw output grow by only 0.63 percent.

He explained that despite the floods and droughts this year, agricultural production was robust, thanks partly to better coordination of policy at the provincial level.

He said that the plunge in production in 2001 was partly due to the poor implementation of the regional autonomy policy, which gives greater administrative power to regional governments in managing their economic affairs.

He added that another positive factor was the fact that more farmers were becoming increasingly independent of the government.

Meanwhile, agriculture analyst Pantjar Simatupang said that a high growth in agricultural production would benefit farmers in terms of higher income.

But he doubted the government's estimates for both this year and next year.

He said that if agricultural output had truly grown by 3.7 percent this year, it should have been reflected in better living conditions of farmers.

"But in reality we don't see this happening?" he asserted.

Pantjar questioned how the output growth in 2002 could reach 3.7 percent, while production only grew by 2.64 percent in 1996 when climatic conditions were much more favorable and the economy was in better shape.

"During 1996, the growth was fairly modest. So I'm surprised that the government claims this year's growth could reach 3.7 percent," he said.