Agriculture sector to grow by 2% next year

The Jakarta Post Jakarta

The country's agriculture sector is expected to grow by 2 percent in 2004, up from than this year's estimate of 1.9 percent, mainly due to an increase in farmer's productivity, Minister of Agriculture Bungaran Saragih said on Monday.

"To meet the target, the agriculture sector will need new investment of up to Rp 45 trillion (US$5.23 billion) next year," Bungaran said during a meeting with House Commission III on agriculture and forestry affairs.

Figures from the ministry submitted to the House showed that the country's unhusked rice output was expected to grow by 3.1 percent to 53 million tons in 2004, from this year's target of 51 million tons.

The ministry also predicted that soybean output would reach 11.7 million tons in 2004, from this year's target of 9.6 million tons.

Bungaran said that part of the needed investment would come from the government, while the remainder would come from the private sector.

He said that the state budget was expected to provide some Rp 3.65 trillion, with another Rp 900 billion to come from foreign loans. This means the total budget for the ministry would rise by 47 percent to Rp 4.5 trillion from this year's 3.65 trillion.

"The money will be used to develop the agribusiness sector and improve the food security program," he said.

Bungaran also said it was crucial for the government to continue the current subsidy policy that focuses on fertilizer and seeds to help boost the country's agriculture output.

In 2003, the government allocated some Rp 1.32 trillion to subsidize fertilizer, Rp 30 billion for paddy seeds and Rp 10 billion for soybean seeds.

"We still need to subsidize our farmers," Bungaran said.