State-owned Bank Rakyat Indonesia (BRI) will extend some Rp 2 trillion (US$219 million) in loans to farmers to help turn Sulawesi Island into a center of corn production, National Corn Council chairman Fadel Muhammad said Thursday.
Fadel said the loans would start to be disbursed this year during the planting season, with regional administrations in Sulawesi providing guarantees to enable local farmers to secure the loans.
"The funds will be used to promote the efforts to make Sulawesi the country's main center for corn production," said Fadel, who is also the governor of Gorontalo Province in Sulawesi.
Vice President Jusuf Kalla has agreed to promote Sulawesi as a center for the production of corn on account of the availability of abundant land and labor there. The relevant ministers will be ordered to set aside land and provide the necessary infrastructure to support increased corn cultivation.
Last year, the country produced 11.4 million tons of corn and imported around 400,000 tons. Demand for corn is expected to grow by at least 10 percent this year, with a total demand of about 21.17 million tons forecast for 2010.
At present, Sulawesi only produces 1.1 million tons of corn annually.
Compared to other areas in Indonesia, Sulawesi is well suited to the growing of corn as the island has 2.7 million hectares of potential agricultural land lying idle.
Fadel, a former businessman, estimated that an investment of about Rp 3.5 trillion would be needed to rapidly expand the corn acreage in Sulawesi up to 2007, and another Rp 1.5 trillion up to 2010. Funding was also required for the development of the necessary infrastructure.
The Agriculture Ministry is targeting national self-sufficiency in corn by 2008.
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