Bungaran aims to boost sugar output

Adianto P. Simamora, The Jakarta Post, Jakarta

Minister of Agriculture Bungaran Saragih unveiled on Wednesday plans to boost domestic sugar production in what may seem to be part of his strategy to win support for a proposal to increase import tariffs on the commodity.

Speaking on the sidelines of an industry gathering organized by the French Embassy here, Bungaran said that his office would initiate measures to boost the productivity of local sugarcane farmers so that output this year could increase to 1.9 million tons, compared with 1.7 million tons last year.

It is projected that sugar output in 2007 could jump to 3 million tons, equal to the current domestic consumption level.

Part of the productivity-boosting plan, Bungaran said, was to introduce high-quality seeds to local farmers.

"We will step up efforts to boost local productivity by providing new premier seeds for sugarcane farmers," he said.

Bungaran explained that productivity in the main Java sugarcane plantation areas was only about four tons to five tons per hectare, compared with eight tons in Sumatra.

He said that his office was planning to rehabilitate some 70,000 hectares of sugarcane plantation every year and replant with premier sugarcane seeds so they could produce a higher yield.

"We are planning to rehabilitate those unproductive and low- yield plantations, particularly Java plantations, beginning in 2003, to meet a target of three million tons in 2007," Bungaran said.

Sugarcane plantations currently cover some 350,000 hectares of land in Indonesia.

Bungaran said that to make the plan effective, sugar prices in the domestic market had to be increased so that farmers would have sufficient incentive to plant sugarcane.

"We'll also help push up sugar prices on the domestic market to encourage local sugarcane farmers to plant more crops," he said.

He added that to protect local farmers from cheaper imported sugar products, the import tariff on the commodity also had to be increased.

"Indonesia is a country with one of the lowest import duties on sugar," he said.

Indonesia, one of the largest sugar-importing countries, currently applies a 20 percent import tariff on white sugar and a 25 percent tariff on raw sugar.

The European countries impose a 240 percent import duty on the commodity, and the United States 150 percent. Neighboring countries, Thailand and the Philippines, impose an import duty of 95 percent to 100 percent.

Indonesia imported around 2.1 million tons of sugar in 1999 and 1.2 million tons in 2000, mainly from Thailand.

Bungaran has been campaigning for a hike in the import duty of sugar, amid pressure from farmers, but other economic ministers, particularly Minister of Industry and Trade Rini Soewandi, was reportedly against the plan, arguing that a high import tariff would boost the price of the commodity here and hurt end-users, including food processors.

Minister of Finance Boediono is expected to decide soon on the proposal for an increase in the sugar import tariff.

The Indonesian Sugar Association has demanded that the import tariff be increased to at least 65 percent, while sugarcane farmers were demanding a much higher figure, of around 110 percent.