Corn self-sufficiency may cost US$81.89m

Corn self-sufficiency may cost US$81.89m

JAKARTA (JP): The government's target of reaching national
self-sufficiency in corn will require the intensive development
of 456,150 hectares of hybrid-corn fields, costing Rp 188.34
billion (US$81.89 million) in farmers' credit funds.

According to a report issued yesterday by the Ministry of
agriculture, the government also plans to develop 50,000 hectares
of composite-corn fields, costing Rp 3.37 billion in funds
allocated by banks and state-owned firms for small-scale
businesses.

The report said that corn has become an increasingly important
commodity in the last few years, both as a foodstuff and as a raw
material for poultry feed.

Demand for corn has increased sharply from 1.28 million tons
in 1990 to an expected 3.51 million tons for this year.

The report estimated that the demand will further increase to
3.81 million tons in 1997 and 4.08 million tons in 1998.

To offset shortages in domestic production, Indonesia has had
to import large amounts of the crop. The figure has risen sharply
from 1.12 million tons in 1994 to 1.3 million tons in 1995.

"The imports have not only reduced the country's earnings...
they may also have an impact on the country's food security and
economic stability," the report said.

Corn prices on the international market have continued to
increase from $109 per ton in 1990 to $169 this year.

The government's intensification plan for corn was planned in
the 1995/1996 fiscal year in an effort to cut back on the huge
imports.

However, the report said, the planned one million hectares of
hybrid-corn fields in 11 provinces failed to contribute
significantly to the country's corn production.

"The government, for the 1996/1997 fiscal year, plans to open
up another one million hectares of hybrid-corn fields in 13
provinces... But to make this project succeed by at least 75
percent, extra efforts must be made," the report read.

The government is also likely to impose a floor price on corn
to keep prices up during harvesting periods (January-April) and
encourage farmers to continue planting corn.

Up to 1990, the government set the corn floor price at Rp 155
per kilogram, while the National Logistics Agency bought corn
from village cooperatives at Rp 165 per kg. (pwn)