Don't use land certificates as collateral

JAKARTA (JP): The government is appealing to land owners, particularly rice farmers, not to use their land certificates as collateral for bank loans because they could lose their most treasured possession.

"Think twice before you offer the land certificates as collateral. If you cannot repay the loan one day, the bank will auction your land and you lose possession," State Minister of Agrarian Affairs Soni Harsono was quoted as saying.

Soni said the government is particularly concerned that more and more people, farmers in particular, are mortgaging their land against loans, putting their livelihood at great risk, the Antara news agency reported in a dispatch from Surakarta in Central Java.

His comment came as more and more farmers are defaulting on their loans. There could be more problems on the way as many farmers in Java are reporting major crop failures because of the severe dry spell.

Soni also announced that the government is relaunching its program to issue land certificates en masse for farmers who are entitled to obtain them after tilling their plots for a long time. (emb)