Experts hail new tariff plan for agriculture products

Experts hail new tariff plan for agriculture products

Adianto P. Simamora, The Jakarta Post, Jakarta

Experts welcomed the government's plan to raise import tariffs on
agriculture products saying such a move would help protect local
farmers against cheaper imported products.

"I am very happy with the plan. The government finally wants
to raise import tariffs," said HS Dillon, executive director at
the Center for Agriculture Policy Studies (CAPS) told The Jakarta
Post on Tuesday.

Minister of Agriculture Bungaran Saragih was quoted by Kompas
daily on Tuesday as saying that President Megawati Soekarnoputri
had approved plans to immediately raise import tariffs on
agricultural and food products.

Bungaran was talking from Rome, where he and Megawati were
attending the international food conference.

He said that the country currently had low import tariffs,
while other countries were providing subsidies to protect their
farmers.

Indonesia currently sets a 30 percent tariff for rice and
between 20 percent and 25 percent for sugar, while there are no
tariffs for soybeans and corn.

For years, farmers' organizations have demanded the government
hike import tariffs on certain agricultural products particularly
rice, sugar and soybeans to help local products in competing with
imports.

But the International Monetary Fund (IMF) had opposed such a
plan. The IMF has been championing a free market policy.

Pantjar Simatupang, an agriculture expert at the Center for
Social and Economic Research, also hailed the higher tariff plan.

He also said that wealthy nations had been applying a
protectionist policy in their agriculture sectors by providing
subsidies.

He added that imposing higher import tariffs on agriculture
products was not against the ruling of the World Trade
Organization.

Pantjar, however, urged the government to set a clear criteria
on which agricultural commodities deserved higher import tariffs.

"The commodities must be selected first because each commodity
has different problems," he said.

He said that one consideration which must be taken into
account by the government when imposing a higher import tariff
was that the commodity should be a main income earner for many
people.

One example is rice, he said.

"Many Indonesian people make their living from planting rice,"
he said.

Bayu Krisnamurti, an economist at the Institute for the
Development of Economics and Finance (Indef), said the plan to
increase the import tariff must be coupled with serious efforts
to boost the competitiveness of local products.

"Imposing higher import tariffs must be coupled with policies
that will empower and boost the competitiveness of our
agriculture sector," Bayu said as quoted by Antara.

Meanwhile, Djisman Simanjuntak, an economist at the Centre for
Strategic and International Studies (CSIS) concurred, urging the
government to launch measures to boost productivity of the local
farmers.

"This (the hike import tariff plan) is not a guarantee. The
only solution is to boost farmers' productivity," Djisman told
The Post.