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.