Farmers offered free land-certification

Farmers offered free land-certification

The Jakarta Post, Jakarta

The government has offered farmers free-of-charge
certification for their land as part of a program to help people
in rural areas get access to bank loans.

Most farmers have thus far found it extremely difficult to get
bank loans even though they have land as collateral because banks
accept only certified land as securities, said Sjamsul Arief
Rivai, director for natural resources and appropriate technology
at the home affairs ministry.

"We therefore decided to get to the root of the problem by
assisting farmers who want to borrow from banks, but have never
had the legal title certificates for their land," Rivai added.

He was speaking at a seminar here on Tuesday evening where the
Yogyakarta Task Force for the Empowerment of Small and Medium-
scale enterprises and Cooperatives presented an integrated shrimp
farming venture as a pilot project to empower farmers in the
southern coastal areas of Java.

Tony Agus Ardie, chief coordinator of the task force,
complained at the meeting that local farmers in Yogyakarta and
several other districts in Central Java had long faced
bureaucratic barriers in their attempts to partake in the program
as banks refused to lend to them.

"Banks ask for collateral even before assessing the commercial
prospects of the borrower. They simply act like pawnshops," Tony
lamented.

Rivai said his directorate had been cooperating with the small
enterprises and cooperatives ministry in helping farmers get
access to bank loans by obtaining legal land title certificates,
which can cost a lot and take a great deal of time to procure
when dealing with the government officials in charge of issuing
such certificates.

"Only land, with legal title, is accepted by banks as security
for loans, but most farmers don't have the money or the technical
knowledge to fulfill the procedural requirements for obtaining
land title," he added.

The integrated shrimp aquaculture project, which is being
developed by PT Indokor Indonesia through its subsidiary PT
Indokor Dayamina in Bantul district in cooperation with the
Yogyakarta administration and the Gajah Mada University, has been
designed as a development initiative for prospective shrimp
farmers.

The farmers involved, through a cooperative, have been
exporting shrimp to Singapore, Japan and the United States. The
program focuses on helping local shrimp farmers and small
businesses meet the quality standards required by consumers in
developed countries such as the Food and Drug Administration in
the U.S.

Shrimp farming has been considered a greatly promising
business, especially on the southern coastal areas of Java, which
face the Indian Ocean where the seawater is not as polluted as
the Java Sea off the northern coast.

The project is helping local farmers and cooperatives by
providing them with production input (young shrimp) and technical
and marketing services, but the program has been stalled because
most farmers have been denied bank loans.

The experience of many other developing countries has indeed
shown that strengthening farmers' land rights and easing barriers
to land titling (certification) can set in motion a wide range of
social and economic benefits for rural people.

A World Bank study last year also concluded that secure land
tenure not only provides farmers with incentives to invest in
their land, such as building terraces and irrigation, thereby
increasing productivity, but also enables them to exchange land
rights with less red tape and its associated costs.