GATT benefits Indonesian sugar producers

JAKARTA (JP): The recently signed General Agreement on Tariffs and Trade (GATT), which will force European countries to end protectionist policies for their sugar industries, will benefit Indonesian sugar producers, a plantation executive said.

However, Indonesian sugar producers must prepare to improve their competitiveness on the global market, the president of the State Plantation Company (PTP) XXIV-XV, Bambang Prakoeswa, said in a hearing with Commission IV of the House of Representatives (DPR) here yesterday.

"As there will no longer be protectionism in European countries, sugar prices will be higher after the implementation of the new GATT principles," said Bambang, whose company operates 12 sugar factories, four public hospitals, two alcohol manufacturers and two other supporting units in East Java.

He said Indonesian sugar producers could sell their products abroad as total output is one percent more than the country's demand.

Last year, Indonesia produced 2,483 tons of sugar, while its consumption was 2,466 tons. This year's production is estimated to reach 2,603 tons with consumption at 2,540 tons.

Bambang told the commission, which is in charge of agricultural and forestry affairs, that his company will expand the capacities of four of its sugar factories -- those in Jatiroto, Semboro, Prajekan and Asembagus.

"We're in the process of conducting a feasibility study on the expansion plan," he added.

Services

Legislator Sukandar Arun suggested that the plantation company improve services to sugarcane farmers who are involved in its business.

Farmers in East Java have reportedly complained about the company's poor payment practices.

Bambang, whose wife, Arie, is a member of the commission, acknowledged that only 66 percent of the sugar prices paid by consumers go to farmers and factories, while the rest goes to the state-run National Logistics Agency (Bulog), which monopolizes sugar distribution.

He said his company currently holds total assets of Rp 488.5 billion, including the sugar factories, most of which were established during the Dutch colonial period.(09)