Govt goes ahead with sugar program despite criticism

Eva C. Komandjaja, The Jakarta Post, Jakarta

The government said it planned to continue with the program of providing sugarcane farmers with new high-yield seeds to address the problems in the country's ailing sugar industry.

Minister of Agriculture Bungaran Saragih told The Jakarta Post last week that the government would continue to provide the country's sugarcane growers with approximately Rp 68 billion (US$8 million) in grants and Rp 1 trillion in soft loans per year until 2005 to help replant their fields using the new seeds.

"With that money, growers can replace their old sugarcane with new high-quality seeds to increase output. With such aid we hope that Indonesia will be able to export sugar by 2007," said Bungaran.

From being the world's second largest sugar producer in the Dutch colonial era, Indonesia has move so far backwards that is now the world's second largest sugar importer, behind only Russia.

The program, which was launched in September last year, has sparked criticism from the Indonesian Association of Sugarcane Growers (APTRI), who said much of the aid money had ended up in the hands of people who are not farmers, but instead were people connected to state-owned plantation firms.

Furthermore, association chairman Arum Sabil said last week that the program was ineffective because the main problem in the country's sugar industry was the old machinery still being used and their inefficient labor force.

He said that rather than spending large amounts of money on new seeds, the government needed to replace the old, outmoded sugar mills.

Bungaran claimed that the government did not have enough money to spend on both seeds and sugar mills.

"There are over 56 sugar factories in Indonesia. We would need a large amount of money to revitalize them. We can't do it now, but maybe in the next two or three years we can. So we have to prioritize sugarcane seeds," said Bungaran.

He said the reason that he put the priority on new seeds was because many plants in Indonesia had been replanted more than 15 times, while they should not be replanted, using shoots from harvested plants, more than three times.

The minister disagreed with Arum, saying that growers should not blame the low production on the factories, because in Cuba, sugar factories were older than those in Indonesia, but were still able to produce more.

Responding to criticisms about inefficient human resources at the nation's sugar factories, which are mostly state-owned, Bungaran said that he had written a letter to State Minister of State Enterprises Laksamana Sukardi to improve the management and human resources at the factories.

As for the disbursement of the money to the wrong people, Bungaran passed the blame on to the farmers.

"If it is true that the funds end up in the hands of non- farmers, it is the farmers' own fault. They are responsible for the funds. We have done everything we can for the benefit of the farmers," he disclosed.

Bungaran was optimistic that the self-sufficiency and export target in 2007 was achievable, despite pessimism expressed by state-owned sugar factory operators during a hearing with the House of Representatives early last month.

The firms reported that the sugarcane rehabilitation program in their respective areas had not gone ahead as scheduled due to many factors, such as drought and the loss of interest by sugarcane farmers because of the low sugar prices.

Bungaran added that the result of this year's acceleration plan, would not be seen for a few years.