Wed, 24 May 2000

Govt launches new farming concept

JAKARTA (JP): Minister of Agriculture M. Prakosa said on Tuesday the government had designed a new farming concept to help boost efficiency in the agricultural sector.

Prakosa said that under the corporate farming concept, small farm areas of between 0.3 of a hectare and 0.4 of a hectare would be consolidated into a corporate farming unit with a land size of between 100 hectares and 150 hectares for efficiency.

"This will help improve the welfare of the farmers," he told a news conference following a meeting with senior economic ministers.

Prakosa said that several pilot projects in Central Java, West Java, South Sulawesi and Sumatra were recently implemented.

He said the new concept was expected to become a national program at the upcoming 2001 planting season.

He explained that under the new concept, each owner of small farmland would become "shareholders" in the corporate farming unit.

He said the corporate farming unit would be managed by a professional farm manager appointed by the shareholders.

Prakosa said the new corporate farming unit was expected to be able to boost domestic rice production by about 20 percent once it was fully implemented.

He said a corporate farming unit with greater land size would encourage the use of modern farming technology and a better marketing strategy.

The new concept would not be limited to rice farming but was open to other commodities depending on the farming condition of each area, he added.

Prakosa said the government was planning to provide some Rp 1 trillion in cash to develop the new farming concept.

He said the government would introduce a new farming credit scheme in June to support the new program.

Prakosa acknowledged the new corporate farming unit would result in farm labor layoffs as a consequences of the increase in efficiency.

He said the government was also designing new policies to absorb the unemployment generated by the new corporate farming concept.

Prakosa said the agricultural sector was the backbone of the country's economy, contributing a third to the gross domestic product.

"Over the next five years, the agricultural sector will remain the prime mover of our economy," he said. (rei)