Tue, 15 Jun 2010

Jakarta (ANTARA News) - The Agriculture Ministry and the Investment Coordinating Board (BKPM) have agreed to direct agricultural investment to the upstream sector or processing industry.

Deputy Agriculture Minister Bayu Krisnamurthi said on Monday it was now very difficult to make large-scale investments in thousands of hectares of farm land.

"Therefore, we (the Agriculture Ministry and BKPM) have agreed to direct agricultural investment towards achieving added value in the agro-industry sector," he said following a meeting with BKPM Chief Gita Wirjawan.

Bayu said the development of agro-industry would be directed towards developing farm commodities such as sugar, cassava and cacao for processing to a variety of products.

The farm commodities would be developed in the provinces of North Sumatra, Riau, West Java, East Java, Papua, West Sulawesi and South Kalimantan, he said.

"The BKPM asked for inputs from the Agriculture Ministry on potential projects to be included in its investment promotion program," he said.

He said many medium-scale investors had already sunk funds in the agricultural sector but they had not registered with the BKPM as domestic investors.

"They formed companies but did not register with the BKPM," he said.

The number of medium-scale investors with a capital of Rp100 billion to Rp200 billion was large, while that of investors with a capital of Rp50 billion was even larger, he said.
He said the BKPM had so far focused on attracting large scale investors with capital of Rp10 trillion to Rp50 trillion.

"The BKPM should also pay attention to small and medium scale investors. Moreover, most agricultural businesses in Indonesia are small and medium scale," he said.

He said investment in the agricultural sector during the 2005-2009 period totaled Rp11.8 trillion compared to Rp2.3 trillion in the previous five-year period.

"Much of the investment went to the plantation subsector," he said. (*)