Govt to revitalize underdeveloped sectors

Govt to revitalize underdeveloped sectors

Rendi A. Witular, The Jakarta Post, Jakarta

The government has launched a blueprint for the revitalization of
the country's underdeveloped agriculture, fisheries and forestry
sectors, as part of an effort to help support higher economic
growth and reduce massive unemployment.

Among key points included in the blueprint are the provision
of fiscal and non-fiscal incentives to encourage business to
invest in the three sectors, as well as clear-cut policies to
improve the quality and incomes of local farmers.

Coordinating Minister for the Economy Aburizal Bakrie said the
blueprint -- which would be officially announced at a state
ceremony at the Jatiluhur Dam, Purwakarta, West Java, on June 11
-- was expected to help the country use the three sectors to
support its economic growth target of 6.6 percent annually over
the next five years.

"As sounded out during his presidential campaign, President
Susilo Bambang Yudhoyono has ordered the revitalization of the
three sectors to help achieve our economic growth target," he
said at a press briefing at the State Palace on Thursday.

The country's agricultural, fisheries and forestry sectors
have been lagging behind in comparison to other countries in Asia
due to mismanagement of resources by previous governments as well
as unclear regulations.

At present, the country's agricultural growth only stands at
an average of 3.5 percent per year.

Aside from abundant agricultural resources, business is
currently reluctant to engage in the sector because the
government is not protecting local farmers from the flood of
cheaper imported produce, especially from China and Thailand.

In order to encourage business into the sector as well as to
enable them to compete with overseas farmers, Aburizal said the
government has planned to provide fiscal incentives in the form
of tax reductions or exemptions.

"We are still studying whether to exempt or reduce value-added
tax on agricultural produce or income tax for farmers. We will
come out with the scheme soon," he said, adding that the
blueprint was designed to be "business-and-farmer-friendly".

For non-fiscal incentives, the government had prepared a
number of policies, including a possible adoption of import
quotas for overseas agricultural products in order to protect
local farmers, and a provision of permanent agricultural zones.

Minister of Agriculture Anton Apriyantono said the government
was planning to secure 15 million hectares of land throughout the
country to become permanent agricultural areas this year, in
which the utilization of the areas could not be transferred to
any other purpose apart from agriculture.

The areas will be mostly aimed at encouraging the production
of rice, corn, soybean, sugar and meat.

"The five commodities will be the government's top priority
for development over the next five years. Our target is to become
self-sufficient in supplying these five commodities for the local
market," said Anton during the press conference.

Aside from the incentives, the government will also issue
several blueprints for other sector in a bid to fully support the
development of the sector.

The blueprints which are currently in the pipeline include
those on land and agricultural space, village infrastructure,
food security provision and trade of agricultural produce.

"All of the blueprints will be issued this year. We expect
that investment from the private sector, public and local
administrations will go mostly into the agricultural, fisheries
and forestry sector," said Anton.