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.