Higher import tariffs on four commodities planned

Higher import tariffs on four commodities planned

Adianto P. Simamora, The Jakarta Post, Jakarta

The government will increase import tariffs on four strategic
agricultural commodities -- rice, sugar, soybeans and corn -- to
help protect local farmers from less expensive imported products,
Minister of Agriculture Bungaran Saragih said on Tuesday.

Speaking to reporters on the sidelines of a hearing with the
House of Representatives Commission III for agricultural affairs,
Bungaran said his office had established a special team to
formulate the new policy, and expected them to complete their
work in July.

He earlier said President Megawati Soekarnoputri had approved
the plan.

Indonesia currently has a 30 percent import tariff on rice,
and between a 20 percent and a 25 percent import tariff on sugar.
There are currently no tariffs on corn and soybeans.

Bungaran said Indonesia's current import tariffs on the four
products were considered to be the lowest in the world, and had
caused local farmers to suffer because of a massive inflow of
cheaper imported commodities.

He said that other countries had imposed higher import tariffs
on agricultural products despite being members of the World Trade
Organization.

He added that those countries also provided subsidies for
their farmers to help them competed in export markets.

"This is not fair, and we must immediately increase our import
tariffs to help our farmers compete in the market," Bungaran
said.

He, however, said that the tariff team would also consider the
interest of domestic consumers in determining the new tariffs.

"We want to help farmers but we don't want to burden local
consumers," he said.

Farmers' organizations have repeatedly demanded that the
government raise import tariffs on these four commodities, but
the International Monetary Fund has opposed any increases.

The IMF is providing the country with a multibillion dollar
bailout package.