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.