Tue, 23 Feb 2010

From: AFP

EXCERPTS:JAKARTA - Following Brazil's trail, Indonesia is encouraging foreign and local investors to lease huge swathes of fertile countryside and help make the country a major food producer.

"Feed Indonesia, then feed the world," was the recent call from President Susilo Bambang Yudhoyono after the government announced plans to fast-track development of vast agricultural estates in remote areas like Papua and Borneo.

Between now and 2030 Indonesia expects to become one of the world's biggest producers of rice, maize, sugar, coffee, shrimp, meats and palm oil, senior agriculture ministry official Hilman Manan said. The world's fourth most populous country, with 235 million people, Indonesia has been self-sufficient in rice since 2008 and is already the top producer of palm oil.

"If everything goes well, Indonesia should be able to be self-sufficient in five years. And then it can start to feed the world," said Sony Heru Priyanto, an expert at Satya Wacana Christian University.

Foreigners will be able to control a maximum of 49 per cent of any investing company, and will be offered incentives like tax breaks and reductions in customs and excise duties.

"In order to avoid any forms of monopolies or land grabbing, we're limiting each company to a maximum of 10,000 hectares of land," Manan said, stressing that the government was selling land use rights, not the land itself.

He said interest had come from Japan, South Korea and the Middle East. But analysts said the project will require up to $5 billion in infrastructure investments, from a new port to roads and runways.

And there is opposition from small-scale farmers who say their traditional livelihoods could be threatened by the large-scale commercialisation of agriculture.

"We reject the concept of the food estate. For us, food estates are another kind of land grabbing scheme. It's like going back to the era of feudalism,"

Indonesian Farmers Union official Kartini Samon said. "The regular farmers' land will be taken by big companies and the farmers will be left with nothing," she said.

Such worries are well known in other countries with similar schemes, such as Brazil and Madagascar, where there is deep suspicion about food and bio-fuel companies monopolising agricultural land.

There are also fears for the rights of indigenous Papuans, an ethnic-Melanesian minority who have long complained that their traditional lands are being unjustly exploited by outsiders.