Megawati agrees on subsidy plan for sugarcane farmers
Megawati agrees on subsidy plan for sugarcane farmers
Adianto P. Simamora, The Jakarta Post, Jakarta
President Megawati Soekarnoputri has agreed to a plan to
subsidize local sugarcane farmers, according to the chairman of
the Indonesian Farmers Association (HKTI), Siswono Yudhohusodo.
"The President has emphasized that we need to provide a
subsidy to local sugarcane farmers, but it is only temporary,"
Siswono was quoted by Antara as saying after meeting with
Megawati on Thursday.
There were no further details on the form or the size of the
subsidy to be given to the farmers.
Minister of Trade and Industry Rini M. Soewandi and Minister
of Agriculture Bungaran Saragih previously proposed a subsidy of
Rp 500 for each kilogram of sugar product, as part of the effort
to boost the productivity of sugarcane farmers.
Legislators have also been putting pressure on the cash-
strapped government to provide a subsidy for the farmers.
Earlier this week, thousands of sugarcane farmers from Java
and Sumatra staged a rally at the finance ministry to demand
Minister of Finance Boediono approve the subsidy plan.
But Boediono has so far not yielded to the pressure, only
saying that he has yet to discuss the plan with the related
ministers.
According to HKTI, domestic sugar demand will continue to rise
in the future, reaching some 10 million tons in 2035.
Today, the country's total sugar production reaches 1.7
million tons, with annual consumption at about 3.3 million tons.
Indonesia, the world's second largest sugar importing country,
imported about 2.1 million tons of sugar in 1999, 1.2 million in
2000 and about 1.6 million last year.
Siswono said the government must come up with a plan to boost
farmers' productivity in order to meet higher domestic demand in
the future.
During the meeting with Megawati, Siswono also asked that the
import tariff on sugar be increased to Rp 1,200 per kilogram from
Rp 700 per kilogram.
He said that according to a World Trade Organization
agreement, Indonesia was allowed to increase the import tariff on
sugar to 110 percent.
"We must not give in to the pressure of the international
community on our import tariff policy," Siswono said.
Local farmers and the Sugar Association have repeatedly called
on the government to impose an import tariff of 110 percent to
protect them against cheaper imported sugar.
Siswono said Thailand and India imposed an 80 percent and 90
percent import duty on the commodity, respectively.
Minister of Trade and Industry Rini issued on Monday a new
decree regulating sugar imports. This new decree authorizes only
state-owned plantation companies to import sugar.
The decree also stipulates that all sugar imports will be
stopped if the price of the commodity falls below Rp 3,100 per
kilogram at the level of the sugarcane farmers.