Minister calls for new direction in agro-policy

Minister calls for new direction in agro-policy

JAKARTA (JP): Higher consumer spending on value-added food
products and increasing demand for processed foods will force the
government to create policies that favor agriculture and agro-
based processing industries, a minister says.

Minister of Agriculture Sjarifudin Baharsjah said yesterday
that agribusiness and agro-industry would be an increasingly
important sector as it linked natural resources to greater
employment and higher earnings by adding value to raw materials.

"Indonesia's current economic climate provides favorable
conditions for the further development of agribusiness, as shown
by the domestic consumption pattern and agricultural production,"
Sjarifudin said at the opening of the Seventh World Congress of
the International Food and Agribusiness Management Association.

Sjarifudin said consumer spending was increasing at an annual
rate of about 6 percent.

"The growth in the demand for processed foods, will, in turn,
promote a development of technology, investment and marketing
systems," he said.

Sjarifudin said the change from an on-farm-based agricultural
system to an off-farm-based agribusiness system required a shift
in government policies.

New policies should favor agriculture and agro-based
processing industries which give rural people greater access to
job opportunities, he said.

"This implies adjustments to fiscal and financial policies,"
he said.

He said new policies should adopt a more market-oriented
agribusiness approach.

Academic Bungaran Saragih of the Bogor Agricultural
University's School of Agriculture said that while the role of
agriculture in the country's gross domestic product was
declining, the number of workers in the sector was still on the
rise.

He said it would take several years before Indonesia could
shift the labor force in the on-farm sector to off-farm economic
activities, which included agribusiness, agro-industry and
supporting services.

"Currently we have too many subsistence farmers. But the trend
is slowly changing," Bungaran said.

Sjarifudin said that the agricultural sector's labor force,
including forestry, was growing about 1.05 percent a year.

During the Sixth Five-Year Development Plan which started in
1994, the total labor force was predicted to increase 12.6
million. Of this number 15 percent was expected to be absorbed
by the agricultural sector and about 24 percent by the industrial
sector.

IAMA President Herman H.F. Wijffels said in his opening
remarks that technology would play a major role in agribusiness.

"Increased production must come from productivity gains
because the amount of arable land will continue to shrink," he
said.

Biotechnology would be an increasingly important field,
although ethical debates were bound to arise from time to time,
he said.

He said that producers would not be able to neglect consumers'
concerns about the environment and food safety issues in the
future.

"Consumers should be able to trust the technology applied to
agricultural products. They must be assured (the products) are
sustainable and safe," he said. (pwn)