Minister concerned over delays in farm credits

JAKARTA (JP): Minister of Agriculture Sjarifudin Baharsjah expressed concern over the delay of loan distribution to farmers, saying that it had caused them serious disadvantages.

Speaking to reporters late last week, Sjarifudin said that farmers could have actually obtained loans specially allocated for them before the last planting season, but they failed to do so because Bank Rakyat Indonesia and Bank Pembangunan Daerah -- two banks appointed by the government to manage the loans -- were too slow in giving information on the simplified procedures to obtain the credits.

"The delay has caused financial difficulties for farmers because they had to buy fertilizers and farming equipment at higher prices, with their own money," he said.

Farming credits, locally called KUT, were first introduced in 1985 by the state-owned Bank Rakyat Indonesia. The facility is aimed at strengthening rice and secondary crop cultivation and to improve farmers' welfare.

Sjarifudin said that the ministry had decided to simplify the procedures needed to obtain the loans by cutting back a large amount of red tape. From the present 11 steps, farmers now are only required to take three steps before obtaining the loans.

He said that for the 1994 planting season (October 1994-March 1995), the banks provided Rp 34.6 billion (US$15.5 million) in KUT loans, of which Rp 831 million or 2.4 percent had been repaid.

The accumulative amount of KUT credits channeled between 1985 and 1995 has reached Rp 567 billion, 79.7 percent of which has been repaid.

Although farmers could not use the loan during the previous planting season, Sjarifudin was optimistic that they could use it for the upcoming planting season in October.

He noted that the productivity of rice crops had increased lately, not only because there was an expansion of the harvested areas but also because farmers used larger and effective amounts of fertilizer.

The minister said that the last harvest season resulted in more crops than the previous season. This could be seen from the increase of planted areas which reached more than 863,584 hectares this planting season, indicating a 50.5 percent increase over last year's planting season of 573,844 hectares.

He said that to accelerate the distribution of information on the KUT loans, field supervisors would receive an incentive worth one percent of the loans for farmers.(pwn)