New decrees on sugar seen as ineffective

The Jakarta Post, Jakarta

Newly issued presidential decrees on sugar are ineffective as they only address limited aspects of the real problem contained in the trade regulations for the commodity, observers have noted.

Bustanul Arifin of the Institute for Development of Economics and Finance said that the two decrees had little, if any, effect on strengthening the country's sugar.

"The decrees are merely a temporary solution to the problem; they don't seem to have any teeth in trying to improve our sugar industry," said Bustanul during a seminar here on trade regulations on agricultural commodities.

On Monday, President Megawati Soekarnoputri issued Presidential Decree No.57/2004 on the inclusion of sugar in the list of supervised goods and Presidential Decree No.58/2004 on dealing with illegally imported sugar.

The decrees state in essence that there will be more restrictions on the importation of sugar and that smuggled sugar will be seized by the state and auctioned off.

The issuance of the two decrees came amid concern that current trade regulations on sugar are not comprehensive and contain loopholes that leave open ways for smugglers to bring in cheaper sugar from overseas.

The concern followed the discovery of around 73,000 tons of imported sugar that was later deemed to be illegal as its importation violated the regulations.

Bustanul said that the thrust of current trade regulations favored the country's farmers, but their implementation benefited certain parties in the bureaucracy, as they received fees along the way.

Director of the development study center at Bogor Institute of Agriculture Bayu Krisnamurti concurred with Bustanul, adding that the decrees should have addressed more comprehensively the wider situation that prompted the smuggling of agricultural commodities.

"There need to be presidential decrees that stipulate and regulate the restructuring of the industry ... the improvement of distribution as well as research and development on agricultural products, including sugar," said Bayu.

Bustanul was also skeptical about the government's plan to auction off the 73,000 tons of illegal sugar next year, saying that the move was too risky.

"Who can guarantee that the illegal sugar won't enter the (domestic) market before being auctioned off? Even the police say they can't prevent it. It's risky because if the sugar entered the market, it would severely endanger our farmers," he explained, suggesting that the government reexport the sugar instead.

Meanwhile, President Megawati Soekarnoputri said during a ceremony attended by thousands of sugarcane farmers in Bantul, Yogyakarta that the new decrees were part of government efforts to help boost productivity and achieve self-sufficiency in sugar production in 2007.