New measure needed to boost sugar output

JAKARTA (JP): The government must change its sugarcane farming policy if it wants to stop a continued decline in sugar production, a senior official said.

National Logistics Agency chairman Beddu Amang said Wednesday that the existing policy had yet to encourage sugarcane farming.

"Some changes are absolutely needed if we want to become self- sufficient in sugar production," he said in a speech at the Asian Sugar Conference in Bali.

Beddu said that Presidential Decree No.9/1995 might be too complicated to encourage farmers to increase sugarcane production.

"For example, the People's Sugarcane Intensification Program, which allows farmers to receive low-interest loans from rural banks and cooperatives, cannot be fully implemented," he was quoted by Antara as saying.

He said the lack of productive land in Java, the largest sugarcane producing area in the country, was also another problem in raising sugar production, in addition to poor conditions of existing sugar mills.

"Most sugar mills on Java are very old and are no longer economically viable," he said.

About 72 percent of domestic sugar production came from state- owned sugar mills on the densely populated island of Java last year.

Some of the mills on Java were state-owned and equipped with machinery dating back to colonial times, making the mills far less productive than those of other companies, he said.

Beddu said increased production could only come from plantations outside of Java where more space was available.

The Director General of Plantations, Rante Tondok, told the conference that future sugar mills would be built outside Java, with top priority given to underdeveloped eastern Indonesia.

Tondok said investment for mills was open to both domestic and foreign investors.

He said domestic sugar output could exceed three million tons by 2005, with the opening of several new plants outside Java.

An industry source said Indonesia's dependence on imported sugar was expected to continue and even rise as growing per capita incomes and an expanding population raise consumption.

At the same time, the country's problem of a shortfall in sugar production would remain, the news agency reported.

Beddu said sugar consumption in the country rose by 3.8 percent, while output fell by 2.2 percent last year.

Last year, domestic sugar production was over 2 million tons against a 3 million ton demand. Production could hardly supply domestic consumption of 15 kilograms per capita a year, he said.

"In the past five years, sugar consumption has exceeded production, leaving us an importer of the commodity," he said.

He said the country had to import about one million tons of sugar per annum, costing it $350 million in foreign exchange. The amount of sugar imported by the country rose from 300,000 tons in 1991 to 620,000 tons in 1995, he said.

Beddu said the decline in sugar output was partly due to farmers who could not improve the quality of their estates, he said. (das)