New Restrictions Set to Affect Indonesia’s Commercial Farms
The Agriculture Ministry is considering a plan to issue restrictions affecting commercial farms, including a provision that could limit crop exports, a senior official said on Wednesday. The move is to protect domestic food security.
“We plan to tighten up the regulations governing commercial farms,” Sutarto Alimoeso, the ministry’s director general of food crops, said on Wednesday in Jakarta.
“Investors will not be allowed to export their produce unless domestic demand has been fully satisfied, even though they produced it themselves and prices on the international market are higher than at home.”
But at the same time, the government is hoping to attract domestic and international investors to develop as much 2.5 million hectares in Merauke district, Papua, as a major commercial food growing centre.
The area is currently mostly under forest cover and is home to indigenous Papuans
Global demand for rice and other grains, Sutarto said, was expected to increase in the near term. This had made the commercial-farming sector attractive to international investors, particularly for rice crops.
Sutarto warned that investment in crop cultivation had to be treated differently from other types of investment as it concerned a basic human need.
He said the government planned to issue a presidential regulation on investment in the commercial farm sector, which would permit 20-year leases, a maximum of 49 percent participation by foreign investors and the right to export crops, albeit subject to restrictions.
Sutarto’s warning of restrictions came despite one major international investor, Saudi Arabia’s Bin Laden Group, having already pulled out of a planned $4.3 billion agribusiness investment in Merauke.
Sutarto also said that he planned to attend this week’s World Rice Commerce Conference in Nusa Dua, Bali, to provide explanations on the rules for investing in commercial farms.
The government is currently developing the Merauke Integrated Food & Energy Estate (Mifee) project as a pilot rice project.
A number of local investors are currently developing large-scale farms in Merauke. These include the Medco Group, Artha Graha Group and Sinar Mas Group.
Johanes Gluba Gebze, Merauke district head, said that the area had about 2.5 million hectares of land available for the growing of rice, soybeans and corn .
Earlier, Elfian Effendi, the executive director of Greenomics, an environmental advocacy group, said that indigenous Papuans living in the vicinity of the project needed to be protected.
“Government, both central and local, must issue regulations requiring investors to ensure that local people benefit from the project,” Elfian said.
“We plan to tighten up the regulations governing commercial farms,” Sutarto Alimoeso, the ministry’s director general of food crops, said on Wednesday in Jakarta.
“Investors will not be allowed to export their produce unless domestic demand has been fully satisfied, even though they produced it themselves and prices on the international market are higher than at home.”
But at the same time, the government is hoping to attract domestic and international investors to develop as much 2.5 million hectares in Merauke district, Papua, as a major commercial food growing centre.
The area is currently mostly under forest cover and is home to indigenous Papuans
Global demand for rice and other grains, Sutarto said, was expected to increase in the near term. This had made the commercial-farming sector attractive to international investors, particularly for rice crops.
Sutarto warned that investment in crop cultivation had to be treated differently from other types of investment as it concerned a basic human need.
He said the government planned to issue a presidential regulation on investment in the commercial farm sector, which would permit 20-year leases, a maximum of 49 percent participation by foreign investors and the right to export crops, albeit subject to restrictions.
Sutarto’s warning of restrictions came despite one major international investor, Saudi Arabia’s Bin Laden Group, having already pulled out of a planned $4.3 billion agribusiness investment in Merauke.
Sutarto also said that he planned to attend this week’s World Rice Commerce Conference in Nusa Dua, Bali, to provide explanations on the rules for investing in commercial farms.
The government is currently developing the Merauke Integrated Food & Energy Estate (Mifee) project as a pilot rice project.
A number of local investors are currently developing large-scale farms in Merauke. These include the Medco Group, Artha Graha Group and Sinar Mas Group.
Johanes Gluba Gebze, Merauke district head, said that the area had about 2.5 million hectares of land available for the growing of rice, soybeans and corn .
Earlier, Elfian Effendi, the executive director of Greenomics, an environmental advocacy group, said that indigenous Papuans living in the vicinity of the project needed to be protected.
“Government, both central and local, must issue regulations requiring investors to ensure that local people benefit from the project,” Elfian said.