One-third of state agricultural firms losing money

One-third of state agricultural firms losing money

JAKARTA (JP): Minister of Agriculture Sjarifudin Baharsyah
announced yesterday that 12 out of 35 state-owned agricultural
companies suffered losses of Rp 30.7 billion (US$14.1 million) in
the first quarter of this year.

He said in a hearing with Commission IV of the House of
Representatives (DPR) that the companies were comprised of nine
plantation firms, two fishery companies and one animal husbandry
company.

He explained that PTP (Plantation Company) IV suffered a
deficit of Rp 3.65 billion, PTP VIII Rp 8.06 billion, PTP IX Rp
344 million, PTP XII Rp 3.26 billion, PTP XIII Rp 1.85 billion,
PTP XVIII Rp 1.01 billion, PTP XXIII Rp 5.08 billion, PTP XXVI Rp
4.41 billion and PTP XXVIII Rp 1.27 billion in the January-June
period.

PT Usaha Mina suffered a loss of Rp 1.52 billion, PT Tirta
Raya Mina Rp 206 million and PT BM Ternak Rp 41 million.

"The calculations were made before those companies paid their
taxes," Sjarifudin said.

The minister said 11 other companies generated total profits
of Rp 59.51 billion in the first semester.

He said reports from the other 12 state agricultural firms
were not yet available.

Sjarifudin told the commission, which is in charge of
agricultural and forestry affairs, that total after-tax profits
to be gained state-owned agricultural companies will likely
decline by 21.78 percent to Rp 223.20 billion this year from Rp
285.37 billion last year.

Causes

He said the decline in profits will be caused by this year's
long drought, weak demand from consumers, fierce competition from
other commodity exporters and the failure of some companies to
expand marketing.

"This assessment, however, has not taken into account recent
increases in the prices of some commodities, like coffee and
rubber," Sjarifudin told reporters during a break of yesterday's
hearing.

Recent news reports indicated that local rubber prices have
been bouncing back due to keen interest by the Russians, who have
been buying approximately 1,000 to 2,000 tons of rubber every
month.

Traders have also said that Indonesian SIR 20 grade rubber
prices had risen to six-year highs of about 54 U.S. cents per
pound from 35 cents last January.

Analysts have estimated that state agricultural companies
control about 7.5 percent of the country's 12 million hectares of
trees and cash crops.

Indonesia's agricultural sector contributed $2.64 billion or
7.18 percent of the country's total exports of $36.82 billion
last year.

The Agriculture Ministry, in May, reorganized the 26 state
plantation companies by merging them into nine groups in an
attempt to make them more efficient and to improve their role in
the country's economic development.

Data at the Central Bureau of Statistics (BPS) shows that the
agricultural sector contributed 20.2 percent of Indonesia's Gross
Domestic Product (GDP) last fiscal this year.

The government expects the sector to grow by 3.3 percent per
annum in the coming five years.

Sjarifudin said that in order to meet the target of 3.3
percent growth in the agricultural sector, a total investment of
Rp 10.1 trillion is required this year, of which 30 percent is
expected from the government and with the remainder coming from
the private sector.(hdj)