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)