Plantation firms complain over high fees
Plantation firms complain over high fees
JAKARTA (JP): Plantation companies criticized the number of fees they had to pay to the government, saying that the fees affect their competitiveness and efficiency.
Chairman of the Association of Indonesian Plantation Companies, Sudja'i Kartasasmita, said over the weekend that the local and central administrations imposed at least 29 legal fees on agribusiness companies.
"In West Java, the number reaches 35," Antara quoted him as saying.
The fees are so burdensome that they are a dilemma for agribusiness companies, he said. On one side, he continued, companies want to cut back production costs to boost competitiveness and efficiency, but on the other, each government institution was competing to increase their revenues as much as possible.
Sudja'i pointed out, however, that most of the fees went to causes "which have little or nothing to do with the agribusiness sector".
"As an example, fees in West Java are used for street lamps, for getting licenses to store fuel -- which range between Rp 100,000 (US$43) and Rp 500,000 a year -- and for retributions for building roads," Sudja'i said.
If such practices continue, he said, not only will the fees dampen local businesspeople's enthusiasm towards the sector, they will also drive away prospective foreign investors.
Licensing
Sudja'i pointed out that licensing procedures were the most troublesome and time consuming.
To get commercial right over land, for instance, an investor must wait years, both at the local and central levels, to complete the National Land Agency and Ministry of Forestry procedures.
"This situation will easily cause foreign investors to move elsewhere, such as Malaysia and Vietnam, which are our main competitors in agribusiness," he said.
Sudja'i also considers financial problems another hindrance to the development of agribusiness.
Banks prefer to give credit to short-term projects like those in the property sector. Only a limited amount of funds are allocated to long-term projects like plantations, Sudja'i said.
He said that Indonesia's share of the international agribusiness market was only 0.4 percent because sector development focuses only on palm oil, rubber and cacao.
Prof. Bungaran Saragih of the Bogor Agricultural University suggested last week that the government show more commitment to developing the country's agricultural sector.
He is convinced the sector will remain strong in the coming century. Developing agribusiness, he said, is the most appropriate way to ensure an even distribution of wealth and resources, generate more jobs, and narrow the social-economic gap. (pwn)