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)