President Susilo asks state firms to help farmers

The Jakarta Post, Jakarta

President Susilo Bambang Yudhoyono said he has ordered state- owned enterprises to work to improve the livelihood of farmers and fishermen who constitute a majority of the country's 230 million population.

Speaking before thousands of farmers in Harjomulyo Village, Ogan Komering Ulu Timur, West Sumatra, on Friday, the President said the government did not want farmers to become poorer and become caught in a poverty trap because they were exploited by big investors, including state-owned enterprises.

"We don't want rich businessmen to get richer while farmers and fishermen get poorer. We don't want this to happen," he said as quoted by Antara.

The President, however, did not provide details as to how the government planned to reform or encourage state-owned enterprises to help, but only said: "We want to fix up our marketing policies so that all agriculture products marketed at home and overseas can be sold at higher prices."

Susilo accompanied by first lady Ani Yudhoyono, Minister of Agriculture Anton Apriyantono, Cabinet secretary Sudi Silalahi and South Sumatra Governor Syachrial Oesman, stressed the government had to improve the social welfare of farmers and fishermen because they made up a majority of the population.

Over the past four decades, farmers and fishermen have endured economic hardship because of soaring prices for fertilizer and farm equipment and the falling price of unhusked rice.

Many farmers in Sumatra have changed from growing rice to fruit and vegetables and ornamental plants, which get higher prices on local markets. Others have converted their land into palm oil and rubber plantations.

Susilo told the meeting he had recently held talks with his Malaysian counterpart, Prime Minister Abdullah Badawi, to discuss how to improve crude palm oil production and maintain price stability. Malaysia and Indonesia are the two largest crude palm oil producers in the world.

Industry players needed to increase their cooperation with investors and pay attention to managing the environmental aspects of the crop, Susilo said.

The Ministry of Agriculture, regional administrations and farmers should work to ensure the efficiency of land use, since a bigger part of Sumatra had been converted into palm oil plantations, he said.

"Secondly, the cooperation between investors and farmers should benefit both sides and thirdly, all sides involved in the industry should not damage the environment," he said.

Many investors or farmers have burned off protected tropical forests to clear land for palm oil plantations, threatening the habitat of protected species and biodiversity on the island and "exporting" a thick haze to neighboring countries such as Malaysia and Singapore.

The President made no comment about the mounting demand of small land-holders for land reform in Sumatra. The majority of horticultural land in the province is owned by private or state plantation companies.