Reform urged for agricultural sector
Reform urged for agricultural sector
JAKARTA (JP): People here are still wondering about the irony
of this supposedly rich country having to increasingly import
agricultural products to overcome food shortages.
People have recently had to rush into lines to buy rice,
sugar, cooking oil, margarine, milk and other basic staples for
fear of food shortages when the rupiah slumped against the U.S.
dollar.
Experts say this is a time of great opportunities in the local
agribusiness sector, but they cite policies hampering such
development.
The time is ripe now, says Bungaran Saragih of the Bogor
Agricultural University, to seriously develop the sector.
An official who spoke on condition of anonymity says that in
the current 1998/1999 fiscal year, the government is providing Rp
5.3 trillion (US$883 million) in subsidies for the import of
rice, soybeans, sugar, flour and fish powder.
The government has steadily increased imports of agricultural
products worth up to $9.3 million to cope with the food
shortages.
Data from the Central Bureau of Statistics reveals that in
1997, imports of fruits and vegetables increased to $273 million
from $240 million in 1996, sweet corn to $171 million from $133
million and fish and sea food to $13.5 million from $11 million.
Saragih says the government has been distracted by its success
in reducing the country's annual population growth rate from 2.8
percent in the early 1970s to the current level of 1.8 percent.
Indonesia's population is now about 202 million people.
"But we forget that 1.8 percent of 202 million means 3.6
million people, who require additional supplies of food and other
basic needs every year," he says.
"When all goods from hi-tech raw materials to agricultural
produce are imported, then foreign exchange reserves will run
out," he adds.
He says problems in the agricultural industry stem from
certain current policies, including the overvaluing of the rupiah
against foreign currencies, high interest rates and privileges
provided to unproductive industries.
Saragih suggests that aid from the International Monetary Fund
or any other institution should focus on developing the
agricultural industry and protecting natural resources.
"If not, then a similar economic crisis will recur," he says.
Executive director of the Center of Agricultural Policy
Studies H.S. Dillon has earlier cited studies of the multiplier
effect of the agricultural industry. He has said that a 1 percent
increase in agroindustrial output would result in a 1.5 percent
growth in other sectors of the economy. (kod)
JAKARTA (JP): People here are still wondering about the irony
of this supposedly rich country having to increasingly import
agricultural products to overcome food shortages.
People have recently had to rush into lines to buy rice,
sugar, cooking oil, margarine, milk and other basic staples for
fear of food shortages when the rupiah slumped against the U.S.
dollar.
Experts say this is a time of great opportunities in the local
agribusiness sector, but they cite policies hampering such
development.
The time is ripe now, says Bungaran Saragih of the Bogor
Agricultural University, to seriously develop the sector.
An official who spoke on condition of anonymity says that in
the current 1998/1999 fiscal year, the government is providing Rp
5.3 trillion (US$883 million) in subsidies for the import of
rice, soybeans, sugar, flour and fish powder.
The government has steadily increased imports of agricultural
products worth up to $9.3 million to cope with the food
shortages.
Data from the Central Bureau of Statistics reveals that in
1997, imports of fruits and vegetables increased to $273 million
from $240 million in 1996, sweet corn to $171 million from $133
million and fish and sea food to $13.5 million from $11 million.
Saragih says the government has been distracted by its success
in reducing the country's annual population growth rate from 2.8
percent in the early 1970s to the current level of 1.8 percent.
Indonesia's population is now about 202 million people.
"But we forget that 1.8 percent of 202 million means 3.6
million people, who require additional supplies of food and other
basic needs every year," he says.
"When all goods from hi-tech raw materials to agricultural
produce are imported, then foreign exchange reserves will run
out," he adds.
He says problems in the agricultural industry stem from
certain current policies, including the overvaluing of the rupiah
against foreign currencies, high interest rates and privileges
provided to unproductive industries.
Saragih suggests that aid from the International Monetary Fund
or any other institution should focus on developing the
agricultural industry and protecting natural resources.
"If not, then a similar economic crisis will recur," he says.
Executive director of the Center of Agricultural Policy
Studies H.S. Dillon has earlier cited studies of the multiplier
effect of the agricultural industry. He has said that a 1 percent
increase in agroindustrial output would result in a 1.5 percent
growth in other sectors of the economy. (kod)