RI farm sector needs Rp 77.7t in new investment

Zakki P. Hakim, The Jakarta Post, Jakarta

The country's agricultural sector needs fresh investment of up to Rp 77.7 trillion (US$8.11 billion) in the next five years for the sector to grow by just 3.58 percent -- up from this year's estimated 2.97 percent -- according to the Ministry of Agriculture.

The Ministry set a target for the sector -- covering food crops, plantations, horticulture and husbandry -- to contribute at least Rp 226 trillion to the Gross Domestic Product by 2009, as revealed in the ministry's five-year plan given to The Jakarta Post.

The strategic plan also aims to reduce the number of poor in the country from the estimated 18.9 percent of the population this year to 15.02 percent by 2009.

Minister of Agriculture Anton Apriyantono recently explained that the current government's main challenge was to remain true to its commitment of maintaining and developing rural infrastructure as well as providing financing schemes for farmers.

He said the country needed fresh funds to improve its ailing agricultural infrastructure, especially the irrigation system, of which 40 percent was currently damaged due to a lack of maintenance.

"The Ministry of Agriculture gets only Rp 4 trillion ($421.05 million) annually from the state budget. That amount is not enough to fix our ailing irrigation system, therefore we must seek other (financial) sources," he said.

Late last month, the government offered 10 agricultural projects worth $1.57 billion to a Middle East-based group of investors, spearheaded by the Islamic Development Bank (IDB).

The projects on offer were mostly in developing or rehabilitating agricultural and rural infrastructure, including irrigation systems in several areas across the country.

To achieve the target, the Ministry hopes to use its Rp 4 trillion state budget allocation to boost production of several priority and strategic commodities and to lure public funds and private sector investment in the development of such commodities.

Food crops include rice, corn, soybeans, cassavas and peanuts; horticulture include potatos, red chilis, red onions, mangos, mangosteens, bananas, durians, oranges and orchids.

The ministry also prioritizes plantation commodities such as natural rubber, coconut, oil palm, coffee, cacao, cashew fruit, pepper, sugarcane, fiber and tobacco.

In addition there is a priority to breed more beef cattle, goats, sheep, chickens, ducks and pigs.

In the document, the new investment would focus also on actions to optimize land use, develop rural infrastructure, ensure better post harvest activities and provide financing schemes for farmers.

The government is scheduled on Saturday to hold a ceremony to release its blueprint on the revitalization of Agriculture, Forestry and Fishery sectors at Jatiluhur reservoir in Purwakarta, West Java.