RI farmers not ready to compete in AFTA

RI farmers not ready to compete in AFTA

Adianto P. Simamora, The Jakarta Post, Jakarta

A national agricultural association on Tuesday called on the
government to delay its cuts in import tariffs on some
agriculture commodities for five to ten years as farmers were not
yet ready to compete in the ASEAN Free Trade Area (AFTA), set to
be fully implemented next year.

The Indonesian Farmers' Association (HKTI) chairman Siswono
Yudohusodo said that the delay was necessary to help prevent the
domestic markets from being flooded with lower prices of imported
commodities from other Association of Southeast Asian Nations
(ASEAN) members.

"We still need about five to ten years to prepare for the free
competition. There are many internal problems that need to be
addressed," Siswono told reporters.

The internal problems, Siswono claimed, included the
government's poor policies, which had hurt the country's farmers
rather than boost their competitiveness and productivity.

"The government must realize this and see the real fact of our
agriculture sector. That's why they must take swift actions to
renegotiate the implementation of AFTA on several agriculture
commodities," he said.

According to him, the areas that they were not ready to
compete with AFTA included rice, sugar, soybeans, tobacco, corn,
fruit, red onions, garlic, seeds and chicken.

"As far as these commodities are concerned, the government
must take measures to raise farmers' productivity and
competitiveness and curb the imports by imposing higher import
tariffs," he said.

Under AFTA, import tariffs in the six established members of
ASEAN -- Indonesia, Malaysia, Singapore, Thailand, Brunei and the
Philippines -- must be cut down to between zero percent and five
percent by 2003.

However, the four newest ASEAN members, Vietnam, Laos,
Cambodia and Myanmar will be allowed to delay opening up their
markets until between 2006 and 2010.

ASEAN has, however, put two agricultural products, rice and
sugar, on the so-called "sensitive list", which means that
countries can delay tariff cuts on those commodities.

With regard to rice, Siswono said, the government should raise
import tariffs to at least 60 percent to protect domestic farming
interests, and he added that it could take 10 years for
Indonesian farmers to get to level where they could compete with
neighboring countries.

He said that the association had met with several ministers
and sent a letter to President Megawati Soekarnoputri over the
issue.

"But the government has thus far taken no action," Siswono
said.

Several business associations have long been demanding the
government to delay the implementation of AFTA as they were not
yet able to compete with foreigners.

They are hoping the government will impose higher import
tariffs to protect domestic producers against inexpensive
imported products.

However, the ministry of industry and trade has said that the
government was committed to implementing AFTA next year to
restore investor confidence in doing business in the country.