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.