RI requires Rp 30.05t to boost corn, soybean outputs

Zakki P. Hakim, The Jakarta Post, Jakarta

The government needs to invest Rp 30.05 trillion (US$3.16 billion) in horticulture to reduce the country's dependency on imported rice, corn, soybean and sugar products, the Ministry of Agriculture says.

The investment, which targets soybean, cassava and peanut farmers and aims to improve technology and land use throughout the food crop sector, would increase growth in food crops by an average of 0.89 percent per annum during the next five years, according to the Ministry of Agriculture's five-year plan obtained by The Jakarta Post.

The plan sets a rice production target of 37.51 million tons in 2009, slightly lower than the estimated consumption of 37.96 million tons. This year's rice target is forecast at 35.77 million tons, while consumption is likely to reach 36.08 million tons.

Corn consumption is projected at 13.96 million tons by 2009, or up by an average 4.23 percent year-on-year, from 11.82 million tons this year. The ministry is targeting national corn production to be self-sufficient by 2008, higher than national consumption of 13.27 million tons.

It also targets soybean production to grow by an average of 6.5 percent annually, to reach a million tons in 2009 from 777,000 tons this year, with forecast consumption in 2009 at 2.39 million tons.

Even with the growth, the country would need to import an average of 1.6 million tons of soybeans a year, or almost two- thirds of the national consumption, during the next five years.

The ministry has pushed back targets for the nation to become a net sugar producer until well after 2009, despite earlier plans to halt sugar imports by 2007.

It predicts sugar production in 2009 will be at 2.85 million against projected demand of 3.82 million tons, a deficit of 973,000 tons.

With almost half of the projected investment being allocated to food crops, it is clear the government is prioritizing investment in the sector.

The money is a drop in the bucket, however, if one considers that the general agriculture sector, which includes food crops, horticulture, plantations and livestock, is reported to need Rp 77.07 trillion during the next five years.

Minister of Agriculture Anton Apriyantono said the fund would be allocated to maintain and develop rural infrastructure as well as efforts to provide financing schemes for farmers.

He said the country badly needed to improve its agricultural infrastructure, especially in irrigation systems, of which 40 percent were estimated to be damaged or run down due to lack of maintenance.

As it only receives Rp 4 trillion annual allocation from the State Budget, the ministry has to look for private investment to develop the sector.

New investment will also focus also on optimizing land use, developing rural infrastructure, ensuring better post-harvest systems and providing financing schemes for farmers.

Observers have said that to bolster rice production, the government must help farmers to adopt new technologies -- including new strains of rice, harvesting technology and marketing techniques -- through education and cheap loans.

The government had been urged to provide tax incentives to farmers and impose harsh penalties on those converting farmland to other uses.