RI suffers decline in soybean production

The Jakarta Post, Jakarta

Indonesia has been suffering from an ongoing decline in soybean production over the last three years, according to an official at the Ministry of Agriculture.

Director general of food plant production Farid Bahar stated in Jakarta on Monday that Indonesia's soybean production was estimated to drop by 16 percent, to 852,582 tons this year from 1.02 million tons last year.

National soybean production stood at 1.38 million tons in 1999.

Farid said that low soybean production could not meet local rising demand, forcing the country to import the commodity to meet the shortfall.

Currently, he said, 60 percent of national demand for soybeans was being supplied by imports, mostly from the United States due to their relatively lower cost.

Farid attributed falling soybean production to the continuing reduction of cultivated land over the last three years.

Currently, there were only 707,229 hectares of cultivated land available for soybeans this year, a sharp decline from the 824,484 hectares last year and 1.55 million hectares in 1999.

Other factors contributing to the decreasing soybean output included low quality soybeans used by Indonesian farmers, bad weather and various plant diseases.

Furthermore, Farid explained, farmers were eager to plant the commodity but a long rainy season had hindered soybean production.

In addition, low soybean prices at local markets had further discouraged farmers from planting the commodity.

Farid explained that to boost soybean production, the government would spearhead a campaign to make available farmland for soybean production in a number of areas, including Java, South Kalimantan, South Sulawesi and Irian Jaya.

He said his office had invited private companies to enter the soybean business, as the market was expanding, while domestic output could not catch up.

He estimated that next year, a total of 3.8 million hectares of land would be available for soybean production.

If that land were planted with soybeans, output would increase drastically, as one hectare of land could usually produce about 2.7 tons.

However, he admitted that it would be hard to attract private firms to go into soybean production as most local banks were not yet interested in the sector.

"Banks still regard soybean plantations as high-risk and believe that farmers will be unable to repay their loans. That's why banks are reluctant to give them loans," he said.