RI to apply corn imports duties

RI to apply corn imports duties

Dow Jones, Jakarta

The Indonesian government plans to apply flexible import duties on corn in 2007 to stabilize domestic prices, said an official on Tuesday.

A 5 percent-10 percent import duty will be applied outside the main harvest season, while a maximum 30 percent import duty will be applied during the main harvest season, when corn supply is abundant, said Maxdeyul Sola, director of cereal products at the Ministry of Agriculture.

Corn is currently subject to a 5 percent import duty.

"It's a mechanism to protect farmers during the main harvest season so that domestic prices won't fall," Sola told reporters.

Stable domestic prices will entice farmers to keep planting corn, he added.

The main corn harvest normally runs from February to March.

Sola said the government plans to implement the new import duties in 2007 because the country is expected to achieve self- sufficiency in corn production then.

The Ministry of Agriculture forecast corn output at 12.86 million tons in 2007, while consumption is expected to reach 12.52 million tons in the same year.

This year, corn output is estimated at 11.74 million tons, from 11.23 million tons in 2004, amid rising yields and higher acreage, according to the Central Statistic Bureau.

Corn is the second food source after rice for many Indonesians and an important raw material for livestock feed. Higher corn output will reduce the country's dependence on imports.

The government expects corn output to grow by 4.26 percent annually between 2005-2025 through several means, including improvements in infrastructure and providing agricultural machinery, to achieve its target to become a major corn producer.