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.