Rice, sugar and AFTA

In a surprise move at the 10th AFTA board meeting in Jakarta Wednesday, Indonesia asked to postpone lowering tariffs on rice and sugar until Jan.1, 2020, to coincide with the APEC schedule.

From the point of view of our national trade interests, the 10-year postponement would provide a good incentive for investment in the sector and for production of the two commodities.

Apparently this move was in response to the government's decision to allow investors in sugar refinery businesses outside of Java to market a part of their own production without the help of the State Logistics Agency (Bulog).

This measure reflects the government's resolve to gradually reduce Bulog's monopoly so the private sector can eventually take over the entire production and distribution of these strategic commodities and compete in a free market.

Investing in agricultural estates, however, is not for those who desire fast profit. In this particular sector, profits are to be expected only after 10 to 15 years at the earliest.

-- Bisnis Indonesia, Jakarta