Rural agribusinesses need help: Official

JAKARTA (JP): A senior official suggested yesterday that business people should help accelerate the development of agriculture-based industries to improve the prosperity of farmers.

"We realize that human resources, technology and science are still underdeveloped in villages, barring farmers from having the chance to develop their own businesses," the chief of the agribusiness agency of the ministry of agriculture, Silvia Marsudi, told a seminar at the Hotel Wisata International yesterday.

She said that business people, when developing agriculture- based projects, must consider the potency of the rural areas and ways to increase the incomes of local farmers.

She said that investors' interest in agriculture-based industries is still low. Out of foreign investments approved by the government, for example, only 3.5 percent are committed to the development of agricultural businesses.

Such businesses also get only about 12 percent of domestic investments, she said.

However she acknowledged that according to the Investment Coordinating Board, foreign commitments committed for agricultural businesses increased from US$729.8 million in 1994 to $1.38 billion in 1995 and domestic investments from Rp 71 trillion to Rp 8.6 trillion.

The fact that interest rates on loans for agricultural businesses are high also indicates that banks and financial institutions have not yet shown extensive support for the agricultural sector, Silvia said.

Banks, she said, act more as gateways for money flowing from villages to urban areas because villagers generally save their money in banks, not borrowing money from them.

She said that agricultural businesses are the best way to achieve the multiple goals of economic development, including better economic structure, increasing foreign exchange revenue and creating job opportunities.

According to Silvia, to encourage more agriculture-based businesses in rural areas, her office will pay more attention to: technology improvements, financial facilities, pricing and trade rules, quality control, investment incentives, creating a more conducive business climate and human resources development. (icn)