Rural agribusinesses need help: Official
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)