Soleh says Rp 11.3b of farming loans misused

Soleh says Rp 11.3b of farming loans misused

JAKARTA (JP): Minister of Agriculture Soleh Solahuddin
acknowledged on Monday official misuse in the disbursement of
heavily subsidized farming loans, but contended the incidence was
less than 1 percent.

He said his ministry found that Rp 11.3 billion (US$1.5
million), or about 0.24 percent, of the Rp 4.7 trillion disbursed
to farmers was misused by "officials".

But a visibly angry Soleh denied the incidence reached 40
percent of the loans, which was reported earlier this month by an
official from Bank Indonesia (BI), the central bank.

"The amount misused is only 0.24 percent of the total farming
loans disbursed to farmers. We have been cooperating with the
provincial administrations to prevent more abuse," he said.

He added that the cases of embezzlement were found in 13
provinces, with the highest incidence in North and South
Sulawesi, North Sumatra and provinces in Java.

Head of BI's credit section Karim Abubakar said last week that
his office found that 40 percent of the farming loans were
misused for other activities, including for financing "money
politics" before the general election on June 7.

Karim denied BI officials were involved because the central
bank was only in charge of the disbursement of the chief credits
to channeling banks.

Deviations, he added, would have occurred during the
disbursement of credit from the channeling banks to farmers, a
procedure which involved officials of the Ministry of
Agriculture.

Soleh was annoyed by the central bank official's charge,
saying it slandered his subordinates.

"We want BI to transparently reveal its findings and, if they
could not be proved, we want the official to be sanctioned for
spreading such defamation," he said.

The government planned to disburse about Rp 7.6 trillion in
heavily subsidized farming loans in the 1998/1999 planting season
ending in September to help farmers and encourage them to plant
more crops.

The minimum value of subsidized farming loans is Rp 2 million
per hectare. It carries a 10.5 percent interest rates per annum
-- far below the current commercial interest rates of 23 percent
per annum -- to encourage farmers to take advantage of the
scheme.

Soleh said about Rp 4.7 trillion of the farming loans were
disbursed, with the remaining Rp 2.9 trillion to be disbursed
until September.

He added that the government planned to disburse another Rp
9.4 trillion for the 1999/2000 planting season, which will start
in October.(gis)