Sugarcane farmers urge govt to increase import tariff

Sugarcane farmers urge govt to increase import tariff

The Jakarta Post, Jakarta

Sugarcane farmers urged the government to increase again the
import tariff on sugar to help protect local farmers.

The farmers argued that the recent hike in the tariff was too
small and had not been effective in curbing the massive inflow of
cheap sugar import.

The Sugarcane Farmers Association (APTR) demanded on Friday
that the import tariff must be raised to Rp 1,200 and Rp 1,500
per kilogram on raw sugar and refined sugar, respectively.

Indonesia, the region's largest sugar importer, currently
applies Rp 550 per kilogram import tariff on raw sugar and Rp 700
per kilogram on white and refined sugar.

But the farmers association said that the current tariff was
still too low, roughly equal to around 38 percent.

In comparison, the import tariff applied by neighboring
countries like Thailand and the Philippines are much higher at 95
percent, and 100 percent, respectively. European countries had
even imposed an import duty of around 240 percent on the
commodity, while the United States applied a tariff of 150
percent.

On Thursday, local sugarcane farmers from several regions in
Java staged a massive demonstration, demanding for the higher
tariff.

They said that because of the massive inflow of cheap imported
sugar products, the price of the commodity in the local market
had fallen to Rp 2,600 per kilogram compared to around Rp 4,200
per kilogram recently.

"The price of sugar is at Rp 2,600 per kilogram, while the
production costs have reached between Rp 3.100 to 3.200 per
kilogram," Abdul Wachid, chairman of APTR was as quoted by Antara
as saying.

Earlier this year, the farmers grouping had demanded that the
import tariff should be raised to up to 110 percent.

But the government has apparently declined to boost the import
duty on grounds that it would hurt consumers as well as
industries using the commodity as raw material.

Legislators supported the calls for the higher import tariff
on sugar.

"Although the government has recently raised the import
tariff, it is deemed insufficient so it must be increased once
again," said Suryadharma Ali, chairman of the House of
Representatives Commission V on trade and industry told The
Jakarta Post.

Suryadharma, however, said that the income collected from the
higher tariff must be used to improve the country's ailing sugar
industry and boost its efficiency so that local sugar products
can compete with imported ones.

"We need to boost the efficiency, it is time to reform the
sugar industry and build new plants outside Java island to enable
the country to become self-reliant in sugar in the future," he
said.

The country's total sugar production now reaches 1.7 million
tons with an annual consumption of about 3.3 million tons.
Indonesia imported around 2.1 million tons of sugar in 1999, 1.2
million in 2000 and about 1.6 million last year.