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.