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Indonesia wants to be large producer of crops JAKARTA - Following Brazil's trail, Indonesia is encouraging foreign and local investors to lease huge swathes of fertile countryside and help make the country a major food producer. "Feed Indonesia, then feed the world," was the recent call from President Susilo Bambang Yudhoyono after the government announced plans to fast-track development of vast agricultural estates in remote areas like Papua and Borneo.

Between now and 2030 Indonesia expects to become one of the world's biggest producers of rice, maize, sugar, coffee, shrimp, meats and palm oil, senior agriculture ministry official Hilman Manan said. The world's fourth most populous country, with 235 million people, Indonesia has been self-sufficient in rice since 2008 and is already the top producer of palm oil.

"If everything goes well, Indonesia should be able to be self-sufficient in five years. And then it can start to feed the world," said Sony Heru Priyanto, an expert at Satya Wacana Christian University. The first area targeted for development is 1.6 million hectares (3.95 million acres) in the southeast of the largely undeveloped province of Papua, around the town of Merauke.

The Merauke Integrated Food and Energy Estate will, the government hopes, create thousands of jobs and turn an impoverished and neglected corner of the Indonesian archipelago into a hive of activity. "We chose Merauke because it's the ideal place for food crop cultivation, such as rice, corn, soybean and sugar cane. Merauke district has 4.5 million hectares of land; 2.5 million hectares are ideal for cultivation," Manan said.

"The area is flat and has a good climate. Its soil is appropriate for those crops. Sumatra is already congested with other plantations, such as palm oil, and Kalimantan is already full of mining areas and many plantation areas also." He said Merauke's population of some 175,000 people could rocket to 800,000 if the plan takes off.

Foreigners will be able to control a maximum of 49 percent of any investing company, and will be offered incentives like tax breaks and reductions in customs and excise duties. "In order to avoid any forms of monopolies or land grabbing, we're limiting each company to a maximum of 10,000 hectares of land," Manan said, stressing that the government was selling land use rights, not the land itself.


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Posted in Economy @ 22 February 2010 04:29 CET by Jeroen · 'Blog' RSS feed · permalink






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