The Jakarta Post , JAKARTA | Mon, 03/16/2009 11:30 AM
Milking it all the way: A farmer milks a cow at his farm near Jl. Mampang Prapatan, South Jakarta, in this June 19, 2008, file photo. The Agriculture Ministry has proposed Rp 145 billion (US$12.18 million) this year from the stimulus package to boost the competitiveness of the country’s meat, milk and dairy businesses against foreign competitors, ministry officials said Saturday. (JP/J. Adiguna)
Indonesia is preparing massive financial and technical support for meat and tropical fruit businesses in a bid to cash in on ASEAN’s free trade deals with Australia and New Zealand.
The Agriculture Ministry’s director general of husbandry, Tjeppy D. Soedjana, said Saturday the ministry had proposed Rp 145 billion (US$12.18 million) this year from the stimulus package to boost competitiveness of the country’s meat, milk and dairy businesses against foreign competitors.
He added the businesses would face tougher challenges due to the recently inked free trade agreement (FTA) between ASEAN and Australia and New Zealand.
“The proposed stimulus will help local cattle farmers develop their businesses, while also preparing them to compete against imported products before the ASEAN FTA with Australia and New Zealand takes full effect,” Tjeppy said.
Under the FTA, Indonesia will completely slash its import duties on four beef products from the two countries by 2020 and on seven dairy products between 2017 and 2019.
Tjeppy said steps in preparing the farmers should be taken immediately from the upstream level of the cattle breeding sector.
“If the Finance Ministry approves the stimulus, not only we can cover domestic demand, but we can also compete with overseas products and even export our products,” he said.
He added the stimulus would take the form of loan interest subsidies for domestic cattle farmers under the existing cattle breeding business financing (KUPS) scheme.
“The KUPS scheme is pro-poor and intended for small cattle farmers,” he said, adding local farmers were currently breeding 10 million cows.
Besides the subsidy, the ministry will also help cattle breeders work with oil palm farmers to help provide sufficient feed for the cattle.
“A hectare of oil palm plantations can feed two to three cows. There are around 7 million hectares of plantations, which translates into feed for 21 million cows,” Tjeppy said.
He added Indonesia imported 30 percent of its meat demand annually, consisting of 450,000 cows for breeding and 150,000 tons of frozen meat, while importing 70 percent of its dairy demand.
Besides the meat and dairy businesses, the ministry will also help expand the export of tropical fruit to Australia and New Zealand under the FTA, which scraps import duties for horticultural produce.
Sri Kuntarsih, secretary of the Agriculture Ministry’s horticulture directorate general, said Indonesian fruit exports to Australia were limited because of strict quality inspection systems in place, which acted similar to non-tariff barriers.
She added that ever since the deal was signed, the ministry had submitted a proposal to the Australian Embassy in Jakarta regarding the possibility of exporting three types of produce: mangosteens, mangoes and onions.
“However, the embassy said we had to select only one for the time being. So we’ve decided to go with mangosteens,” she said.
“Australia has very high standards for the quality of agriculture produce. “This has been our main concern for not being able to enter their market sooner.”
Indonesia is targeting a 13 percent jump in horticulture exports worldwide this year to $411 million. (fmb/hdtw)