Artha Graha expands partnership in seed business

Riyadi Suparno, The Jakarta Post, Chengdu, China

Despite a recent deficit in the country's agricultural sector, the Artha Graha Group, headed by politically well connected businessman Tomy Winata, has expanded its push into the hybrid seed business with its Chinese partner company.

The Artha Graha group, through PT Penta Prima Pusaka, along with the Sichuan Guohao Seeds Industry (SGSI) of China have agreed to establish the Integrated Hybrid Seed Center in China, which will develop various new varieties of hybrid seeds. The center is scheduled to be operational by next year and will be officiated in 2009.

PT Guohao Penta Prima, the joint venture between Artha Graha and SGSI, has also forged an agreement with the Indonesia Center for Rice Research, a government agency, to develop hybrid rice seeds and exchange germ plasma and other expertise.

An agreement between the parties was signed Saturday night at a ceremony in Chengdu, China, witnessed by visiting Vice President Jusuf Kalla and the Minister of Agriculture Anton Apriyantono along with other Indonesian officials and representatives of local governments in China.

Kalla said agreements such as this should help Indonesia return to self-sufficiency in rice production within two to three years.

"Our deficit is only one million tons of rice. Currently we produce approximately 33 million tons. If we could increase our level of production by five percent, we would be self-sufficient. And increasing production by five percent should be easy," he told journalists after the signing of the agreement.

He said increasing rice production could be achieved with seedling technology and better fertilizer and irrigation practices and that the government will work on each of these areas.

"Look at China with its population of 1.3 billion people. They don't have a problem feeding their people. So we should also be able to produce enough rice to feed the population of our country," Kalla said.

While the government will be involved in related research, the commercial production of seeds is better taken care of by entrepreneurs, Kalla said.

Tomy Winata, who was present at the signing of the agreement, said the decision to expand the partnership was aimed at helping Indonesia fulfill its goal of being self-sufficient in rice production.

"I asked some of my friends, including those in China, to help us to produce hybrid seeds," he said.

Artha Graha and SGSI have been in partnership for a few years and have produced a variety of hybrid rice seeds with the potential to accelerate rice production to 10 tons per hectare, a sharp increase from the normal productivity rate of six to eight tons per hectare.