Infrastructure before fertilizer subsidies: Agriculture Minister

Mustaqim Adamrah, The Jakarta Post, Jakarta | Fri, 10/16/2009 8:29 PM

Agriculture Minister Anton Apriyantono says the next government should prioritize development of “off-farm” facilities (mainly infrastructure) instead of “on-farm” facilities, such as fertilizer subsidies.

“We still see subsidies much larger than the program itself. Why don’t we reallocate some of the budget [in the Agriculture Ministry] for infrastructure development rather than for fertilizer subsidies that are short-lived,” Anton said Friday after President Susilo Bambang Yudhoyono’s Indonesia United Cabinet farewell ceremony.

However, he could not specify the amount of investment required for infrastructure projects in agriculture.

A number of foreign investors, mainly from the Middle East, were reluctant to open business in eastern Indonesia because of the lack of proper infrastructure, as well as the availability of idle land, Anton said. These were “the biggest problems [in investment] in agriculture,” he said.

Among Middle Eastern investors interested in operating in Indonesia was the Saudi Arabia-based Binladin Group.

The group was expected to set up an operation on 500,000 hectares of land across Indonesia, with an expected investment of Rp 39 trillion, which would be spent within the course 15 years.

Besides Papua, the government has also offered land in Kendari, Central Sulawesi and in Lampung for the Binladin project.

Middle Eastern companies have been aggressively investing in agricultural businesses around the globe to help them secure future food supplies, since their own climatic conditions and geographic location are considered unfavorable for the production of adequate agricultural produce.