Indonesia sees rice crop up, seeks Gulf farm investment

Business Times 14 Jun 10;

(JEDDAH) Indonesia expects a 6 per cent rise in its milled rice harvest this year, leading to a two-million tonne surplus, and it aims to attract Gulf Arab investors to develop 'sleeping land', Agriculture Minister Suswono said.

'Growth is 6 per cent from last year's figure and over the next five years we would like to see a growth of 3.2 per cent,' Mr Suswono said on Saturday during a visit to Saudi Arabia.

Indonesia is expected to produce 37 million tonnes of milled rice this year, which exceeds the 35 million tonnes required to satisfy domestic demand, he told reporters in the Red Sea port city of Jeddah.

Mr Suswono met businessmen from the Gulf Arab country and discussed agricultural business opportunities in Indonesia. He was scheduled to meet the Saudi agricultural minister in the kingdom's capital, Riyadh, yesterday.

Indonesia has over 7.7 million hectares of unused land that is in need of development, Mr Suswono said.

'There is still . . . untapped potential for agribusiness investment in Indonesia, particularly in the field of food crops, industrial processing as well as horticulture and land stock industry,' he said.

Gulf countries, which mainly rely on food imports, have been investing in farmland overseas to secure their food supply, but difficulty in regulations has led to delays in tapping Indonesian opportunities.

Last year, Saudi Arabia's Bin Laden Group stalled plans for a US$4.3 billion project to develop two million hectares of land in Indonesia.

Mr Suswono said there were no Gulf Arab firms operating in his country, but hoped to attract investors during his visit. 'We still have some difficulties internally in arranging land for large-scale farming, which is requested by foreign investors. This is due to environmental reasons to protect our rainforests,' he said, adding that the government has since issued regulations for investment in large farming. -- Reuters

Indonesia Woos Gulf Investors to Boost Local Agribusiness
Asma Alsharif Jakarta Globe 13 Jun 10;

Agriculture Minister Suswono launched a major charm offensive over the weekend in Saudi Arabia in an attempt to woo Gulf states into investing in agricultural business opportunities in Indonesia, calling on Arab investors to come and develop “sleeping land” here.

The minister met businessmen in the kingdom on Saturday to discuss agricultural business opportunities in Indonesia.

Indonesia has more than 7.7 million hectares of unused land that is in need of development, Suswono said.

“There is untapped potential for agribusiness investment in Indonesia, particularly for food crops, industrial processing, horticulture and land stock industry,” he said.

He was scheduled to meet the Saudi agricultural minister in the kingdom’s capital, Riyadh, on Sunday.

Gulf countries, which mainly rely on food imports, have been investing heavily in farmland overseas in attempt to secure their food supplies, but regulation difficulties have led to delays in tapping farming opportunities in Indonesia.

Last year, Saudi Arabia’s Bin Laden Group stalled plans for a $4.3 billion project to develop two million hectares of land in Indonesia. Suswono said the project has not materialized yet.

The minister said there were no Gulf Arab firms yet operating in Indonesia, but expressed hope that his visit to Saudi Arabia would change that.

“We still have some problems when it comes to arranging land for large-scale farming, which is a major sticking point when it comes to foreign investors. This is due to the environmental regulations in place to protect our rain forests,” the minister said. He added that the government had issued regulations that would hopefully ease the way for investment in large-scale farming.

Last week, changes were announced to the “negative investment” list of sectors off-limits to investors from overseas.

One major change touted by Suswono on his trip is that foreign investors will now be allowed to have a maximum ownership of 49 percent in plantations producing staple foods.

Indonesia needs billions of dollars in investment to support its target of 7 percent economic growth by 2014.

During his weekend meetings, Suswono also revealed that Indonesia expected a 6 percent rise in its milled rice harvest this year, leading to a surplus of 2 million tons.

The country is expected to produce 37 million tons of milled rice this year, which exceeds the 35 million tons required to satisfy domestic demand.

Suswono’s estimate was a substantial increase on a National Statistics Agency (BPS) prediction at the start of the year that the country would produce 60 million tons of unhusked rice, which would be processed into 33.6 million tons of finished rice.

The deputy agriculture Minister last month confirmed Indonesia would not import rice this year because of adequate stocks.

The government has pledged to increase the annual production of food by 2014, including specific targets to increase annual rice production from the current 67 million tons of unprocessed paddy to 76 million tons.