January 22, 2011

Indonesia to compensate farmers for failed crops

The Indonesian government will compensate farmers whose crops have failed because of extreme weather or insect attacks, Vice Agriculture Minister Bayu Krisnamurthi said on Friday (Jan 21).

Prolonged wet weather this year has reduced the production of Indonesia's key crops and forced Southeast Asia's biggest economy to import rice and white sugar to meet domestic demand and help reign in inflation.

"The money is to help cover costs, particularly labor costs, and it will be given to farmers that plant food crops, particularly rice," said Krisnamurthi.

The government will provide IDR2 trillion (US$220 million) to farmers which will be taken from the government's emergency fund, he said.

Krisnamurthi did not give details on how much affected farmers would receive, but an official at the ministry said the government may give between IDR1.8-2 million (US$198-US$221) for each hectare of failed paddy.

Indonesia has 13.2 million hectares of paddy, state statistics showed.