Indonesia suggests soy purchasing price to bolster output

 

 

Indonesia plans to apply government purchasing price for soy as an incentive for the commodity.

 

The plan, aims at serving as a price buffer, especially during post-harvest time, is coined following the government's ambition to bolster soy production by at least 20% in 2010.

 

Minister of Agriculture Suswono confirmed the incentive plan had been suggested to the House Commission IV. "Without incentives for farmers, it will be difficult to bolster domestic soy production due to low productivity," he said.

 

Suswono argued the government purchasing price policy was supposed to be able to be applied to soy, so that farmers would have certainty in terms of sale price.

 

He calculated the basic price feasible for soybean at the time was 1.5 times of rice price, so that soy price would be attractive financially to motivate farmers to plant soy.

 

Meanwhile, Chairperson of the Indonesian Soybean Board Benny A. Kusbini viewed soy price could be 1.5 times higher than rice price.

 

Kusbini said the existing old soy investors had injured farmers by flooding the market with imported soy during harvest time, thus, slumping soy price in the market. He noted that permitting Bulog to import soy was the only effective way to stabilise soy price on farmer level.

 

Additionally, the government should provide farmers with other incentives, such as fertiliser subsidy, seed subsidy, easier access to banking loans, land availability, and infrastructure.

 

He explained farmers all this time had been reluctant to plant soy due to limited land area and insufficient infrastructure.

 

On the other hand, he continued, partnerships between farmers, cooperatives, and industries had not run optimally. As a result, he added, it had become harder for the government to reach soybean self-sufficiency.

 

Also, Suswono exposed the Ministry was seeking a solution to bolster national soy production despite the fact the areas to plant the commodity had alternately been planted with other commodities, such as corn and paddy.