Asia and Middle East to dominate investment in Indonesian agriculture

Asian and Middle East countries are expected to dominate investment in the agricultural sector in Indonesia in the future, Indonesia's Deputy Agriculture Minister Bayu Krisnamurthi said.

 

The dominance of the US and European investors in the sector meanwhile is expected to decline. "The demand for agricultural products in Asia and in the Middle East in the future will be bigger than in Europe," he said.

 

Several countries in Asia seem to be ready to dominate investment in the sector, he said referring to Singapore and Taiwan.

 

Indonesia`s investment in the sector abroad meanwhile was showing encouraging growth in China and Africa, he said. "Indonesia's investment abroad is mostly done through a trading pattern," he said.

 

He said through a trading pattern national investors develop a processing plant such as a CPO plant in other countries with raw materials coming from the country. This strategy now has also been adopted by other countries including Malaysia, he said.

 

Regarding agricultural activities to be developed for investment in the country, Bayu said the ministry of agriculture and the Capital Investment Coordinating Board (BKPM) had agreed to develop activities that do not need vast land such as animal husbandry.

 

Focus meanwhile is also put on industrial or investment clusters for the development of seedlings industry.

 

He said the present value of investment in the agriculture sector in 2005-2009 reached IDR11.8 trillion (US$1.3 billion), consisting of domestic and foreign investment, rising from IDR2.3 trillion (US$251 million) recorded in 2000-2004.

 

"The biggest investment still remains in the plantation sub-sector," he said.