Govt promises help for fishing industry

The Jakarta Post ,  Jakarta   |  Tue, 01/16/2007 4:15 PM  |  Business

Ary Hermawan, The Jakarta Post, Jakarta

The government has pledged to help revive the sea fishing industry by providing more cash collateral this year to boost fishermen's access to bank loans.

Minister of Maritime Affairs and Fishery Freddy Numberi said Monday the ministry would disburse Rp 173 billion (about US$19.2 million), or double last year's total, in cash-collateral credit to more than 5,000 traditional fishermen this year.

The scheme will be managed by state-owned lender Bank Rakyat Indonesia (BRI).

""We've found that BRI's non-performing loans for the fishery are less than 1 percent. This is positive. We will continue disbursing loans to fishermen,"" Freddy said of the government's decision to use BRI.

Sulaiman Arief Arianto, BRI director for small and medium enterprises, said credit released to the sea fishing industry was only 1.6 percent of the bank's agriculture credit, which accounted for 40 percent of its portfolio.

""The figure is still pretty low,"" he added.

Bank Indonesia data shows that loans to the agriculture sector accounted for only 5 percent of national banking credit. Most of the funds deposited in banks went to the industrial and trade sectors, accounting for 23 percent and 20 percent respectively. (see table)

Arief said most fishermen were not accustomed to banking requirements and few, if any, collateral companies were willing to invest in the high-risk industry due to its dependence on nature.

""Most of them are not bankable but are actually quite feasible,"" he said.

The bank itself is ready to extend loans of some Rp 200 billion to the sea fishing industry this year.

With the new funds, the government expects to focus on boosting the production of shrimp, tuna and seaweed.

Last year, Indonesia exported 169,581 tons of shrimp worth about $1 billion, an increase from 153,906 tons in 2005. It is now the largest shrimp exporter to Japan and the second largest to the U.S.

The total production of seaweed in 2005 reached 910,636 tons and is expected to climb to 1 million tons in 2006. Indonesia is the second largest seaweed exporter in the world after the Philippines.

Meanwhile, about 30 percent of the tuna imported by Japan, which consumes about 70 percent of the world's total tuna production, comes from Indonesia.

""What a shame that the increase of revenue in the country's sea and fishery sector did not bring a significant contribution to the welfare of our fishermen,"" Freddy said.

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