Poverty Watch: Govt doles out loans for farmers

The government recently launched a credit scheme for farmers, cooperatives and local cattle breeders in Malang, East Java.

The launch was marked by the signing of loan agreements and the handing over of loan approval letters for Rp 93.3 billion (US$10.05 million) from banks to borrowers.

Agriculture Minister Suswono said the credit scheme for cattle breeders was part of the government’s overall program to boost the country’s heads of cattle to 14.4 million by 2014.

The government expects to reach 12.8 million by the end of 2010.

“The country’s annual beef production comes from around 200,000 heads of beef cattle, so this is a challenge for us,” Suswono said on the sidelines of the event at the Artificial Insemination Center in Singosari, Malang regency.

“Under this new credit scheme, we’re looking to boost cattle numbers and hence beef production.”

The money is channeled through banks, which then provide loans to farmers and breeders.

The minister also used the event to call public attention to another credit scheme, this one to bolster self-sufficiency in food and energy.

The fund for the project is Rp 8.14 trillion, 30 percent of which was disbursed last year.

The government has long raised concerns about the high numbers of cattle being imported into the country, up to 630,000 animals a year.

Suswono said the government’s cattle self-sufficiency program had drawn responses from various parties, including Australian Ambassador to Indonesia Bill Farmer.

“The Australian ambassador has expressed hope that cattle imports from Australia can be maintained, but I told him Indonesia would still make efforts to achieve cattle self-sufficiency by 2014,” Suswono said.

With a population of 230 million people that is growing at 1.15 percent a year, Indonesia needs huge food supplies, the minister said, including that of beef, which had not been adequately met.

Local breeders can only meet 60 percent of the domestic demand for beef, although annual consumption is less than seven kilograms per person, compared to Malaysia’s 30 kilograms.

The same is also true of domestic dairy demand. Local dairy farmers are only able to meet 26 percent of domestic demand, leaving the lion’s share to be imported.

East Java contributes 76 percent to the national dairy output.

East Java Deputy Governor Saifullah Yusuf said people in the province should take full advantage of the credit scheme.

“We expect the cattle population to grow from 2.38 percent in 2009 to 6.8 percent this year, for a target of around 5.27 million heads of cattle by 2014,” he said.

East Java is the nation’s livestock hub, meeting 25 to 30 percent of national demand.

Loan recipient Fuad Ardiansyah, manager of the Sekar Tanjung Dairy Farmers Cooperative (KPSP) in Pasuruan, East Java, lauded the government’s policy.

“With low interest rates, the loans will be a great help to farmers,” he said.