T

he government is aiming to lure foreign investors to develop agricultural fields and farms outside Java, given the '€œinsignificant'€ foreign contributions to total investments in the sector.

According to Agriculture Minister Suswono, who cited Investment Coordinating Board data, domestic investment in the agricultural sector reached Rp 32.06 trillion (US$2.92 billion) between 2008 and 2012, or 12 percent of the total investment figures during that period, while foreign investment in the same sector made up $3.58 billion, or 4.17 percent of the total, during the same period.

'€œI, however, think that current foreign investment does not reflect Indonesia as an agricultural country,'€ he said on Monday at an event to introduce local potentials to foreign diplomats.

He said that with 14.4 percent, the agricultural sector was the second-largest contributor to the country'€™s gross domestic product (GDP) last year after the services and industry sectors.

Land procurement, social security, local regulation uncertainty, lack of data and promotion, had traditionally hindered investors, in addition to poor infrastructure, such as irrigation and transportation.

'€œWe will focus on improving infrastructure, mainly irrigation, to stream investment into the sector,'€ Suswono said.

The minister previously said 48 percent of the country'€™s irrigation system was in poor condition and that the government needed at least Rp 21 trillion to fix it. The ministry has allocated Rp 6 trillion '€” or 35 percent out of its annual budget of Rp 16 trillion '€” this year to rehabilitate the system, with works expected to be completed within four years.

Agriculture Ministry data shows that 13 domestic and foreign companies have proposed to invest in a food estate in East Kalimantan. Among the companies is South Korea-based PT Harim, which has planned to develop a corn plantation and cattle farm on a total of 11,000 hectares of land.

The East Kalimantan food estate project, launched by the government, emerged after the government, which is aiming for national food sufficiency, failed to realize its project on the Merauke Integrated Food and Energy Estate (MIFEE) in Papua, after the area was reduced from 1 million to 200,000 hectares due to land and security issues there.