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Staple food holding firm still far from boosting investment: Experts
Experts say the government’s ability to create a competitive holding company would determine whether or not it could help attract investment in the agriculture industry.
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Farmers have a meeting beside an irrigation channel in Yogyakarta on Jan. 29, 2009. The country needs higher agriculture investment to modernize the industry such as by building infrastructure, introducing new technology and training farmers in new methods. (Courtesy of Asian Development Bank)
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n upcoming state-owned staple food holding company is hoped to help boost agriculture industry investment in the medium to long term but experts say this critically hinges on the government’s ability to create a competitive company.
Nine state-owned enterprises (SOEs) plan to consolidate into the holding company under diversified food manufacturer PT Rajawali Nusantara Indonesia (RNI) by the third quarter of this year. The enterprise aims to improve Indonesia’s food security, farmers’ welfare and the agriculture industry’s modernity, which requires attracting investment.
Adhi Lukman, the chairman of the Indonesian Food and Beverage Producers Association (Gapmmi), said investors needed a clear roadmap over the holding company’s future business plan, including the specific role of each stakeholder, and needed to see that the company could sustain its operations.
“To achieve sustainability, the government needs to ensure that the staple food holding company is gradually synchronized with market mechanisms and not reliant on government policies,” he told The Jakarta Post on Wednesday.
Read also: State-owned staple food holding company to be formed by September
Attracting investment is key to modernizing Indonesia’s agriculture industry such as by introducing new technology, new farming methods and building related infrastructure.
Despite being an agriculture powerhouse, Indonesia has seen productivity decline for some crops, including the country’s main staple, rice, with productivity dropping 1.74 percent to 5.65 tons per ha in 2019 from 2018, according to data from Statistics Indonesia (BPS).
