ASEAN KEY DESTINATIONS
Indonesian ag sector to get Asian, Mideast investment
Asian and Middle East countries are predicted to dominate investment in the agricultural sector in Indonesia in the future, Deputy Agriculture Minister Bayu Krisnamurthi said.
The dominance of the U.S. and European investors in the sector meanwhile is expected to decline, he told Antara News.
"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 for example a CPO plant in other countries with raw materials coming from the country.
This strategy now has also been adopted by other countries such as 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.
Bayu said the government`s policies are supportive to investment development in the country such as the implementation of tariff for raw cacao exports to develop domestic downstream cacao industry.
He said the present value of investment in the agriculture sector in 2005-2009 reached Rp11.8 trillion consisting of domestic and foreign investment, rising from Rp2.3 trillion recorded in 2000-2004.
"The biggest investment still remains in the plantation subsector," he said.