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  • Indonesia Should be Sugar Self Sufficiency Now

Indonesia Should be Sugar Self Sufficiency Now

  • 14 July 2010, 17:15 WIB
  • By: Marwati
  • 12662
  • PDF Version


 

Sugar self-sufficiency policy is a policy that can not be compromised anymore for quick implementation in Indonesia. The reason is that the national consumption still depends on imports because domestic production has not been able to meet the needs. The policy is made by fixing the price of domestic sugar that can encourage producers to increase production.

"Price establishment that stimulatesproducers is conducted by implementing protective policy  imported sugar tariffs. This policy will further be accelerative when combined with input subsidy policies and sugar pro-venue pricing," said Drs. Augustinus Suyantoro, M.S, in the open examination under the title Strategies of Indonesian Sugar Industry World Trade Liberalization" at Universitas Gadjah Mada, Monday (12/7).

According to Agustinus, the result of import tariff can be used to develop sugar industry  both through input subsidies and the revitalization of sugar mills. Providing input subsidies will provide additional benefits to producers due to the decreasing cost of production. While the revitalization of sugar mills will increase efficiency at the factory so that production will increase along with increasing sugar yield.

Regarding protective policy and input subsidy on the sugar industry, the lecturer of Faculty of Economics UNS said that in the long term it will affect negatively on productivity and competitiveness. Therefore, this policy is not  a permanent policy in the long term. "The policy should be accompanied with policies related to productivity and competitiveness. This can be done by phasing in the implementation of those policies," he explained.

Protection policy by adding  sugar import tariff by 30% affects the domestic sugar price, production, and in the long term results in higher sugar price of 332.24% (IDR 1886.03), increasing sugar production as 32.25% (419.28 thousand tons), followed by a decline in consumption by 0.59% (3.84 thousand tons).The imposition of tariffs on imported sugar, community will have an irreplaceable loss of a rising increase in dead weight loss amounting to 395.3956 billion in the long term. "This loss is not replaceable and will be born by society," he explained.

 

Further the husband of Sri Sumarsih Florentikna, SE, described that Indonesian sugar industry is not a single business  in which the producers of raw materials (sugar cane) and sugar cane processors into a different sugar. This condition implicates on different objectives and motives between cane farmers and sugar mill as an institution for processing sugar cane into sugar. Seeing this condition, a comprehensive policy is needed in order to be translated by the economic players in the sugar industry as a whole.

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