INDONESIA REJECTS WORLD BANK FARM REFORM IDEAS
  Indonesia rejected World Bank
  recommendations for sweeping reforms to its farm economy, as
  the country's foreign aid donors met to consider giving it 2.5
  billion dlrs in grants and soft loans.
      Agriculture Minister Achmad Affandi, in written remarks
  distributed today as Indonesia's 14 foreign donor nations met
  at The Hague, said, "The general argument presented by the Bank
  for this free trade, open economy view is weak."
      The Bank called for overhauls in how Indonesia manages the
  largest farm area in South-east Asia, and said agricultural
  growth was stagnating under subsidies for rice farming.
      The Bank report said Indonesia's rice production had peaked
  and the subsidies are a waste of money.
      Affandi replied that rice is the main staple and provides
  an income for 17 pct of the workforce. The subsidies were
  needed to support the fertilizer industry, including importers,
  exporters, producers and distributors, he said, as well as
  assisting in small part the majority of Indonesian farmers.
      Affandi agreed with a bank recommendation that farmers
  should be free to choose their own crops, but he said the
  government would continue to maintain production targets for
  "strategic commodities" such as rice and sugar.
      The Bank report was especially critical of Indonesia's
  drive to plant sugar, saying domestic sugar prices are double
  the world average because of inefficiencies, and the country
  would save money by importing the commodity.
      However, Affandi said volatile world sugar prices, the need
  to save foreign exchange and an already up-and-running sugar
  industry were good arguments for continuing the sugar drive.
      He also said import barriers and trade monopolies in the
  agricultural sector were needed to help domestic industry
  develop and because of "over-production and price intervention
  in the developed nations."
  

