Uptake of Credit for Agriculture is Still Low

Uptake of Credit for Agriculture is Still Low – Uptake credit business people in the agricultural sector is still small. Credit is absorbed does not meet the set target of 25 percent of the total loan funds.

“When our people gelontorkan business loans of Rp 20 trillion per year, and we set a 25 per cent must be in the forestry sector, namely agriculture, fisheries, holtikura, and so on. Apparently the target of 25 percent is less than 20 percent (absorbed),” Coordinating Minister for Economic Affairs said Hatta Radjasa, in a food coordination meeting “Indonesia Feed Feed The World II,” at the Hotel Nikko, Jakarta, Tuesday, July 26, 2011.

He said a number of things can cause, among others, lack of socialization. “(Cause) that the two might be too heavy to say the level of its economic scale business loans of the people,” he added.

In addition, he mentions of total bank lending amounted to Rp 1750 trillion only 2.2 percent is given to agriculture and fisheries.

As a solution, he said, have encouraged the growth of microfinance institutions that are legal entities that the corporation atapun BPR (BPR). He also emphasized that access to banking institutions should be improved. This is to increase agricultural production.

Keep in mind, as it was reported that the limited budget resources to be one cause of failure of food policy.

Farmers bear most of the cost of rice production. This is shown by the total business cost of Rp 94.5 trillion, the government only provides funding amounting to Rp 38.2 trillion. Funding is provided in the form of subsidies on fertilizers, seeds, food security and energy credits, and irrigation financing.

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