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Government Pledges to Aid Fishing Industry


Saturday February 03, 2007

The government has pledged to help revive the country’s sea fishing industry by providing more cash collateral this year to boost fishermen's access to bank loans, reported Indonesia’s Trade and Investment News published by the Coordinating Ministry for the Economy.

Fisheries Minister Freddy Numberi said Monday (15/1/07) his department would disburse Rp173 billion (about $19.2 million), or double last year's total, in cash-collateral credit to more than 5,000 traditional fishermen this year.  The scheme will be managed by state-owned lender Bank Rakyat Indonesia (BRI).

 "We've found that BRI's non-performing loans for fishery are less than 1%.  This is positive.  We will continue disbursing loans to fishermen," Numberi was quoted as saying by The Jakarta Post.

BRI director for small and medium enterprises, Sulaiman Arief Arianto, said credit released to the sea fishing industry accounted for only 1.6% of the bank's agriculture credit, which made up 40% of its portfolio.

Bank Indonesia (BI) data show that loans to the agriculture sector accounted for only 5% of national banking credit.  Most of the funds deposited in banks went to the industrial and trade sectors, accounting for 23% and 20%, respectively.

Arianto said most fishermen are not accustomed to banking requirements and few, if any, collateral companies are willing to invest in the high-risk industry due to its dependence on nature.  "Most of them are not bankable but are actually quite feasible," he said.

The bank itself is ready to extend loans of some Rp200 billion to the sea fishing industry this year.  With the new funds, the government expects to focus on boosting the production of shrimp, tuna and seaweed.

Last year, Indonesia exported 169,581 tons of shrimp worth about $1 billion, an increase from 153,906 tons in 2005.  It is now the largest shrimp exporter to Japan and the second largest to the United States.

The total production of seaweed in 2005 reached 910,636 tons and is expected to climb to 1 million tons in 2006.  Indonesia is the second largest seaweed exporter in the world after the Philippines.

Meanwhile, about 30% of the tuna imported by Japan, which consumes about 70% of the world's total tuna production, comes from Indonesia. "What a shame that the increase of revenue in the country's sea and fishery sector did not bring a significant contribution to the welfare of our fishermen," Numberi said.