KUR disbursement should target boosting scale of farmers' businesses

KUR disbursement should target boosting scale of farmers' businesses

Coordinating Minister for Economic Affairs Airlangga Hartarto. ANTARA/Coordinating Ministry for Economic Affairs/pri.

Jakarta (ANTARA) - Disbursement under the microcredit program (KUR) should be utilized to boost the scale of farmers' businesses, from production to post-harvest, Coordinating Minister for Economic Affairs Airlangga Hartarto emphasized.

"The KUR disbursement should also be encouraged in developing a wider economic scale. Farmers are able to purchase, for instance, rice milling units. Ecosystems of farmers and fishermen can be formed," Hartarto stated during an online press conference in Jakarta, Tuesday.

Increasing the scale of farmers’ businesses is the goal for economic activities, such as corporations by farmers.

Hartarto remarked that KUR can also increase the farmers' capital in order to expand the market reach of their agricultural products.

Additionally, farmers are encouraged to capitalize on the cooperation with start-up companies to market their products.

"Farmers can be connected or linked to technology companies, such as Sayurbox or Tanihub," Hartarto noted.

The minister stated that companies, such as PT Permodalan Nasional Madani (Persero), offering financing to farmers also need to offer guidance apart from distributing credit at low interest rates.

"This also applies to the rice milling unit model in Demak, Central Java, for rice. These one to two business models are expected to be emulated in other areas," the senior minister noted.

At the meeting, President Joko Widodo reminded that the corporate business model for farmers and fishermen in the field had run far from optimally.

To this end, the ministries should focus on building one to two business models for farmers and fishermen in one province to be emulated in other provinces.

"I see that the on-field implementation of the farmers’ and fishermen’s corporate model has not been optimal," President Widodo stated at the Bogor Presidential Palace, West Java, on Tuesday.

The head of state believes that the formation of a corporate business model for farmers and fishermen aims to boost the living standards of farmers and fishermen and to realize economic transformation.

The head of state also appealed to state and regional enterprises as well as private companies to stand by farmers’ and fishermen’s corporations to assist them in establishing a healthy business model.

"State-run and private companies as well as regional-owned enterprises not only played their role as offtakers but also stood by them – farmers’ and fishermen’s corporations -- until a business model can be established and run well. We do not have this yet," Jokowi remarked.

The president spoke of having ordered his aides few years ago to take a cue from Malaysia's Federal Land Development Authority (FELDA) and Spain's cattle cooperative.

FELDA is a Malaysian government agency founded to handle the resettlement of rural poor to newly developed areas and to organize smallholder farms growing cash crops.

The president believes it would not be difficult to emulate such a good model of agencies.
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