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Cablegate: Agriculture Policy Change or Wishful Thinking?

VZCZCXRO4973
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #1125 1620458
ZNR UUUUU ZZH
R 100458Z JUN 08
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 9242
RUEATRS/DEPT OF TREASURY WASHDC
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHKO/AMEMBASSY TOKYO 2083
RUEHBJ/AMEMBASSY BEIJING 5124
RUEHBY/AMEMBASSY CANBERRA 2624
RUEHUL/AMEMBASSY SEOUL 4666
RUEHML/AMEMBASSY MANILA 3226
RUEAIIA/CIA WASHDC

UNCLAS JAKARTA 001125

SIPDIS
SENSITIVE

DEPT FOR EAP/MTS AND EB/IFD/OMA
TREASURY FOR IA-SETH SEARLS
COMMERCE FOR 4430/KELLY
DEPARTMENT PASS EXIM BANK
SINGAPORE FOR SBAKER
TOKYO FOR MGREWE, AG MIN COUNS BERMAN, AYALA
MANILA FOR AG COUNS PURDY, ATO VOBRIL
USDA/FAS/OA YOST, MILLER, JACKSON
USDA/FAS/OCRA CRIKER, HIGGISTON, RADLER
USDA/FAS/OGA CHAUDRY, DWYER, HOUSE
USTR WEISEL, EHLERS

E.O. 12598: N/A
TAGS: EFIN EINV ECON EAGR ETRD ID
SUBJECT: Agriculture Policy Change or Wishful Thinking?

REF: (A) STATE 52628 (B) STATE 53346 (C) STATE 53353 (D) TATE 56852

1. (SBU) Summary. Emboffs met with Dr. Bayu Krisnamurthi, Deputy
Minister (Agriculture and Marine Affairs) from the Coordinating
Ministry for Economic Affairs on 5 June to discuss the three
previously delivered Aide Memoires on agriculture (Ref A,B,C).
Emboffs and Dr. Krisnamurthi discussed a wide range of issues,
including biotechnology, shortages of human capital in the
Indonesian agriculture sector, and the mechanics of Government of
Indonesia (GOI) purchases of Japanese-held rice stocks (Ref D).
Although Dr. Krisnamurthi prefaced many of his comments as his
personal views, it appears that support for a shift in Indonesian
agricultural policy may be increasing. End Summary.

Biotechnology
-------------

2. (SBU) In discussing the Aide Memoires (Ref A,B,C), the Deputy
Minister noted that he was presenting his personal views rather than
GOI policy positions. On the issue of biotechnology, Dr.
Krishamurthi noted that increased use of biotechnology in Indonesian
agriculture is a matter of "how" not if. The Deputy Minister
explained that, in his view, Indonesia should encourage investment
by transgenic seed producers, rather than "just importing" the
product in order to improve productivity in the sector. [Comment:
Such investment will not be forthcoming unless the GOI develops a
workable framework for approval and certification of transgenic
products, a policy process that has languished for four or five
years. End Comment.] Dr. Krisnamurthi understands the limitations
of Indonesia's investment climate and has discussed the issue in
depth with Monsanto representatives based in Jakarta and in
Singapore.

Human Capital Needs in Agriculture
----------------------------------

3. (U) The Deputy Minister voiced concern about the dearth of highly
qualified agriculture specialists in Indonesia. He noted that many
of the leading local experts in agriculture had pursued graduate
study in the US, funded by the USG. Emboffs provided current
educational opportunities in the US for Dr. Krisnamurthi's
consideration, including Fulbright scholarships tied to PL 480
agreements that the USDA provided in the wake of the Asian financial
crisis. Emboffs noted that the GOI has never tapped this
opportunity.

Japanese Rice: Awaiting Trade Minister's Go Ahead
--------------------------------------------- ----

4. (SBU) The Deputy Minister was aware of the USG acceptance of a
plan for Japan to release Market Access Stocks (MAS) of rice (Ref
D). He noted that it is the Trade Minister's role to give the
signal for the National Logistics Bureau (BULOG) to move ahead with
rice purchases. Dr. Krisnamurthi confirmed that local discussions
with representatives of the Japanese Embassy are occurring on the
subject. Furthermore, he noted that the GOI has approached the
issue by pointing out to the Government of Japan (GOJ) that purchase
of MAS rice relieves the GOJ of storage costs, and will provide a
significant public relations boost for the Japanese, particularly
the GOJ executes the transactions prior to the G8 Summit in Japan in
July.

Hume

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