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