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Jakarta, 27 February 2006
Japan’s Grant Aid for Indonesian Farmers

1. The Japanese Government has decided to extend a total amount of up to 380 million Yen (approx.USD3.55 million or RP28.3 billion) grant aid to the Indonesian Government for supporting Indonesia’s effort to increase food production and to reduce poverty in agriculture sector. The diplomatic notes on this grant aid were signed between H.E. Mr.Imron Cotan, Secretary General, Department of Foreign Affairs and H.E. Mr. Yutaka Iimura on February 27th, 2006 in Jakarta. This grant aid is entitled “Grant assistance for underprivileged farmers”, which is called as “Second Kennedy Round (2KR)” assistance.

2. Currently the Indonesian Government is strengthening its effort to promote well-balanced usage of good quality fertilizers among farmers in order to increase productivity of rice which is the staple food in Indonesia. Under this Japanese grant aid, it is designed to assist the Indonesian Government in purchasing MOP (fertilizer of potassium chloride) which could not be procured in Indonesia, thus contributing to the improvement of rice productivity and the increase of farmers’ income mainly in poor agriculture areas through distribution of good quality and relatively inexpensive fertilizers and through introduction of a model method of using fertilizers. It is also designed to utilize the counterpart fund, which would be accumulated through selling MOP in the domestic market, for supporting small scale farmers and for alleviating poverty in rural areas.

3. Poverty alleviation has been one of the major directions in Japan’s Official Development Assistance Strategy to Indonesia, and the Japanese Government has been mobilizing its ODA scheme, mainly through grant aid, to support the Indonesian Government’s effort to reduce poverty for many years. As one of the largest partners in development cooperation to Indonesia, the Japanese Government is determined to closely collaborate with the Indonesian Government in achieving poverty reduction.