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Jakarta, 15 February 2008
Japan’s Grant Aid (approx. USD 3.92 million) for Indonesian Farmers

1. The Japanese Government has decided to extend a grant aid totaling up to 420 million Yen (approx. USD 3.92 million or RP 36.1 billion) to the Government of Indonesia (GOI) for supporting its effort to increase food production and to reduce poverty in rural area. The diplomatic notes for this grant aid were signed and exchanged between H.E. Mr. Shin Ebihara, Ambassador of Japan to the Republic of Indonesia and H.E. Mr. Imron Cotan, Secretary General, Department of Foreign Affairs in Jakarta on February 15, 2008. This grant aid is titled “Grant Assistance for Underprivileged Farmers”, which is generally known as “Second Kennedy Round (2KR)” assistance.

2. Enhancing rice productivity and thereby ensuring stable supply of rice is essential for food security in Indonesia. To this end, GOI has been strengthening its effort to promote well-balanced distribution of quality fertilizers among farmers. In order to further extend this activity, GOI requested the Government of Japan (GOJ) 2KR assistance for purchasing MOP (fertilizer of potassium chloride), which cannot be procured in Indonesia. The MOP provided with this 2KR assistance is planned to be sold at a low price to poor farmers. “Counterpart Funds” accumulated through the sale of the MOP is utilized for the support of small-scale farmers and poverty reduction. Japan expects this 2KR assistance will make a substantial contribution to increasing agricultural production and income of small-scale and poor farmers.

3. The Millennium Development Goals (MDG) including poverty alleviation has been one of the major pillars in Japan’s Official Development Assistance Strategy to Indonesia. As the single largest donor country partner to Indonesia, GOJ is committed to continue to support GOI’s development efforts.

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