Head of Research Center for Indonesian Policy Studies (CIPS) Felippa Amanta said, the ratification of the Omnibus Law on the Job Creation Act opens opportunities for increased foreign direct investment (FDI) in the agricultural sector, such as in plantations, livestock, and horticulture. The opportunity to increase investment in this sector is expected to have a positive impact on the welfare of farmers in the country and increase domestic agricultural production.
The agricultural sector is one of the sectors that grew positively during the COVID-19 pandemic. However, the welfare of farmers and the efficiency of the agricultural sector in the country are still far from expectations."The entry of investment can help form a resilient and sustainable agricultural sector by funding research and development, technology, and developing the capacity of community resources," Felipa said in a written statement, Jakarta, Wednesday (7/10/2020).
The opening of opportunities for agricultural investment can be seen from several changes, such as the removal of PMA restrictions in horticultural commodities (Law no. 13/2010) which was previously limited to 30% and also in plantation commodities (Law no. 39/2014). In addition, the Cipta Kerja Omnibus Law will also encourage plantation product processing businesses through easy access to raw materials because it eliminates the minimum requirement of 20% of raw materials from self-cultivated plantations. Business licensing is also facilitated through the central government.
"These changes are ideally responded to positively by entrepreneurs and agricultural workers in Indonesia because the entry of investment will open up jobs, opportunities to learn new technology and knowledge and also open up export opportunities. However, this investment invitation must ensure a process of technology and knowledge transfer so that Indonesian workers can also benefit from investors and also comply with applicable labor regulations and ensure environmental protection, "he asserted.
