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I

AGREEMENT
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND

THE GOVERNMENT OF THE UNITED STATES OF AMERICA
FOR THE SALE OF AGRICULTURAL COMMODITIES

AGREEMENT
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND

THE GOVERNMENT OF THE UNITED STATES OF AMERICA
FOR THE SALE OF AGRICULTURAL COMMODITIES

The Government of the Republic of Indonesia and the
\

Government of the United States of America agree to
the

sale

below.

of

agricultural

commodities

specified

This Agreement shall consist of the Preamble

and Parts I

and III of the Agreement

signed Decem-

ber 2, 1980, together with the following Part II:

Part II .

Item I .

PARTICULAR PROVISIONS:

Commodity Table:

Supply Period
Commodity

Wheat

Approximate

Maximum Export

Quantity

Market Value

(U.s . FY)

(MT)

(Million US Dollars)

1985

250,000

40.0

- 2 -

Item

II .

Payment

Terms:

Convertible

Local

Currency

Credit ( CLCC) :

(A)

Initial payment - ten (10) percent .

(B)

Currency use payment -

ten

( 10) percent for

Section 104(A) pur poses .
(C)

Number of

installment payments -

twenty-six

(26).
(D)

Amount of each installment payment - approxi-

mately equal annual amounts .

'

(E)

Due date of the first

installment payment -

five (5) years after date of last delivery of the commodity in each calendar year .
(F)

Initial interest rate - two (2) percent.

(G)

Continuing interest rate - three (3) percent.

Item III .

Usual Ma r keting Table :

Import Period
Commodity

Wheat

(u . s .

FY)

1985

Usual Marketing Requirement
(Metric Tons)

1,291,000

-

Item IV.

3 -

Export Limitations :

(A)

Export Limitation Period:

The

Export

States Fiscal

Limitation

Year

Period
or

1985,

States Fiscal Year during
anced

under

this

any

which

Agreement

are

shall

be

United

subsequent

United

the

commodity

being

fin-

imported

or

utilized.

\

(B)

Commodities

to

which

Export

Limitations

Apply :

For the purposes of Part I, Article III A (4) of
this Agreement,
ported are:

the commodities which may not be ex-

wheat,

wheat flour,

rolled wheat,

semo-

lina, farina and bulgur (or the same products under a
different name) .

Item

v.
(A)

Self-Help Measures:

The Government of the Republic of Indonesia

agrees to undertake self-help measures to improve the
production, storage, and distribution of agricultural
commodities.

The

self-help measures

. --· --· . .

shall

be

ｩｊｕｰｬＮｾ

Ｍ

.-

- 4 -

mented to contribute directly to development progress
in poor rural areas and enable the poor to contribute
actively

in

increasing

agricultural

production

through small farm agriculture .

(B)

The Government of the Republic of Indonesia

agrees to undertake the following activities and
doing

so

to

provide

adequate

financial,

in

technical,

and managerial resources for their implementation :

1.

PADAT KARYA GAYA BARU PROJECT

Objectives :

(1)

To

provide

opportunities

and

increase farm family income and welfare through

in-

creasing participation of rural people in rural

in-

frastructure

the

development,

job

and

( 2)

to

speed

up

operation of the Labor Intensive Technology Research
and

Training

Center

in

Jakarta

and

its

satellite

centers in Bangsri and Subang .

Benchmarks:

Project

activities

under

the

Directorate

Labor

and

Self-Employment,

Manpower

Development

Manpower, include:

of

and

to

be

Development
Directorate

Placement

of

carried
of

out

Intensive

General

of

Ministry

of

- 5 -

The

( i)

kilometers

rehabilitation

drainage systems in

West and Central Java,
tral

of

Java .

approximately

361

the northern part of

and the southern part of Cen-

Level of effort

will

be

1, 625,000

man-

days;

( ii)

The

(1,015 Km),

rehabilitation
tertiary

of

village

irrigation canals

access
(270

roads

Km)

and

flood control canals (30 Km) scattered throughout the
provinces

of

East

Sumatra .

Level

Java,

of

South

effort

Sulawesi,

will

be

and

about

North

5, 500,000

man-days;

(iii)

The

procurement

the operation of

of

the Labor

five

trucks

to

support

Intensive Technology Re-

search and Training Center in Ciracas (3 trucks),
satellite centers in Bangsri

the

(1 truck) and Subang (1

truck) ;

(iv)
water

The rehabilitation and upgrading of existing
reservoirs

and

water

ponds

in

South

Gunung

Kidul which will relieve peasants of drinking

water

problems during the dry season .

Completion of all activities
nesian

FY

1985/86.

is scheduled

Approximately

for

US$10.4

Indo-

million

- 6 -

will

be

allocated

from

sales

proceeds

under

this

the

rural

Agreement to cover costs of this project .

2 . APPLIED AGRICULTURE RESEARCH PROJECT

Objectives :

To

improve

the

welfare

of

population through the assistance to agricultural research by building

facilities,

procuring

equipment,

improving the capabilities of the staff through short
term training, and provision of technical assistance
to

one

Central

I nstitutes,

Research

Institute,

three

ten Research Sub-stations and

Research
three Ex-

perimental Farms.

Benchmarks :

At

Agriculture

Research

19

different
Project

buildings and developing
research will

locations

the

take place .

is

the

Applied

constructing

farms

where

This wil l

the

result

400
field

in the

provision of improved technologies to farmers in many
different agroclimatic zones .

During 1985/86 the following project activities have
been planned by the Project Unit :

(i)

continuation

of

short

term

t r aining

and

technical assistance programs to increase the capac-

-

7 -

ity of the AARD staff to carry out agricultural research;

(ii)

completion

of

the

construction

program

at

the procurement

program

to

the 19 locations;

(iii)

continuation of

provide field and laboratory equipment to the institutes,

sub-stations

and

farms

for

improving

the

capacity to do research;

(iv)

continuation

and

substantial

expansion

of

the farm development program at each of the 19 locations .

Approximately US$5 . 0 million will be earmarked from
sales proceeds under the Agreement to cover the cost
of the construction and farm development at

the 19

locations .

3 . SUMATRA AGRICULTURAL RESEARCH PROJECT

Objectives:

To expand the research capacity of the

Agricultural Research Institute

in Sumatra and con-

tribute to the welfare of the people .

- 8 -

Benchmarks:

The development and improvement of the

network

research

of

institutions

in

the

Sumatra

regions, namely:

a.

One Institute at Sukarami (West Sumatra) .

b.

Five Sub-Institutes at Si tiung and Sumani in

West

Sumatra,

Ps

Miring

and

Brastagi

in

North

sumatra, and Kayu Agung in South Sumatra .

c.
Rambatan

Eight

Test

and

Farms

Sitiung

at

Sukarami,

(West

(South Sumatra), Ps Mirlng

Sumatra),

Bandar

Buat,

Kayu

Agung

(North Sumatra),

Larnpinung

(Aceh) and Tamanbogo (Lampung).

Other types of
include

activity which will be

completion

construction,

farm

of

the

final

development,

phase

carried
of

out

physical

and

procurement

the

sales

of

laboratory and field equipment.

Approximately

US$2 .0

million of

under the Agreement will be earmarked for

proceeds
this pro-

gram in order to complete the project as planned.

-

4.

9 -

IPB (BOGOR AGRICULTURAL INSTITUTE) OUTREACH
FOR OUTER ISLAND UNIVERSITY DEVELOPMENT

Objectives :

( 1)

To

increase

the capacity of outer

island universities to provide high quality instruction to graduates required for regional and national
agricultural

development,

and

(2)

to

develop

the

critical mass of staff needed to enable cooperating
universities

to

continue

staff

development

through

conventional methods.

Benchmarks:

IPB

will

develop

rapid

and

effective

programs to:

(i)

Strengthen institutional building in cooper -

ating universities through:

guidance

in

establishing

effective

aca-

demic analysis and planning procedures and in management information systems.
the development of strong Tridharma programs, with particular attention to curriculum evaluation and improvement;

(ii)

Develop

staff

in

agriculture

and

fields for cooperating universities through1

related

- 10 -

selection

and

training

of

80

new

staff

for the cooperating uni versities .
the

development

of graduate

programs

to

upgrade teaching and research skills .
an
the

extended curriculum which

will

allow

s.2 student to return to his/her p r ospective cam-

pus to practise teaching and conduct research for two
semesters during graduate training;

(iii)

'

Expand the teaching outreach of senior staff

of IPB through:
use of videotaped lectures
educational satellite instruction
use of half-time graduate assistants .

Approximately US$2. 0

million will

be allocated

from

sales proceeds under the Agreement for this project .

5.

KKN (KULIAH KERJA NYATA) PROJECT

Objectives :

(1) To enable the institution of higher

learning to produce graduates who will promote devel opment because they have experienced the very complex
problems
practical

faced
and

by

the

community ,

interdisciplinary

and

have

studied

ways

of

tackling

- 11 -

these

problems,

(2)

to

bring

the

institutions

of

higher learning closer to the community, and to adapt
higher education to the demands of development,

and

(3) to help the Government to accelerate the development process and form development cadres in the vil lages.

Benchmarks:

( i)
\

In the course of KKN activities:

the students not only learn from their ex-

perience

in

the

community by

adding

to

their

own

skills and knowledge, but also give practical help in
developing the areas they serve.

(ii)

Members of the community are seen not as ob-

jects of

study,

process .

The

but as partners

students

in the development

increase the community's de-

sire to work for development by forming links between
the community and other development agencies, and act
as innovators.

(iii)

Identification of the problems and location

of assignments are matters to be decided by the educational institution and the local government in cooperation .

- 12 -

(iv)

In

tackling

village

problems

each

student

works in cooperation with students from other disci plines .

(v)

The institution of higher education ' s

links

with the community are strengthened, and the curriculum

will

be

more

in

accordance

with

development

needs, because of the involvement of the leaders and
staff of the educational institution in KKN,
cause
\

of

discussions

between

students,

and be-

leaders

staff of institutions of higher education,

and

the local

government and the community.

Approximately
order

to

US$4 . 0

carry out

million
the

will

be

allocated

above-mentioned

in

activities.

During the 1985/86 period funds will be provided to
cover

living

cost,

equipment

approximately 20,000 students
sities

and

institutes)

doing

and

travel

for

the

(from 45 state univerfour

months

of

KKN

activities in villages throughout Indonesia.

6.

SCIENCE AND TECHNOLOGY RURAL DEVELOPMENT PROJECT

Objectives:

(1) To increase the capability of Indo-

nesian staff and institutions in scientific/technical

- 13 -

areas

critical

to

Indonesian

with emphasis on rural areas,

economic

development

( 2) to create jobs for

the increasing younger population entering the work force,

( 3)

to support

manpower

development

for

the

stage of Indonesia's industrialization , with particular stress on those in rural areas,
health standards of

the

rural

(4) to increase

poor and control the

diseases that affect them, and to improve public science

for

rural ,

agricultural

populations

in

the

fields of health and non-formal education, and (5) to
\

increase the capacity of the country's road and rail
systems

for

safe

transportation

of

people

and

of

agricultural goods.

Benchmarks :
RISTEK
BPPT

Project activities to be carried out by

(Department

of

Research

and

Technology)

and

(Agency for the Development and Application of

Technology) will :

( i)

Develop basic staff and institutional capa-

bility through such activi t ies as:

medical
training for

research

equipment

increased understanding ,

and

staff

and ultimately

better control of diseases prevalent in rural areas.

- 14 -

Equipment

will

be

procured

and

training

initiated

during 1985/86;

conceptual planning of a laboratory which
will

create

through

staff

training in the efficient application of rural

tech-

nology .

jobs

Plans

for

the

rural

to be completed

poor

by

end

of

calendar

year 1985;

planning
\

of

an

Indonesian

non-formal,

hands-on science education center which will increase
employment access for the rural poor by enhancing the
science

awareness

and

curiosity

of

rural

youth.

Planning and exhibit development to be conducted during 1985 and 1986;
program
planning

for

a

definition

national

and

institutional

biotechnology

and

genetic

engineering center to strengthen Indonesia's agriculture and fisheries industries, as well as the pharmaceutical industry, by the end of 1985;

a training program for Indonesia specialists on curtailment of post-harvest losses,
food and pharmaceutical applications,
before the end of fiscal year 1985/86;

for both

to be completed

- 15 -

(ii)

Create jobs through new scientific knowledge

and basic industrial development by:

an

assessment of

the

economic

potential

for coastal - zone crops of seaweed and shellfish;

establishing an oceanographic data center
to strengthen Indonesia's fisheries industry and expand its number of j obs .

Initial planning to be con-

ducted during 1985-86;
\

planning

and

initiating

by

the

end

of

1986 an industrial standards function which will impact on agriculture and rural industries;

(iii)
death

Increase

and

injury

transportation
in

the

safety,

transport

of

reducing

agricultural

goods to market by carrying out a study for improving
road/rail freight transport of farm products to market,
and

which wi 11 reduce costs,
increase

safety .

The

shorten deli very time

study would be

completed

during 1986 .

A sum of US$1 . 0 million of the sales proceeds under
the Agreement will be allocated for these projects.

- 16 -

7.

COOPERATIVE AGRIBUSINESS ENTERPRISE DEVELOPMENT

Objectives :

Through replication and

intensification

of the current PUSPETA cooperative project , to devel op

the

capacity

within

the

cooperative

system

to

plan , organize and implement programs which will provide comprehensive production and marketing services
for food crop, livestock, fishery and handicraft production to small farmers who have potential
creasing

'

their

｢･ｮｦｩｾｴ､＠

production

but

have

not

for

in-

previously

substantially from such services .

Benchmarks :

The

project

proposes

expand the current PUSPETA Klaten
FCC

Luwu

(South

their replication
Java)

and

operate

Boyolali

Sulawesi)
in

to

(Central Java) and

projects

the districts

(Central Java),

in conjunction with

intensify and

and

undertake

of Malang
where

(East

they will

the Uplands Agriculture

and Conservation Project .

Beginning in 1985/86, the program will cover all four
districts and consist of the following activites :

( i)

Recruitment and training of project manage-

ment and operational personnel;

- 17 -

(ii)

Construction of project storage and distri-

bution facilities

and

(in Kabupaten

Luwu)

a

shrimp

hatchery;

(iii)

Procurement

of

project

required

equipment,

machinery and vehicles .

(iv)

(v)

The mobilization of required working capital .

The

implementation

of

agribusiness

opera-

tions.

The Cooperative League of the USA will provide technical

and

managerial

assistance

to

the

project

as

with the PUSPETA and Luwu Projects through additional
counterpart financing .

Implementation of the project

will be carried out as detailed within the Cooperati ve

Agribusiness

Enterprise

Development

Project

Document.

Approximately US$6 .0 million will

be earmarked

from

sales proceeds under the Agreement to cover the cost
of this program's implementation .

- 18 -

8.

RURAL ELECTRIFICATION COOPERATIVES

Objectives :
lation

To improve the income of the rural popu-

through

the

expanding

provision

of

electric

energy in the rural areas which can be expected to
create more employment opportunities and to minimize
the movement of rural people to the urban areas.

Benchmarks :
(REC's)

Three Rural Electrification Cooperatives

have

Cooperatives

been
as

established

pilot

by

projects

the

in

Ministry

Central

of

Lampung

(Sumatra), East Lombok (West Nusa Tenggara) and Luwu
(South Sulawesi), which will serve 51,500 families in
190 villages.
plants

with

21,900 KW and

Electricity will come from generating
an

ultimate

1, 074 Km of

installed
primary

and

capacity

of

1, 050

of

Km

secondary distribution lines .

During 1985/86, the following project activities have
been p l anned by the Project Unit:

(i)

Continuation of training and assistance pro-

grams to increase the ability of
ployed by the REC's.

the personnel em-

- 19 -

( ii)

Provision of

operation and

guidance

management of

to

the

REC' s

cooperati vc

in

rural

the

elec-

trification businesses.

(iii)

Assisting

participation

in

the

REC's

utilizing

in

village

rural

cooperative

electrification

to

enhance rural community development.

(iv)

Operating an experimental gasifier-generated

electrification cooperative in the province of Jambi.

Approximately US$2. 0
sales

proceeds

million will be earmarked

under

this

Agreement

to

from

cover

costs of equipment and machinery required to

the

imple-

ment the project activites.

Item

VI .

Economic

Development

Purposes

Proceeds Accruing to the Government of

for

the

which

Republic

of Indonesia are to be used:

(A)

The applicable proceeds accruing to the Govern-

ment of

the Republic of

Indonesia

from

the

sale of

the co11modi ty financed under this Agreement will be
used for

financing

the self-help measures

set

forth

in the Agreement for nPvPlOpment in the agricultural

-

sector,

20 -

in a manner designed to increase the access

of the poor in Indonesia to an adequate,

nutritious

and stable food supply.

(B)

In the use of proceeds for these purposes empha-

sis will be placed on directly improving the lives of
the poorest of the Indonesian people and their capacity to participate in the development of their country .

The measures identified under

Item

v

will di-

rectly benefit the needy in the following ways:

( 1)

The Padat Karya Gaya Baru Project will pro-

vide i mproved irrigation,
systems,

village

facilities

to

access

major

flood control and drainage
roads,

areas

of

and

drinking

water

concentrated

rural

poverty, thus improving both economic opportunity and
the quality of life for the needy.

(2)

The

Applied

Agricultural

Research

Project

and Sumatra Agricultural Research Project will help
improve the lot of the rural poor by providing additional facilities for the development of more productive and disease resistant crops and improved farming
systems,

thereby increasing both the economic return

from small landholdings and the productivity of landless farm workers.

- 21 -

(3)

The IPB

(Bogor Agricultural Institute) Out-

reach Program and the KKN
ject

will

help

the

(Kuliah Kerja Nyata) Pro-

needy

through

increasing

the

capacity of educational institutions in both Java and
the

less

densely

populated

outer

islands

to

train

agricultural technicians to a level of technical expertise and community development orientation appropriate

for

assisting

small

farmers,

villagers

landless laborers to improve their skills,

and

modernize

their outlooks and raise their income levels.

(4)

The Science and Technology Rural Development

Project will bene f it the needy through facilitating
the

provision

of

upgraded

rural

health

services,

assisting in the establishment and operation of small
scale rural
formal

industries,

science

developing programs in non-

education

for

the

rural

poor ,

strengthening open-water and coastal food production
throughout

the archipelago ,

and aiding

the

improve-

ment of farm-to-market transportation systems .

( 5)
velopment

The Cooperative Agribusiness Enterprise DeProgram will

replicate

and

intensify on-

going cooperative programs assisting the

rural

poor

in producing and marketing foodcrops, livestock, seafoon

Anti

handicrafts through local,

grass - roots co-

..
- 22 -

operatives serving both small farmers and the landless and joined into CLUSA-assisted coop federations,
thus giving the needy more equal economic and competitive opportunities.

(6)
the

The Rural Electrification Coops will benefit

needy

by

expanding

the

provision

of

low

cost

electrical energy to rural areas, providing increased
opportunities for gainful employment, health and educational facilities improvement,
munity development.

and social and com-

- 23 -

IN WITNESS WHEREOF,
duly

authorized

for

the respective representatives,
the

purpose,

have

signed

the

present Agreement .

DONE at Jakarta, in duplicate, the thirteenth day of
February , 1985.

FOR THE GOVERNMENT OF THE
REPUBLIC OF INDONESIA

FOR THE GOVERNMENT

UNITED STATES OF AMERICA

Signed
Atmono Suryo

OF THE

Signed
ｾｯｨｮ＠

•

H. Holdridge

Director General

Ambassador Extraordinary

for

and Plenipotentiary of

Foreign Economic Relations,

the United States of

Department of

America to the Republic

Foreign Affairs

of Indonesia