JAKARTA (Commodity Online) : In an attempt to provide much needed support to its sugar farmers, Indonesia planning a 17 percent increase in the amount paid to farmers suffering from rising costs for land, labor and fertilizer.

Country’s Agriculture Ministry said the sugar board would ask the Ministry of Trade to increase the sugar buying price to Rp 6,250 per kilogram from the current Rp 5,350.

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The increase would help sugar cane farmers earn better profits in the coming season and provide them with an incentive to plant more sugar cane, the ministry said in a statement.

International sugar prices have been rising over the past year because of a shortage of supply. In Indonesia, the retail price of white sugar is now about Rp 12,000 per kilogram, compared to Rp 8,000 in August.

Analysts said an increase in the farm gate price would not automatically push up retail prices.

Indonesian Sugarcane Growers Association said sugar farmers needed additional incentives to encourage them to plant more cane.

The Agriculture Ministry has estimated the country will produce 2.9 million tons of white sugar this year, up from 2.6 million tons last year.

Indonesia aims to lift sugar production to 4.1 million tons by 2014 to become self-sufficient in production of the commodity.

It has pledged to open up an extra 500,000 hectares of land for sugar plantations and is encouraging investors to build more sugar mills.

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