INTERVIEW-Indonesia to rely on soybean imports beyond 2014 -minister

JAKARTA, March 27 (Reuters) - Indonesia will miss its ambitious goal to be self-sufficient in soybeans by next year due to a shortage of convertible land, its agriculture minister said, signalling the nation will continue to rely heavily on imports of the meat substitute.

Indonesia, which has a rising population of more than 240 million, last year abandoned a 2014 self-sufficiency target for white sugar and has been struggling to meet similar aims for staples corn, beef, rice and soybeans.

"We are facing problems on soybean and sugar," Agriculture Minister Suswono told Reuters in an interview on Wednesday. "The problem for soybeans and also on sugar is limited farm land."

He said the country would need at least 500,000 more hectares of soybean plantation area if it were to achieve its 2014 goal, nearly doubling the current 600,000 hectares.

It would require more than 350,000 hectares of extra sugarcane farmland to meet its objective for sugar, he added, way more than the 450,000 hectares cultivated now.

"It is so difficult for us to achieve the sugar and soybean targets."

Soybean shipments to Indonesia, which meets around 70 percent of its annual needs of the oilseed through imports, are likely to rise 3 percent to 1.8 million tonnes this year, say industry groups. Major buyers include FKS Multiagro, Sungai Budi Group and Cargill.

Indonesia, which mostly uses soybeans as a protein-rich substitute for costlier meat, largely ships in the oilseed from the United States, and imposes a 5 percent import duty.

Consumption is about 2.5 million to 2.7 million tonnes of soybeans each year, with the main domestic harvest in late August.

Last week, an industry ministry official said it aims to link traders' imports of soybeans to the volume of the oilseed they buy at home, to help protect domestic farmers and promote their interests.

POLICY PUZZLE

Southeast Asia's largest economy, which relies on agriculture for about 15 percent of GDP, is struggling to balance the interests of farmers and consumers.

As wealth increases in Indonesia, changing eating habits incorporate more meat and convenience foods, boosting imports of grains used in feed, such as corn and soybeans.

The government has put in place strict import controls and often uses import tariffs or quotas to protect domestic farmers.

Late last year, the president signed a new food law to hasten self-sufficiency targets that critics say will further add to curbs on the trade of staples.

Such policies on food and agriculture trade have been criticised by international trading partners, including the Organisation for Economic Cooperation and Development.

Suswono said domestic rice output would meet 90 percent of the country's needs by 2014 -- which is the government's benchmark for self-sustainability.

Earlier this week, an agriculture ministry official told Reuters that due to a rising rice surplus, imports of the staple grain would not be necessary this year.

Indonesia usually imports around 1-2 million tonnes of rice each year from Thailand, Vietnam, India or Cambodia, in order to build stock levels and guard against possible food inflation.

Consumers have also been critical of government policies, after it slashed import quotas for beef, which then helped drive up prices in Java.

The country is also battling a garlic and onion shortage.

(Reporting by Michael Taylor and Yayat Supriatna; Editing by Joseph Radford)