The lightweight Indonesian cotton industry made headlines in 2000 when a number of non-governmental organizations (NGOs) demanded the government cancel its deal with U.S. based agrochemical and seed company Monsanto to provide farmers with controversial biologically engineered cotton seeds.

Besides raising concerns over the potential hazard to the ecosystem, the NGOs highlighted an interesting point: the deal showed that the government preferred U.S. genetically modified seeds over locally-produced variety Kanesia 7, which was produced through natural cross-breeding rather than the genetic modification.

Four years later, however, the government started a similar project to boost the local cotton industry. But this time, it used Kanesia 7 and its "brother" Kanesia 8.

Ministry of Agriculture's Research and Development Agency head Achmad Suryana said that the project, which started in January, had been progressing well, as harvest in July showed favorable results.

The project provided farmers in regencies of Bantaeng, Bulukumba, Sinjai (all in South Sulawesi) and in West Lombok in West Nusa Tenggara with seeds produced by state-owned Research Agency for Clove and Fiber-based Plants, based in Malang, East Java.

The project has been carried out on some 300 hectares of land.

"In July's harvest, the seeds produced an average of two tons of cotton fiber per hectare, which is about the same amount that Monsanto's transgenic seeds could produce," Achmad told The Jakarta Post on Sunday.

Achmad said that while Monsanto was very aggressive in promoting its goods, the producer of Kanesia has maintained a low profile.

"Kanesia lacks promotion. Thus its potential remains unseen," he said.

He quickly added that this year Indonesia proved itself capable of making products with the potential to compete internationally.

The controversial Monsanto transgenic project was eventually halted in 2001, because it was reportedly "not profitable".

Transgenic technology creates higher quality seed by inserting genes from other species. The Genetically Modified Organisms (GMOs) have genes inserted to protect the plant from pests or to resist a specific herbicide. Despite assurances from scientists that the products are harmless, some doubts have been raised as to the safety of GMOs and their effect on health and the environment.

Separately, Indonesian Textile Association (API) cotton expert Suripto said that the textile industry looked at the project with great interest and hoped it could ease Indonesia's dependence on cotton imports in the future.

The commodity was sold at Rp 2,100 per kilograms (22.83 U.S. cents per kg) as "seed cotton" (cotton still uncleaned of seed), while the current international price of "clean cotton" (cotton already cleaned of seed) is 25.10 cents per kg, he said.

"The industry is interested as long as the domestic supply is stable," Suripto told the Post and said that value-added tax relief would be a good incentive for the industry.

Meanwhile, Ministry of Industry and Trade's director of textile and textile articles Luky Hartini was hopeful that the project could turn out to be a significant leap in strengthening the domestic textile industry.

According to the Ministry of Agriculture, Indonesia has 100,000 hectares of potential land for growing cotton.

"Using the assumption from the project, the potential land could produce up to 200,000 tons of cotton fiber or a near 40 percent of the annual domestic demand of 500,000 tons," Luky said and added that almost all domestic demand for cotton was now fulfilled by imports as domestic supply represents less than 1 percent of the total need.

Luky went on to say that it would be quite a challenge to encourage local manufacturers to use domestic cotton, as importers now pay zero tariff to ship cotton into the country. The zero-tariff policy is aimed at boosting the local textile industry.

"We will of course provide incentives for local textile makers that use local cotton," she said.

The government could remove value-added tax for products using local cotton, she suggested.

Textiles, the country's top non-oil and gas export, reached $7.03 billion last year.

Indonesia would stun everyone, if it was able to grow cotton in the 100,000 ha of potential cotton-growing land and fulfill 40 percent of the local demand, Luky said.

© The Jakarta Post