Clove price increased<\/p>\n
The government decided last week to increase the producer
\n(floor) price of cloves by 1.2 percent to Rp 8,000 (US$3.44) per
\nkilogram from the Rp 7,900 set in early 1992. That measure
\nfollowed last month's decision to extend the private sector
\nmonopoly in clove trading for three years.<\/p>\n
The increase is obviously negligible, especially in view of
\nthe 34 percent inflation over the past four years. However, the
\ngovernment claims that the tiny rise will bolster the incomes of
\nclove growers because of a major change made in the structure of
\nthe new price scheme.<\/p>\n
Based on the 1992 regulation, only Rp 4,000 of the floor price
\nwas paid to farmers immediately, while Rp 2,000 was held as their
\nequity shares in their village cooperatives and the other Rp
\n1,900 was kept by their cooperatives as compulsory savings. Under
\nthe new price scheme, Rp 5,000 will be paid directly to farmers,
\nRp 2,000 will be withheld as their equity shares in cooperatives
\nand the other Rp 1,000 will be transferred to a special account
\nfor crop diversification funds.<\/p>\n
However, judging from the poor performance of the private
\nclove monopoly over the past four years, we are afraid that the
\nnew price scheme will also remain a theoretical concept, while
\nthe majority of the farmers continue to get much less than what
\nthe government has set. The Directorate General of Plantations
\nitself admitted last year that the average price obtained by the
\nfarmers during the 1992-1994 period was only Rp 3,700\/kg. In
\nseveral provinces, the actual producer price was often much below
\nthat average.<\/p>\n
Still more devastating is the fact that a great number of
\nfarmers have been disqualified from withdrawing their compulsory
\nsavings because, according to the official argument, they simply
\ncould not fulfill the administrative requirements for the
\nreimbursement of their savings. But the helpless farmers take the
\nofficial argument simply as an excuse for cheating them of their
\nsavings because the requirements were not introduced until about
\ntwo years after the collection of the savings began.<\/p>\n
Minister of Cooperatives and Small Businesses Subiakto
\nTjakrawerdaya himself acknowledged last June that only 24
\npercent, or Rp 38.2 billion, of the Rp 157.7 billion in
\ncompulsory savings raised from the sales of the 1992 harvest
\ncould be returned to the farmers due to administrative default on
\nthe part of the clove growers. No official explanations have been
\nmade about the accountability for the savings raised from the
\n1993, 1994 and 1995 harvests.<\/p>\n
Minister of Information Harmoko said after last week's cabinet
\nmeeting on economic affairs that the compulsory savings component
\nwas removed from the new price scheme owing to the chaos in the
\nadministration of the savings in the past.<\/p>\n
We are deeply concerned over the fate of the estimated one
\nmillion clove farmers, who do not have as strong a political
\nlobby as that exerted by the private monopoly. They may find some
\nconsolation in the fact that now they are no longer required to
\nput up the compulsory savings. However, they are still forced to
\nsurrender Rp 2,000 of the new price as their equity shares in
\ncooperatives and another Rp 1,000 to crop diversification funds
\nin a bid to reduce the clove surplus.<\/p>\n
Worse still, there is no guarantee that the farmers will get
\nthe floor price. We also doubt whether they regularly receive
\naudited accounts of how their equity shares in their cooperatives
\nare managed.<\/p>\n
The farmers' position is strikingly different from the
\nvirtually unlimited leverage held by the private monopoly which,
\nbesides being unaccountable for its performance, is free to set
\nthe sales price of cloves to cigarette companies. Because the
\ncigarette companies, which account for over 95 percent of the
\nclove consumption, cannot import nor buy cloves directly from the
\nfarmers or cooperatives, they have to pay whatever prices are
\nasked by the private monopoly.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/clove-price-increased-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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