Government to remove subsidies on fertilizers<\/p>\n
JAKARTA (JP): The government will gradually remove the
\nsubsidies on fertilizers for farmers beginning April next year to
\navoid rampant malfeasance in the distribution of subsidized
\nfertilizers, Agriculture Minister Soleh Solahuddin said on
\nWednesday.<\/p>\n
Soleh said farmers will be given cheap loans to buy
\nfertilizers so that the subsidy removal would not affect farming
\nactivities.<\/p>\n
"The move will be taken to clean up unfair practices in the
\ndistribution of fertilizers in the country. Farmers will be given
\nspecial loans to buy fertilizers at market prices," Soleh said in
\nan agriculture coordination meeting in Padang, West Sumatra.<\/p>\n
Soleh said the wide disparity between the government
\nsubsidized price and the market price had resulted in rampant
\nmalfeasance in the distribution of subsidized fertilizers
\nearmarked for farmers.<\/p>\n
The subsidized price for urea fertilizer is Rp 450 per
\nkilogram while the market price is Rp 1,250 per kg.<\/p>\n
Soleh said much of the subsidized fertilizer ended up in the
\nhands of plantation companies and had caused a scarcity of
\nfertilizer allocated for farmers.<\/p>\n
He said many major plantation firms bought fertilizer at
\nsubsidized prices due to unscrupulous distribution practices and
\ncollusion on the part of officials of fertilizer producers and
\nvillage cooperatives.<\/p>\n
Most of the malfeasance occurred in fertilizer distribution at
\nthe regency level and in village cooperatives' warehouses, he
\nsaid.<\/p>\n
"We will need at least one year to improve our poor
\ndistribution system for fertilizer," Soleh said.<\/p>\n
The government subsidizes three common fertilizers -- urea, ZA
\nand superphospate 36 (SP36) -- to assist farmers amid soaring
\nfertilizer prices and to boost the country's rice and food crop
\nproduction. Subsidies for other fertilizers have been abolished
\ngradually since 1990.<\/p>\n
Early this year, the government started to subsidize kalium
\nchloride fertilizer in a bid to increase the country's rice
\nproduction.<\/p>\n
Subsidies are limited to food crops and horticulture farming
\nand are exclusive for farmers.<\/p>\n
Soleh said the government would provide Rp 5 trillion -- an
\nincrease from Rp 2.1 billion initially allocated -- to subsidize
\nfertilizers during this year's planting season until next year's
\nharvest in March.<\/p>\n
He said the funds would be used to subsidize four million tons
\nurea fertilizer, one million tons of both superphospate 36 and ZA
\nand 400,000 tons of kalium chloride.<\/p>\n
Earlier this month, Director General of Food Crops and
\nHorticulture Chairil Anwar Rasahan said there was a scarcity of
\nfertilizers and it would hamper the ministry's efforts to
\nincrease the country's food crop production.<\/p>\n
He said the stock of kalium chloride on the market currently
\nstood at 60,000 tons, or only 17 percent of the total demand of
\n362,000 tons for next planting season which starts next month.<\/p>\n
Data from the Ministry of Industry and Trade shows that state
\nfertilizer producer PT Pupuk Sriwijaya's (Pusri) stock of urea,
\nSP36 and ZA fertilizer was currently only enough to meet 95
\npercent, 40 percent and 46 percent of the demand respectively for
\nnext month's planting season.<\/p>\n
Pusri, which is the country's largest fertilizer producer, is
\nalso assigned to handle the distribution of fertilizers produced
\nby other state fertilizer companies including PT Petrokimia, PT
\nPupuk Kaltim and PT Pupuk Kujang.<\/p>\n
According to the Association of Indonesian Fertilizer
\nProducers, domestic production of fertilizer in January to
\nSeptember this year has reached over 4.5 million tons, in excess
\nof the annual domestic demand of 2.9 million tons for farming and
\nplantation and 330,000 tons for industry. (28\/gis)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-to-remove-subsidies-on-fertilizers-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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