Govt lifts subsidies, trade restriction on fertilizers<\/p>\n
JAKARTA (JP): The government has decided to lift subsidies on
\nfertilizers and remove all restrictions to their trade, Minister
\nof Agriculture Soleh Solahuddin said on Wednesday.<\/p>\n
The new measures will mean that fertilizers can be imported
\nand distributed to farmers through cooperatives and retailers at
\nthe market price.<\/p>\n
The state-owned PT Pupuk Sriwijaya (Pusri) previously held a
\nmonopoly on the import of subsidized fertilizers.<\/p>\n
The financial difficulties currently facing Pusri prompted the
\ngovernment to ease restrictions on the trade last month.<\/p>\n
To compensate for the removal of subsidies, the government has
\nraised the producer floor price of unhusked rice to between Rp
\n1,400 and Rp 1,500 per kilogram from Rp 1,000 per kilogram, Soleh
\nadded.<\/p>\n
Soleh said the government has also raised the minimum value of
\nsubsidized farming loans to Rp 2 million (US$266.7 million) per
\nhectare from Rp 1.49 million to encourage farmers to take
\nadvantage of the scheme, which was set up to help them procure
\nequipment and fertilizers.<\/p>\n
The government has also lowered interest rates attached to the
\nloans from 14 percent a year to 10.5 percent a year, he added.<\/p>\n
He explained that the changes were intended to make
\nfertilizers more readily available to farmers after a period in
\nwhich they have been in short supply.<\/p>\n
\"The scarcity of fertilizers was caused by a wide disparity
\nbetween the government-subsidized price and the market price
\nwhich resulted in subsidized fertilizers leaking into sectors not
\nentitled to them,\" he told reporters after a Cabinet meeting at
\nthe state palace.<\/p>\n
He said the minimum size of farming loans had been
\nrecalculated assuming a urea price of Rp 1,115 per kilogram, a
\nZ.A. price of Rp 1,000 per kilogram, a superphospate (SP36) price
\nof Rp 1,600 per kilogram and a kalium chloride price of Rp 1,650
\nper kilogram.<\/p>\n
Until the decision was taken, the government subsidized urea,
\nZ.A. and SP36. Subsidies on all other fertilizers were abolished
\ngradually over a period beginning in 1990, although kalium
\nchloride was once again made available at a reduced price earlier
\nthis year in a bid to increase rice production.<\/p>\n
All subsidies were intended exclusively for farmers and were
\nlimited to food crops and horticulture farming.<\/p>\n
However, the resulting price differential proved too great a
\ntemptation for those responsible for distribution of the
\nsubsidized fertilizers and much of it was sold on at profit to
\nindustrial concerns that could afford to pay a greater price.<\/p>\n
The subsidized price of urea fertilizer was Rp 450 per
\nkilogram while the market price was Rp 1,250 per kilogram.<\/p>\n
Much of the subsidized fertilizer ended up in the hands of
\nplantation companies, resulting in a scarcity among farmers.
\n(das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-lifts-subsidies-trade-restriction-on-fertilizers-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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