Clove farmers could face problems selling products
Clove farmers could face problems selling products
JAKARTA (JP): Clove farmers will likely face difficulties in
selling their produce this year because village cooperatives,
which have been appointed by the government as collectors, may
not be able to buy all their output.
The Association of Village Cooperatives Units (Inkud) told the
House of Representatives (DPR) here yesterday that its members
have procured only 7,000 tons of clove during the first six
months of this year, as compared to the planned procurement of
80,000 tons for all of 1994.
Inkud's board of directors said in a hearing with Commission
VII of the House that the clove procured by its members in the
past six months consisted of 1,276 tons of high quality clove and
6,000 tons of low quality clove.
"The Clove Stock Management Company (BPPC) has allocated a
fund of Rp 450 billion (US$208 million) to purchase 100,000 tons
of clove this year," Inkud's chairman, M. Rapi'i, said, adding
that Inkud itself plans to buy around 80,000 tons of clove this
year.
In 1990, the government appointed BPPC as the sole clove
marketing and buffer-stocking agency to stabilize prices on the
domestic market and improve the living standards of growers.
Last year, BPPC delegated all of its operational and
administrative responsibilities for the procurement and buffer-
stocking to Inkud, but it remains responsible for the financial
and marketing aspects.
Decrease
Inkud reported yesterday that clove procurement sharply
decreased from 142,145 tons in 1992 to 53,864 tons in 1993.
According to the data from the National Logistics Agency
(Bulog), the annual domestic clove production is estimated at
135,000 tons, while demand is only 100,000 tons.
"The procurement rate during the past three years was around
105,000 tons while its sales were 65,000 tons per year,"
Rapi'i said.
The difference in the supply and demand leads to a surplus of
173,932 tons.
This surplus has caused a problem because farmers should save
Rp 2,900 ($1.34), consisting of Rp 1,900 in compulsory savings
and Rp 1,000 in equity funds, at village cooperatives (KUD) every
time they sell a kilogram of clove.
"Up until June, total equity funds had reached Rp 486.54
billion and compulsory savings Rp 253.16 billion," said Jeff
Mustafa, a director of Inkud.
The government has promised that farmers could withdraw those
funds after the cooperatives sell all their stock.
An executive of Inkud's East Java office said the government
should give additional aid to the cooperatives so that the
farmers can withdraw their savings.
For the next two years, Inkud will likely buy only around
80,000 to 90,000 tons of clove annually, so that the stocks can
be reduced. (yns)