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)