Clove farmers demand Rp 200b fund

Clove farmers demand Rp 200b fund

M. Taufiqurrahman, The Jakarta Post, Jakarta

North Sulawesi clove growing representatives demanded on
Monday that the government provide money to compensate for a
potential loss from the plunge in the commodity price ahead of
the harvest season.

North Sulawesi clove farmers solidarity forum vice chairman
Ernest Weley said that Rp 200 billion (US$24 million) in
interest-free loans would be adequate to cope with declining
clove prices.

"Farmers in North Sulawesi are in dire need of funds to
prepare themselves for the coming harvest period because they are
already short of money," he told reporters after a hearing with
the House of Representatives' Commission V for trade and
industry.

He said the funds would be allocated to pay laborers, to buy
new machines and to finance storage of the commodity.

Clove growers in North Sulawesi -- who account for 70 percent
of the population in the province -- are facing a severe blow
from the drop of the commodity price.

Currently the price stands at Rp 12,000 per kilogram and is
still declining. In comparison, the price peaked at Rp 85,000 per
kilogram in mid-2001.

North Sulawesi produces around 15,000 tons of cloves per
annum, or 25 percent of the total national production of around
60,000 tons. Currently, the domestic demand for cloves -- mainly
from cigarette manufacturers -- reaches 110,000 tons per year.

Ernest said that as the domestic market was still short of
supply, it did not make any sense that the price had dropped to
its current levels.

"We suspect that there are certain parties who have illegally
imported cloves to close the gap between the demand and supply in
the domestic market," he said, adding that imports of the
commodity had been banned by a decree from the minister of trade
and industry last year.

He also suspected that major cigarette manufacturers had used
unfair practices by purchasing the cloves directly from farmers
while the crops were still half-grown.

"To supply their own needs, cigarette manufacturers also grow
the commodity on their own plantations. It has also contributed
to the price decline," Ernest said.

He said farmers' welfare in Indonesia's northernmost province
could further deteriorate in the wake of the harvest period, when
there would be an abundant supply of cloves. He said the price
could fall to Rp 10,000 per kilogram.