Clove farmers waiting for higher profit
Jongker Rumteh, The Jakarta Post, Manado
The price of cloves in Manado has plummeted to Rp 25,000 (US$2.50) a kilogram, causing farmers of the spice to think twice before selling their harvest.
Anna Paat, for instance, says she is waiting for the price to reach at least Rp 35,000 a kilogram.
"We have to be patient. I am sure the clove price will be higher in the months ahead, after the harvest period comes to an end," said Anna in Tomohon city near Manado while spreading out newly picked cloves to dry last week. July and August are the harvest period for clove farmers in North Sulawesi, the biggest producer of cloves in Indonesia.
It is estimated that 68 percent of North Sulawesi's population of 2,270,000 are clove farmers, producing a total of 15,000 tons of dried cloves a year.
Head of the North Sulawesi Clove Farmers Solidarity Forum (FSPC) Franklin J. Sinjal said the price of cloves would never be ideal without goodwill from the government. The price of cloves at the stockpiler's level in Manado now ranges from Rp 27,000 to Rp 28,000 per kilogram. According to the FSPC, with the current prices, farmers do not stand a chance.
"North Sulawesi clove farmers will continue to live in poverty as the cost of production is almost the same as the sale price," said Sinjal, who owns a vast clove plantation in Minahasa. The production costs of a kilogram of cloves are on average between Rp 24,000 and Rp 26,500. Costs include making bamboo ladders for picking the cloves, buying mats or tarpaulins for the drying process, paying the daily wages of clove pickers -- which amounts to Rp 15,000 per person -- as well as the pickers' meal allowance, including their cigarettes and payment for carrying the produce from farms to farmers' homes. If clove prices in Manado drop below Rp 28,500 per kilogram, farmers do not usually harvest all clove buds. Instead they make an agreement with farm laborers to harvest the crop on a 50 percent share basis because they lack the funds to harvest the cloves.
If the prices drop gradually, farmers do not harvest the clove buds but wait for them to bloom. They cannot be sold but are planted to grow seedlings of the tropical tree.
Ideally, according to Sinjal, there should be a profit margin of Rp 10,000 between production costs and the sale price, which would range from Rp 35,000 to Rp 40,000 per kilogram.
The highest price of cloves in Manado now is Rp 28,000 per kg, while the price in Surabaya, East Java, has reached Rp 35,000. It is difficult for farmers from North Sulawesi to sell their cloves there due to the high cost of transportation.
Many parties have made efforts to stabilize the price of cloves in the province to protect farmers, but to no avail.
In 2000, the central government disbursed liquidity funds through the North Sulawesi Development Bank for clove farmers cooperative units (KUT), the amount of which reached Rp 450 billion. However, the funds were allegedly stolen by several KUT managers and a number of legislative council members and politicians using fictitious cooperatives. A number of KUT managers were investigated by the North Sulawesi Prosecutor's Office, and several provincial legislative councillors faced legal prosecution in 2004, but were released without charges.
"Another factor that has reduced the price of cloves is that cigarette factories have stockpiled cloves for several years ahead. So, when their supplies cannot be met, they will import clove from overseas, both legally as well as illegally," Jack said.
One way to increase clove prices is to stop the importation of cloves and smuggling. Farmers must sell the commodity in accordance with the needs of cigarette manufacturers or find ways to export their produce, he said.