Clove farmers waiting for higher profit

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.