Clove growers have a history of losing out

By Risang Pamungkastiran and Gin Kurniawan

YOGYAKARTA (JP): The old man's expression remained unchanged when he was asked to comment on the planned dissolution of the Clove Marketing and Buffer Stock Agency (BPPC).

He dragged deeply on his hand-rolled cigarette and exhaled, the aroma blending with that of the budding clove flowers on his 5.5-hectare clove plantation.

"How can the BPPC be dissolved? Isn't the management in the hands of one of President Soeharto's sons?" queried Atmo Prawiro, a 79-year-old clove grower in Samigaluh, Kulonprogo, Yogyakarta.

Atmo may not have heard that by virtue of a recently issued presidential decree, No. 21/1998, all forms of clove monopolies must be scrapped. If this decree is enacted to the letter, then growers may sell their product directly to cigarette manufacturers, like before the establishment of the BPPC. Of course, they will then be able to set their own prices.

To clove growers like Atmo Prawiro, who has experienced the dizzying ups and downs of clove prices, the decree means nothing until it is proven to improve the welfare of the farmers. It is a caution shared by Sudomo, 56, chairman of the Sido Subur village unit cooperative in Samigaluh.

Several members of the executive board of the cooperative said that as soon as news of the plan for the dissolution of the BPPC got around, the clove price in the market rose by more than 100 percent. The price of dried cloves, set by the BPPC at Rp 2,000/kg, soared to Rp 7,500/kg, and the price of fresh cloves jumped from Rp 400/kg to Rp 2,000/kg.

"I'm afraid the BPPC will not really be dissolved but will be merely replaced by another agency having a similar function," said Sudomo.

He said what mattered was not the policy or who managed the clove trade, but rather how the welfare of clove farmers could be raised, an objective village unit cooperatives had long struggled to achieve.

Sudomo's worry is not groundless. Experience shows that clove growers bear the biggest brunt of the application of policies at whatever level.

Before the establishment of the BPPC, Samigaluh was a coveted mining area of "brown gold", what locals call cloves, and was understandably quite prosperous. As soon as the BPPC began operation in early 1991, the price of cloves dropped.

"The price of dry cloves once got as low as Rp 1,000/kg. Before the presence of the BPPC, it could get as high as Rp 15,000/kg," Atmo said.

Another blow to clove growers, brought about by the establishment of the BPPC, was that the partnership established long enough between the local village unit cooperative and Sukun cigarette factory in Kudus had to be terminated. To Samigaluh clove growers, this marked the beginning of the gloomy days ahead.

Things got worse. In March 1992, the BPPC chairman, Hutomo Mandala Putra, President Soeharto's youngest son who is better known as Tommy Soeharto, proposed a controversial solution to the problem of clove oversupplies. Growers were advised to plant other crops and clove estates would be reduced in area by about 30 percent. Growers were required to burn 50 percent of their 1992 harvest.

Tommy's statement sparked controversy, and a series of studies and seminars was held, Unfortunately, the solution offered by Tommy had already become a recommendation of sorts for the maintenance and normalization of the clove trading system, and also for legitimizing the presence of the BPPC to maintain its monopoly over the trade in cloves.

Everything went on in favor of the BPPC until the issuance of this year's decree on the elimination of clove monopolies.

But does this really bring hope for a better lot for the growers?

"BPPC's dissolution means nothing. We still cannot purchase cloves directly from the growers. The monopoly previously in the hands of the BPPC is now taken over by PT Kembang Cengkeh Nasional (KCN)," a cigarette factory owner in Kudus, who preferred to remain anonymous, said late last month.

Prior to the issuance of decree, a cigarette manufacturer was required to show clove purchase evidence invoices (TBPC) from the BPPC before obtaining cigarette excise stamps from the Directorate General of Customs and Excise. Logically, the dissolution of the BPPC, followed by the decision of the Director General of Customs and Excise, No. 09/BC/1998, frees cigarette manufacturers from this requirement.

Reality was reportedly different. A cigarette factory would have difficulty obtaining the excise stamp unless it purchased cloves from PT KCN, also controlled by Tommy Soeharto, sources said early last month.

That apparently has also changed. Minister of Trade and Industry Mohamad "Bob" Hasan and the customs and excise tax director general, Soehardjo, said in Jakarta early this month that such a procedure had been stopped and cigarette companies could now get excise stamps without showing clove purchase invoices from KCN.

On Monday, President Suharto handed over the assets of the BPPC to the cooperatives as a symbolic move to mark the dismantling of the monopoly which was abolished under the International Monetary Fund's economic reform package.

Soeharto assured that no new monopoly would be set up to control clove trading after the dismantling of BPPC.

Nonetheless, Tommy asserted only a few hours after the President gave his assurance that KCN would take on the existing forward contracts which cigarette companies, formerly held by BPPC.

The contracts would continue with KCN until they expired, Tommy added.

Only last week, Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya said these contracts had been transferred to cooperatives.

For Atmo Prawiro and millions of other growers, far removed from the boardrooms of the capital, the intricate maneuvering may be hard to understand. After many false starts and dashed promises, they are still waiting for a better lot.