Clove growers have a history of losing out

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.