Co-ops may manage private clove agency

Co-ops may manage private clove agency

JAKARTA (JP): Cooperatives will be allowed to take over the management of the Clove Marketing and Buffer Stock Agency (BPPC) when the clove supply and demand reach an equilibrium, says a minister.

Minister of Cooperatives and Small Enterprises Soebiyakto Tjakrawedaya said here yesterday that the stocks of clove are at present still too high.

"At present, clove stocks have reached a total of 280,000 tons, while the country's annual demand is only 80,000 tons. So there is an excess of around 200,000 tons," he told journalists, following a meeting with Vice President Try Sutrisno.

The minister said that the transfer of the BPPC management, currently controlled by President Soeharto's youngest son Hutomo Mandala Putra, has been planned for a long time.

"But the change in the BPPC management could not be realized now, owing to the oversupply problem," he said. "Downsizing the clove plantations is, therefore, essential in efforts to limit the supply," he added.

The government has recently announced an incentive which encourages farmers to convert their clove plantations to other crops. The incentive includes a subsidy of Rp 1,000 (about 42 U.S. cents) for each tree planted in devastated clove plantations.

BPPC, set up in 1990 by Hutomo, who is more popularly known as Tommy, holds the sole right to buy and sell the commodity in the country.

The government earlier this month raised the price of cloves -- with a water content of 10 percent and a dirt content of 3 percent -- from Rp 7,900 to Rp 8,000 (US$3.40) a kilo.

However, farmers, who must sell their cloves through local cooperatives, complained that the actual price was still below Rp 2,500 per kilogram, despite the announcement on the increase.

In many places, farmers have not even harvested their crops, because the harvesting cost is much higher than the price offered by cooperatives. (hen)