Cooperatives want to control fertilizer distribution

Cooperatives want to control fertilizer distribution

JAKARTA (JP): Village cooperatives yesterday suggested that the government cut short the chain of fertilizer distribution by allowing them to obtain the chemical substance directly from producers.

The president of the Association of Village Cooperatives Units (Inkud), Jeff Mustopha Atmaja, told a hearing with Commission VII of the House of Representatives here that the current system of fertilizer distribution, which allows cooperatives to get fertilizer from warehouses at the regency level, cannot guarantee smooth and punctual distribution of fertilizer to farmers.

Indonesia currently has six fertilizer producers and the government has assigned one of them, PT Pupuk Sriwijaya (Pusri), as distributor for urea fertilizer, and another one, PT Petrokimia Gresik, as distributor for TSP/SP-36, ZA fertilizers. The two distributors, according to the Minister of Trade's decree No. 182/KP/VIII/1995, are responsible for the transportation of fertilizers from producers to warehouses at regencies throughout the country, where Inkud's members -- village cooperatives units (KUD) -- can procure fertilizer for distribution to farmers.

Jeff said Inkud's proposal, if put into practice, would cut distribution lines, and KUDs' direct contacts with farmers would guarantee a smooth distribution of fertilizer to end users. "Such a distribution system, therefore, would help prevent the possible recurrence of supply shortages," he said.

Fertilizer shortages happened recently in some areas in Java where farmers blamed nearby KUDs for having allegedly sold fertilizer to third parties.

Farmers, frustrated by the shortages of fertilizer supply in Trenggalek, East Java, even ran amuck and burned some KUD offices.

Jeff told reporters during a break at the hearing that Petrokimia plans to transfer the distribution of 1.5 million tons of TSP and ZA fertilizers per annum in Java to KUDs.

"The transfer of TSP and ZA distribution is slated to start in April," he said.

He said Inkud, with its 10,000 KUD members in the country's 27 provinces, will be capable of improving their role in fertilizer distribution, adding that Inkud will need a loan of Rp 300 billion (US$130 million) for improvements. (kod)