Distribution system of fertilizer may change
Distribution system of fertilizer may change
Adianto P. Simamora, The Jakarta Post, Jakarta
The Ministry of Agriculture will propose to the Ministry of
Industry and Trade that the current fertilizer distribution
system be revised to help prevent future supply shortages, a
senior official said.
Director General of Agriculture Facility Ato Suprapto told The
Jakarta Post on Wednesday that under the existing distribution
system, introduced by the Ministry of Industry and Trade in 1993,
fertilizer distributors in Java could only maintain a one-week
supply of fertilizer.
He explained that since the intensity of farming activities
differed from area to area, certain places might sometimes suffer
fertilizer shortages due to a surge in demand. This forced
distributors to "import" it from other areas, which in turn
pushed up the price of the product, particularly when
transportation was becoming more expensive due to higher fuel
prices.
Ato said that ideally, distributors should be allowed to
maintain a one-month supply to better manage the supply of the
commodity, but added that this would force distributors to spend
more money on storage.
He said that given the high storage costs, his office would
propose a two-week supply system.
He added that his office would also ask the Ministry of
Finance to provide a subsidy scheme to help distributors cover
storage costs.
"We will meet with the Ministry of Industry and Trade next
week to discuss the revision of the distribution system," he
said.
The comments follow a report in Kompas daily that there had
been a shortage of fertilizer in some places in Java, which had
forced up the price of the commodity.
But Ato said that domestic fertilizer output at 6.5 million
tons was more than enough to cover the around 4.5 million ton
demand.
He said that the problem was only in the distribution system.
Ato said that according to reports from his officials, there
was no shortage of fertilizer in West Java's rice production
centers -- including in the areas of Karawang, Subang and
Purwakarta -- and that the price of the commodity remained at the
normal level of about Rp 1,200 per kilogram.
He said that only in Cianjur was there a supply problem, with
prices rising to between Rp 1,300 and Rp 1,400 per kg.