Export hits fertilizer supply

Export hits fertilizer supply

JAKARTA (JP): Favorable prices of urea fertilizer on the international market have encouraged traders to export such a product, thereby causing shortages of supplies in the domestic market, a House of Representatives member said.

Abdurachman Rangkuti, the head of the fact-finding team for agricultural issues of the House's Golkar faction, told The Jakarta Post here Monday that the increase in the country's fertilizer exports occurred not only through legal export activities but also through illegal trade.

"Our investigations...indicate that a lot of fertilizer doesn't go to the hands of farmers after it reaches the regency level or the third level of trading chains," he said.

Serious shortages of fertilizers have been reported by local and national media as occurring nationwide over the last couple of months.

Minister of Agriculture Sjarifudin Baharsjah said last week that the government would import 200,000 tons of triple- superphosphate fertilizer to counter the shortage which, he said, has been caused by an early planting season in the 1995/1996 period.

He said the fertilizer supply was now unable to accommodate the current demand.

Urea fertilizer in Indonesia is produced by state-owned companies, including PT Pupuk Sriwidjaja (Pusri), which has been assigned by the government as the sole distributor to arrange distribution up to the regency level.

Parties involved in the regency level are then expected to deliver fertilizer to village cooperatives and to state-owned and private plantation firms.

Rangkuti said his team has discovered no problem with the fertilizer distribution by Pusri up to the regency level.

"In fact, the team was told that as of last December, Pusri's fertilizer distribution was 10 percent more than what was originally planned," he said.

The shortages of fertilizer supplies, he pointed out, took place after it reached the regency level, where it "disappeared" and failed to reach village cooperatives and plantation firms.

In Bogor, West Java, for example, 7,600 tons of urea did not reach village cooperatives. Instead, private companies were seen selling the commodity at escalated prices on the local market, he said.

"There have also been indications that some of the fertilizer has been smuggled out of the country, especially through areas near the border areas, such as the Strait of Malacca," he said.

Rangkuti said the high fertilizer prices on the international market was generated by the sharp increase in demand from rice- producing countries which, until recently, had only started to develop. These countries include China, Cambodia and Vietnam.

"Prices on the export market can come up to Rp 600 (26 U.S. cents) per kilogram, which is far higher than that on the local market," Rangkuti pointed out.

"Exporters who have a low sense of nationalism will choose to export their stock rather than sell it on the local market," he added.

Rangkuti said that anyone caught smuggling fertilizer should be severely punished for "economic subversion".

Rangkuti dismissed charges that the lack of granular urea on the local market was caused by the government's drive to promote the use of tablet-type urea -- the use of which is still unfamiliar to most rice farmers.

According to media reports, farmers in many parts of the country would grind urea tablets before scattering it in their fields, as they do to granular urea, because they lacked correct information on how to use the fertilizer.

Rangkuti acknowledged that certain local administrations pushed their farmers to use urea tablets, but contended that not many regions had such policies. "Urea tablets make up only 20 percent of the total amount of urea fertilizer used by farmers," he said.

Rangkuti said that factories which compressed granular-type urea into tablets were operated by PT Ario Seto and its factories were small-scaled, with production capacities of 1,000 tons a month.

"Part of the factories' shares are owned by village cooperatives...But in the long run, all the shares will be given to the cooperatives," he said. (pwn)