Fertilizer imports necessary?

Fertilizer imports necessary?

A surprise was delivered by the government yesterday to start off the new year. Three cabinet ministers -- those of trade, cooperatives and trade -- issued a joint statement saying that the government was about to import 200,000 tons of fertilizer in order to surmount the critical shortage of this strategic commodity which is now hitting farmers in several regions of this country.

The government's decision came after severe shortages were reported in several areas. In Trenggalek, East Java, desperate farmers burned down the local Village Cooperative Unit (KUD) office, an act which local security officials considered as having been politically inspired and instigated by others.

The point is that the solution offered by the government to import 200,000 tons of fertilizer is rather surprising because according to reports submitted by two domestic fertilizer plants, PT Pusri and PT Pupuk Kaltim, the domestic supply of the commodity at present exceeds the demand by two million tons.

To import a commodity in the presence of an overabundant supply signals that something is amiss, according to a number of members of the House of Representatives. According to our observation the present fertilizer shortage is a result of flaws in its distribution rather than in the available supply. The logical step to take, therefore, would be to correct the distribution system.

The problem -- as is the case with other commodities whose trade is regulated, such as cement -- is that both the distribution and production of fertilizer lacks transparency. Fertilizer has since long been among the commodities which are exploited by traders to reap big profits. The unfortunate thing is that Village Cooperative Units, which should function as price stabilizers, are often tempted to join in the price manipulation game.

-- Media Indonesia, Jakarta