Fertilizer prices to remain low and benefit farmers
Fertilizer prices to remain low and benefit farmers
JAKARTA (JP): The government will increase fertilizer supplies and improve distribution system across the country to keep prices low and protect farmers from speculative traders, an official of the Ministry of Agriculture says.
The secretary of the operation board of the ministry's Extension Service Agency, Syamsuddin Abbas, said that for this reason a new distribution system will be implemented starting this (1996/1997) planting season.
"The new mechanism will be stated in a decree issued by the Minister of Industry and Trade," Syamsuddin told reporters at a breaking of the fast gathering on Thursday.
The issue of fertilizer distribution emerged after the widely reported countrywide shortages of fertilizer, which continued from last December until last month.
The government said the shortages were caused by an early planting season this year, and the inability of fertilizer producers to meet the sudden increase in demand.
Several analysts suspected, however, that the shortages were due to speculations by traders who bought large amounts of supplies from the storehouses of state-owned PT Pupuk Sriwijaya and held back the stocks to raise prices.
Pupuk Sriwijaya and state-owned PT Petrokimia Gresik are major fertilizer manufacturers which have been appointed by the government to handle the distribution of fertilizer.
Syamsuddin explained on Thursday that the regions of fertilizer distribution in Indonesia were presently divided into three categories.
Regions that fall into category A are those that are equipped with sound infrastructure facilities which facilitate distribution, such as those in Java and Bali. Category B consists of regions whose infrastructure is of medium quality, which includes areas in Sumatra and South Sulawesi.
The other regions fall into category C, which are those which have the minimum level of distribution facilities.
Syamsuddin said the government presently stipulates that category A regions must have enough an extra two week's supply of fertilizer in their warehouses.
The new stipulation, he said, will require them to have one month of extra supplies.
Category B regions, which are presently required to have an extra month's supply, will be required to hold stock for an extra 1.5 months.
Meanwhile, the stock requirement for regions in category C will remain the same, an extra two months of supplies.
Syamsuddin said there would be no problem with the storage because "everything has been prepared". Pupuk Sriwijaya, he added, was also experienced in the field.
He did not elaborate, however, how the financing would be done.
Urea fertilizer production reaches six million tons a year and consumption reaches four million to 4.5 million tons.
Superphosphate-36 fertilizer production is currently one million to 1.1 million tons, while consumption is 1.2 million tons. (pwn)