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)