Government plans to raise fertilizer handling fees

JAKARTA (JP): The government will raise fertilizer handling fees for village cooperatives and retailers, and increase fertilizer stocks by 10 percent to 4.4 weeks of consumption, said Minister of Industry and Trade Tunky Ariwibowo.

"We don't know the exact fee yet, as the minister of finance has yet to issue a ruling. But the increase should be between 17 and 30 percent," Tunky told the press here yesterday after launching a supplement on small industries in the economic daily Bisnis Indonesia.

Currently, the fertilizer handling fee for village cooperative dealers is Rp 2,131.8 (91 U.S. cents) per ton, for village cooperative retailers Rp 2,750 per ton and for the distribution from districts to sub-districts is Rp 9,223.96 per ton.

Tunky said that the government needs to raise the fees because the current fee doesn't cover handling costs.

"The fees fertilizer distributors and retailers are paid should cover their operational costs. We hope that with this increase, the distribution of fertilizer all over the country will proceed smoothly," he said.

Asked by reporters whether the low fees had caused the scarcity of fertilizer on the ground, Tunky side-stepped the issue by saying: "I don't want to confirm this, everyone has their own costs. Some have low costs, but others may have higher costs. That is simply business," he said.

Replying to the same question, Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya, who accompanied Tunky at the launching ceremony, answered: " That is your own conclusion. You should remember that the government has not raised fees for the last 10 years."

Farmers in several provinces have been complaining of a shortage of fertilizer which had caused the agrochemical's price to rise above government-set levels.

In several districts farmers have been so frustrated by the suspicious shortage of fertilizers that they have vandalized their cooperative buildings.

Tunky said that the stock increase would raise the volume of fertilizer subsidized by the government during the current fiscal year, starting this month, from 3.5 million tons to 4.2 million tons.

The government, said Tunky, has also asked the state-owned fertilizer company PT Pusri to help cooperatives improve their stock and distribution management. (13)