Govt welcomes fertilizer distribution proposal
Govt welcomes fertilizer distribution proposal
JAKARTA (JP): Village cooperatives will soon become more
active in the distribution of fertilizers.
Director General of Food Crops and Horticulture Amrin Kahar
said his office is in favor of the idea up to the consumer level,
but emphasized that the village cooperatives involved in
distribution should belong to farmers.
"Fertilizer distribution should ideally be done by farmer-
owned cooperatives so the farmers can enjoy the profits...I
welcome the proposal because I'm on the farmers' side," he said
on Tuesday.
Executives of the Association of Village Cooperative Units
(Inkud) said on Tuesday that village cooperatives, for example,
hope to take over the distribution of superphosphate-36 (SP-36)
fertilizer from state-owned PT Petrokimia Gresik.
Inkud's president, Jeff Mustapha Atmaja, said the cooperatives
would first handle distribution in Java and, if successful,
expand to other islands.
In two years, he said, Inkud should be able to handle
fertilizer distribution for the entire country.
Jeff said that if the proposal is approved Inkud would begin
distribution by April.
The distribution of fertilizers is currently carried out in
four stages.
The first level involves the transportation of fertilizer from
producers to shipping ports; the second from ports to storehouses
owned by producers in regencies; the third from storehouses to
village cooperatives; and the fourth from village cooperatives to
consumers or farmers.
The first three levels are presently carried out by Petrokimia
(for TSP, SP-36 and ZA fertilizers) and state-owned fertilizer
manufacturer PT Pupuk Sriwijaya (for urea fertilizer).
The third and fourth levels are overseen by "distributor-
cooperatives", which transport the fertilizer from storehouses to
"dealer cooperatives". The latter then sell directly to farmers.
Capital
Jeff said that to carry out its proposal, Inkud would need an
additional Rp 300 billion (US$131 million) to cover such
operational costs as transportation and packaging, which are
currently handled at storehouses.
The issue of fertilizer distribution emerged after the widely
reported country-wide shortages of fertilizer, which continued
until last month.
The government said the shortages were caused by an early
planting season this year, and inability fertilizer producers to
meet demand.
Inkud executives said the shortages occurred at the third
(storehouse) level.
Inkud chairman Rapi'i said that currently the cooperatives can
do nothing to overcome the supply shortages because the present
system does not allow them to buy fertilizer directly from the
first or second levels.
Rapi'i suggested that it would be more effective and cost-
efficient if Inkud handled the overall distribution lines, so
news of any shortages would be reported directly to producers.
(pwn)