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)