JP/13CLOVE

JP/13CLOVE

Clove farmers demand fund ahead of harvest

M. Taufiqurrahman
The Jakarta Post
Jakarta

Representatives of North Sulawesi clove farmers demanded on
Monday that the government provide capital injection to
compensate a potential loss from the plunge in the commodity
price ahead of a major harvest.

Vice chairman of the solidarity forum of the North Sulawesi
clove farmers Ernest Weley said that Rp 200 billion (US$24
million) in zero-interest loan would be adequate to mitigate woes
from the declining trend of clove price.

"Farmers in North Sulawesi are in dire needs of funds to
prepare themselves for the coming harvest period because they are
already short of money," he told reporters after a hearing with
the House of Representatives Commision V on trade and industry.

He said that the fund would be allocated to pay laborers, to
buy new machines, and to finance storage of the commodity.

Clove growers in North Sulawesi -- who account for 70 percent
of the whole population in the province -- are facing a severe
blow from the drop of the commodity price. Currently the price
stands at Rp 12,000 per kilogram and still shows a trend of
declining. As a comparison, the price peaked at Rp 85,000 in mid-
2001.

North Sulawesi produces around 15,000 tons of clove per annum,
or around 25 percent of the total national production of around
60,000 tons. Currently, the domestic demand for cloves -- mainly
from cigarette manufacturers -- reaches 110,000 tons per year.

Ernest said that as the domestic market was still short of
supply, it did not make any sense that the price could drop to
the current level.

"We suspect that there are certain parties who have illegally
imported cloves to close the gap between the demand and supply in
the domestic market," he said, adding that imports of the
commodity had been banned with a decree from the Minister of
Industry and Trade since last year.

He also suspected that major cigarette manufacturers had
played unfair practices by purchasing the clove directly from
farmers while the crops were still half-grown.

"To supply their own needs, cigarette manufacturers also grow
the commodity on their own plantations. It has also contributed
to the price decline," Ernest said.

He said that the fortune of farmers in the Indonesian
northernmost province could further deteriorate in the wake of
the harvest period, when there would be an abundant supply of
clove. He said that the price could fall to Rp 10,000 per
kilogram.