Tue, 10 Jun 2003


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.