Lombok harvests tobacco

MATARAM, West Nusa Tenggara (JP): West Nusa Tenggara Governor Warsito launched yesterday the start of a five-month long "grand tobacco harvest" during which an estimated total of 10,500 tons of Virginia and blended tobacco leaves will be yielded.

Warsito, who symbolically picked the first tobacco leaves during the ceremony, said that based on an average price level of Rp 3,000 (US$1.33) per kilogram last year, tobacco contributed up to Rp 600 million in revenues through duty payments to the provincial administration.

Tobacco farmers in Lombok are currently supervised by eight companies, including PT BAT Indonesia, PT Djarum, PT Trisno Adi, and state-owned PTP XXVII, which have responsibility to assist farmers by providing credits for their plantations, selection of seeds, harvesting and guaranteeing a market for their yield.

Floor prices for tobacco for each harvesting period is currently determined through negotiations between the managing companies and farmers, and arbitrated by the Ministry of Agriculture's local plantation office.

Soerono, the head of the local plantation office, said that floor prices which are recommended by a gubernatorial decree, may be reviewed if prices fluctuated on the market.

Gunawan Widjaja, BAT's corporate affair director who also attended yesterday's ceremony, said that BAT has always abided by price commitments "even though prices may fall afterwards."

H.M. Syafei, a local tobacco farmer supervised by BAT, said that he has always sold his yield to the company, in spite of better prices offered by traders.

"Sometimes we don't get the prices we ask for because BAT already stipulated an average before the negotiation starts. But at least we are always guaranteed a certain amount of profit (from the committed price)," he said.

Warsito yesterday also opened BAT's new storage and packaging facilities where oven-dried tobacco leaves are packed and sent to the company's filter cigarette factories in Cirebon, West Java.

The company produces cigarettes with brand names such as Lucky Strike, Ardath and 555. (pwn)