Lombok harvests tobacco

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)