Many shrimps ponds may be closed due to bad loans

BREBES, Central Java (JP): Hundreds of shrimp ponds located on the northern coast of Brebes regency are likely to be auctioned off by the local State Receivership Agency on Sunday due to bad loans on the part of farmers.

Brebes Regent Syamsudin Sagiman said here yesterday that most of the troubled shrimp-pond companies are currently being evaluated.

If the bad debts are caused by the company's internal problems, he said, the local administration will try to postpone the auction. "But if the problems are caused by the farmers, it is only normal that the State Receivership Agency intervene, since this has to do with lending banks and credit risks," he said.

According to reliable sources, shrimp farmers have been responsible for at least Rp 5 billion (US$2.17 million) in bad loans.

After several boom years for shrimp farmers, the first wave of bad debts came in 1992, when a disease infected and killed numerous shrimp crops.

Sarwedi, 45, a local shrimp farmer, said that in the early 1980s, one hectare of shrimp pond cost only Rp 75 million to manage and could bring in revenues of up to Rp 150 million after six months.

The lucrative business attracted other investors, who entered the business with the help of local farmers. Banks, at that time, were also eager to provide the investors with credit.

"In fact, the banks came to us, explaining the requirements and procedures needed to get credits. All we needed to do was complete the requirements and we got the money," Sarwedi told The Jakarta Post.

Syamsudin said the disease which broke out in 1992 was caused by deposits of shrimp feed on the bottom of the ponds which built up over several years. The feed became toxic because it consisted of various chemical substances which reacted with the water.

"As a result, the ponds became polluted and many of the shrimp either became ill or died," he said.

Other experts, however, said the disease was caused by polluted river water which flowed into the ponds before it entered the sea.

The situation caused shrimp farmers to suffer continuous losses and they were later unable to repay their bank credits. "This started in 1992, together with the drop in shrimp prices," Syamsudin said.

Currently 12 farmers managing 100 hectares of shrimp ponds have allowed the State Receivership Agency to put their ponds up for auction, while others are still hoping the bank will give them another chance to manage their ponds.

But another group of farmers has decided to have nothing to do with their troubled ponds and have instead opened new ponds in other areas like Cilacap in Central Java, and Lampung. (wah/pwn)