Many shrimps ponds may be closed due to bad loans

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)