Minister admits anomaly in sales of fertilizer
Minister admits anomaly in sales of fertilizer
JAKARTA (JP): The Ministry of Agriculture admitted yesterday
that malfeasance occurred in the distribution of subsidized
fertilizers earmarked for farmers.
Mohammad Jafar Hafsah, the secretary of the Mass Guidance
Engineering Unit (Bimas) of the ministry, said much of the
subsidized fertilizer ended up instead with plantation companies.
He said the probe was still underway into the amount of
government losses caused by the irregularities.
"I can't give you the amount of the loss of the subsidy
because we are still investigating it," Jafar said after a
hearing with House of Representatives' Commission III for
forestry and plantations, agriculture, transmigration and food
affairs.
Bimas, established in 1967, is assigned to develop the food
crops sector.
The government has subsidized three common fertilizers --
urea, ZA and superphospate 36 -- to assist farmers amid soaring
prices of fertilizers and to boost the country's rice and food
crop production. Subsidies for other types of fertilizers have
been abolished gradually since 1990.
Subsidies are limited to food crops and horticulture farming
and are exclusive for farmers.
Sources at the ministry said many major plantation firms
bought the fertilizers at subsidized prices due to dubious
distribution practices and collusion committed by officials of
state fertilizer producer PT Pupuk Sriwijaya and village
cooperatives.
Most of the misconduct occurred in fertilizer distribution at
the regency level and in village cooperatives' warehouses.
A source said the deviation caused huge losses to the
government.
Jafar said the government would order PT Pusri to distribute
fertilizers directly to farmers to ensure transparent
distribution and help farmers.
Under the new scheme, PT Pusri would distribute a particular
amount of fertilizer according to orders from farmers.
"The move will be taken to cut the distribution chain and to
end the unfair practices."
Jafar also said the government would need around Rp 393.9
billion (US$39.4 million) to lower the price of the Kalium
Chloride (KCl) fertilizer to Rp 1,250 per kilogram.
He said that the country's consumption of KCl fertilizer
reached 315,120 tons this year. The government's subsidy --
which had been abolished -- is 60 percent of KCl's current price
of Rp 2,100 per kilogram.
Early this month, Minister of Agriculture Soleh Solahuddin
announced the government would reintroduce the subsidy on the
fertilizer to boost rice production.
Reduction of KCl use in rice farming resulted in a downward
trend in the country's volume of production, Soleh said. He
attributed the reduction to farmers no longer being able to
afford the fertilizer. (gis)
JAKARTA (JP): The Ministry of Agriculture admitted yesterday
that malfeasance occurred in the distribution of subsidized
fertilizers earmarked for farmers.
Mohammad Jafar Hafsah, the secretary of the Mass Guidance
Engineering Unit (Bimas) of the ministry, said much of the
subsidized fertilizer ended up instead with plantation companies.
He said the probe was still underway into the amount of
government losses caused by the irregularities.
"I can't give you the amount of the loss of the subsidy
because we are still investigating it," Jafar said after a
hearing with House of Representatives' Commission III for
forestry and plantations, agriculture, transmigration and food
affairs.
Bimas, established in 1967, is assigned to develop the food
crops sector.
The government has subsidized three common fertilizers --
urea, ZA and superphospate 36 -- to assist farmers amid soaring
prices of fertilizers and to boost the country's rice and food
crop production. Subsidies for other types of fertilizers have
been abolished gradually since 1990.
Subsidies are limited to food crops and horticulture farming
and are exclusive for farmers.
Sources at the ministry said many major plantation firms
bought the fertilizers at subsidized prices due to dubious
distribution practices and collusion committed by officials of
state fertilizer producer PT Pupuk Sriwijaya and village
cooperatives.
Most of the misconduct occurred in fertilizer distribution at
the regency level and in village cooperatives' warehouses.
A source said the deviation caused huge losses to the
government.
Jafar said the government would order PT Pusri to distribute
fertilizers directly to farmers to ensure transparent
distribution and help farmers.
Under the new scheme, PT Pusri would distribute a particular
amount of fertilizer according to orders from farmers.
"The move will be taken to cut the distribution chain and to
end the unfair practices."
Jafar also said the government would need around Rp 393.9
billion (US$39.4 million) to lower the price of the Kalium
Chloride (KCl) fertilizer to Rp 1,250 per kilogram.
He said that the country's consumption of KCl fertilizer
reached 315,120 tons this year. The government's subsidy --
which had been abolished -- is 60 percent of KCl's current price
of Rp 2,100 per kilogram.
Early this month, Minister of Agriculture Soleh Solahuddin
announced the government would reintroduce the subsidy on the
fertilizer to boost rice production.
Reduction of KCl use in rice farming resulted in a downward
trend in the country's volume of production, Soleh said. He
attributed the reduction to farmers no longer being able to
afford the fertilizer. (gis)