Pepper farmers want joint marketing body

Adianto P. Simamora, The Jakarta Post, Jakarta

White pepper farmers and traders urged the government on Tuesday to set up soon a joint marketing body to regulate the white pepper trade in a bid to shore up the currently dwindling price of the commodity.

"We need the marketing body; it's the only way for the government to help prop up the low price of the commodity at the farmers' level," said Heryawandi, chairman of the Indonesian Association of the White Pepper Community (Amlapi), which groups white pepper farmers and traders in the islands of Bangka and Belitung, Riau.

Both islands are the country's main white pepper producing areas.

He said pepper farmers were now trying to shift to cultivation of other commodities, as the price of the commodity had been declining for the past few years.

The association made the statement after meeting with Minister of Industry and Trade Rini Soewandi and the International Pepper Community.

White pepper currently commands about Rp 16,000 (around US$2.00) per kilogram (kg), compared with about Rp 80,000 in 1998.

Herwandi said farmers' production costs were as high as Rp 25,000 per kg.

The association said that the decline in price was due to the long marketing chain that existed for the commodity. Some 80 percent of the country's white pepper was bought by Singaporean traders at low prices from local exporters. The Singaporean traders then sold the commodity to end users in other countries at high prices.

"We want to cut this marketing chain. We hope the body can sell the commodity directly to end users," he said.

The ministry has long planned to establish such a marketing body but the Indonesian Association of Pepper Exporters (AELI) has protested the plan, saying it would only hurt the country's exports.

AELI also said the body would limit the number of exporters, possibly leading to monopolistic practices.

Indonesia is the world's largest exporter of white pepper, accounting for 70 percent to 80 percent of the world's supply. The country produces some 40,000 tons of white pepper annually.

The country's white pepper, labeled on the international market as Muntok White Pepper, is mostly produced on the islands of Bangka Belitung. Muntok is the name of a seaport in Bangka.

Indonesia also produces black pepper, but in relatively small quantities.

Apart from Indonesia, other major pepper producers are Brazil, India, Malaysia, Vietnam and China.