Rad tape delays reimbursement of clove funds
Rad tape delays reimbursement of clove funds
JAKARTA (JP): Rebutting earlier government predictions, the
privately-controlled Clove Marketing and Buffer Stocking Agency
(BPPC) has announced that the reimbursement of the clove farmers'
compulsory savings would run much slower than expected, due to
"administrative reasons".
"We have planned to start reimbursing the clove farmers'
savings collected from their 1993 harvest in August. But that
depends on the repayment of their savings collected from their
1992 harvest," IDGS Putra, the agency's Secretary General, said,
reported Antara late Friday.
According to Antara, at least Rp 68.7 billion (US$31 million)
of the clove farmers' savings, collected from their 1992
harvests, had yet to be repaid.
Putra said that the farmers' savings collected in 1993 totaled
about Rp 93.58 billion (around US$42 million).
Recent reports said that the agency has so far paid out about
Rp 84.5 billion to the clove farmers, while the cumulative total
of the compulsory savings collected from clove sales in the last
three years reached about Rp 251.1 billion .
The government, for its part, has predicted that all of the
agency's obligations to clove farmers would be fulfilled by early
this year.
The agency is chaired by Hutama Mandala Putra.
Hutama launched a national campaign last November pledging
that the clove board would honor its debts to the clove farmers.
No significant breakthroughs in the reimbursement of the
farmers's savings has been made since then.
Putra reiterated last Friday the agency's determination to
fulfill all of its obligations.
He said that the agency would approach private banks to obtain
more funding. According to Putra, the agency preferred private
banks to avoid "the impression of power play".
Monopolize
Despite initial fierce criticisms from parliamentarians and
economists, the private agency was given rights by the government
to monopolize the clove trade in 1992, and to hold the farmers'
compulsory savings funds in its accounts.
The agency, in cooperation with the government-controlled
National Federation of Village Cooperatives, is the central
coordinator of all Village Cooperatives nationwide. The
government has ruled that cooperatives shall be paid the
government-set floor price of Rp 7,900 per kilogram for the
standard cloves.
However, in practice, for each kilogram the farmers sold to
the board, through their village cooperatives, they received only
Rp 4,000 because Rp 1,900 in compulsory savings and another Rp
2,000 in compulsory equity shares in their village cooperatives
were held back by the private clove agency.
Complicated
Available data shows that the agency never briefed the public,
or the clove farmers, about the administrative procedures,
regarding savings reimbursement, at the outset of the monopoly
board's operation in early 1991.
The complicated procedures were announced only in October
1994, in the form of two Ministerial Decrees issued by the
Ministry of Cooperatives and Small Enterprises.
Agency executives have argued that the procedures - which, for
example, authorized clove farmers to present transactional
invoices - were enforced so that the reimbursement would reach
"the rightful farmers".
The Minister of Cooperatives and Small Enterprises Subiakto
Tjakrawardana, reflecting on the complex reimbursement process,
has said that the clove farmers would get only 30 percent of the
accumulated savings.
IDGS Putra said on Friday that the underlying problems of the
clove trade were caused by "excessive clove supply and shortage
of demand" and "the clove agency's inadequate data about clove
production". (hdj)