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)