RI cocoa output falling: Askindo

RI cocoa output falling: Askindo

Adianto.P.Simamora, The Jakarta Post, Jakarta

The Association of Indonesian Cocoa Exporters (Askindo) warned
on Wednesday that the country's cocoa output could decline this
year and in years to come unless the government takes steps to
encourage farmers to become more efficient.

Askindo Secretary General Zulhefi Sikumbang told The Jakarta
Post that many cocoa farmers now lacked motivation to take proper
care of their crops due to the declining profit margins from the
increased expenses involved in the production of cocoa.

He predicted the country's cocoa output will fall to 360,000
tons this year from 380.000 last year.

"We are also predicting output to fall to 250,000 tons in the
next five years," he added.

Zulhefi said local farmers are now unwilling to expend the
time and money necessary for efficient production due to the
debilitating pest known as the pod borer, which has been
attacking crops in recent years in many parts of the country.

"In addition to the pest problem, the farmers are also
concerned about the higher production costs involved, including
fertilizer costs, the 10 percent value added tax and the 2.5
percent income tax imposed by the government (on cocoa traders),"
he said.

To compensate for the tax increases, traders often pass on the
cost to the farmers.

Zulhefi also said that Askindo had formally conveyed these
concerns to the government and urged a review of the tax policy.
But, the government has thus far taken no action.

Indonesia, the world's third largest producer of cocoa after
Ivory Coast and Ghana, exports most of its cocoa to the United
States, Singapore, Malaysia and Brazil.

Zulhefi said cocoa exports to the U.S. were expected to
decline to 100,000 tons compared with last year's figure of
120,000 tons.

"The decrease has nothing to do with the recent terrorist
attacks in the U.S. but merely because of the fall of domestic
production," he said, adding that the transport of cocoa from
Indonesia to the U.S. has remained normal despite the attacks.