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.