Rini's move to supervise clove imports criticized

Rini's move to supervise clove imports criticized

Adianto P. Simamora, The Jakarta Post, Jakarta

The latest move by Minister of Industry and Trade Rini M.
Soewandi to supervise the import of cloves will not be effective
in protecting the interests of local farmers, who have seen the
price of the commodity here fall to record lows, experts said.

Soy Pardede, director of trade at the Chamber of Commerce and
Industry (Kadin), said the government should instead introduce a
high import duty on the commodity.

"Imposing a high import duty is the right solution if the
government wants to seriously help local farmers," Soy told The
Jakarta Post on Tuesday.

The government currently applies a three percent import duty
on cloves.

Ine Minara S. Ruky, an economist at the University of
Indonesia, shared Soy's opinion, saying that raising the import
duty was not against the ruling of the World Trade Organization
(WTO).

"I don't believe that it (the new decree) will be able to prop
up the price and promote farmers' interests,"

"This (decree) is a setback because many countries are now
imposing high import duties on their products," Ine told The
Post.

Ine said that one serious problem with the new import
arrangement was the weak supervising capability of government
officials and institutions.

Following complaints from local clove farmers of falling
prices of the commodity, Rini launched a temporary measure, which
only gives certain importers the authority to import cloves. She
also set up a special team to supervise this new arrangement and
also to study why the domestic price of cloves has been
declining.

Under the decree, issued on July 5, all producer importers
(mostly cigarette companies) must now report to the Ministry of
Industry and Trade before importing cloves.

Director general for foreign trade at the ministry Sudar SA
said importers must submit a proposal to his office which
includes the total amount and time schedule of the imports.

"We will continue supervising clove imports until the price
returns to normal. We really want to help farmers," Sudar told
The Post.

Several legislators of the House of Representatives Commission
V on industry and trade affairs had earlier urged the minister to
temporarily ban the import of cloves in a bid to prop up the
price.

The price of cloves is now only between Rp 19,000 (US$2) and
Rp 20,000 per kilogram, compared to a price of between Rp 80,000
and Rp 90,000 at the end of last year.

Local farmers said the falling price was mainly due to the
massive import of cloves from India and Zanzibar. They also
believe cloves are being illegally imported.

Indonesia produces 30,000 tons of cloves a year, with domestic
consumption amounting to 70,000 tons.

Some 95 percent of the total clove output was absorbed by
local cigarette producers.

According to Rini, the ideal clove price should be between $4
and $4.5 per kilogram.