Rp 2.8t available for clove industry

JAKARTA (JP): The National Federation of Village Cooperatives (Inkud) is sitting on more than Rp 2.8 trillion (US$1.2 billion) in assets that are allocated for the buffer-stocking and marketing of cloves, an official says.

The head of the Central Sulawesi office of the Ministry of Cooperatives and Small Enterprises, Siswoyo Yudikuncoro, said Rp 969.5 billion, or almost 35 percent of the funds, comes from the Rp 2,000 compulsory contribution collected on each kilogram of cloves bought by village cooperatives from farmers this year.

The rest of the amount comes from the compulsory contributions collected during the 1992-1995 period (Rp 430.12 billion), village cooperative fees (Rp 138 billion), intervention and stabilization funds from a consortium of five banks (Rp 1.3 trillion) and subsidized loans from the central bank, Bank Indonesia (Rp 50 billion).

Siswoyo said that Indonesia currently produces 100,000 tons of cloves a year on 520,000 hectares of plantations. Domestic demand ranges from between 70,000 and 80,000 tons a year.

To offset the oversupply, which can amount to 20,000 tons per year, the government has urged farmers to convert 220,000 hectares of clove plantations for other commodities such as corn.

Indonesia's clove trade has, since 1992, been controlled by the Clove Marketing and Buffer-stocking Agency (BPPC).

The agency, in cooperation with the government-controlled Inkud, is the central coordinator of village cooperatives nation- wide.

The government -- through Presidential Instruction No. 4/1996, its most recent ruling on the clove trade -- stipulates that for every kilogram of standard cloves the agency must pay the cooperatives the government-set floor price of Rp 8,000.

From this amount, farmers receive Rp 5,000 for each kilogram they sell to their village cooperatives, while Rp 2,000 in compulsory contributions goes to Inkud and another Rp 1,000 is used for the conversion of clove plantations.

Siswoyo said that payments from the BPPC to village cooperatives have been delayed due to the annual oversupply.

BPPC presently has a stock of 350,000 tons, equivalent to three-years domestic requirement, he said.

Inkud consists of 1,112 village cooperatives and 23 provincial-level cooperatives. (pwn)