State plantation firm suffers huge losses

JAKARTA (JP): The state plantation tobacco company in Jenggawah, East Java, has suffered more than Rp 1 billion ($440,000) in losses through fires and vandalism as a land conflict in the area heightens.

Minister of Agriculture Sjarifudin Baharsjah disclosed the losses yesterday after meeting with executives from PTP XXVII, the state tobacco company, at his office.

Asked about how the company plans to cover the losses, Sjarifudin replied "Like any other company, it will have to recuperate its losses through hard work."

Violence erupted on Monday again despite calls for calm from the local military command. The violent land dispute began last week when angry farmers raided the company's office and ransacked its contents.

On Monday, seven PTP XXVII warehouses were burned to the ground. Local villagers simply watched, refusing to help extinguish the fire, according to reports from the area.

Minister Sjarifudin said yesterday he had asked the plantation executives not to be provoked by the latest incident, and urged them to cooperate fully with local security agencies in trying to resolve the matter.

The government, he added, fully supported PTP XXVII on the issue, insisting the presence of the company benefits the locals.

The conflict erupted last week after the farmers learned that the government had extended the leasehold of the land, which they have been tilling, to the plantation company.

The farmers have grown tobacco for seven months of every two years in return for the right to till the land.

Sjarifudin said the farmers are reaping benefits from the arrangement because they have complete liberty in running their plot for 17 months. "And even in the seven months when their land is used to plant tobacco, the farmers are recruited as employees."

He pointed out that the plantation company does not ask for anything in return for renting out the land for 17 months. (pwn/emb)