Sugar row between growers and factories continues

Sugar row between growers and factories continues

Eva C. Komandjaja, The Jakarta Post, Jakarta

The dispute between sugar cane farmers and sugar factories is
heating up with both sides blaming each other for being
inefficient and unproductive, causing a fall in the country's
sugar output.

The Indonesian Association of Sugarcane Growers (APTRI)
chairman, Arum Sabil, told The Jakarta Post that the government
needed to revitalize the nation's sugar factories by replacing
old and manually operated equipment to boost sugar output.

"We urge the government to replace manual with semiautomatic
machinery to increase productivity," said Arum.

Arum, who represents sugar cane growers in the country, also
has asked the government to buy new machinery using the import
tax on sugar.

"PT Perdagangan Indonesia (PPI), a licensed sugar importer,
has contributed Rp 50 billion (US$5.8 million) to the government
from import tax after operating for only three months.

"Therefore, we expect more money from other importers, such as
state-owned plantations (PTPNs), who have been importing sugar
for years. We are quite sure that the government can afford new
machinery with that money," said Arum.

"Out of 31 sugar factories in Java, we have identified 16 that
need to be upgraded immediately as the equipment is very old. We
will make them a pilot project for East Java," said Arum.

However, he could not estimate how much it would cost to
replace manually operated machines with semiautomatic ones, but
he admitted that he had discussed the matter with Director
General of Foreign Trade Sudar S.A at a meeting in Jakarta last
week.

Meanwhile, chairman of the Indonesian Sugar Association (AGI),
which represent sugar factories, Faruk Bakrie rejected Arum's
argument. He asserted that it was the farmers who were
inefficient.

"Money from sugar import taxes should be allocated for the
purchase of new high-quality seeds instead of buying machinery
for sugar factories. There is nothing wrong with our sugar
factories, and they are working perfectly fine. Many of them
already have new machinery," said Faruk.

Faruk mentioned as an example that there were seven sugar
factories in Lampung and two in Medan that already have new
equipment.

"It is true that all sugar factories are still manually
operated, but that is because the government wants to give job
opportunities to local people," he said.

He also said that it would take approximately US$150 million
to install new sugar processing machinery, and it would be a
waste of money if the cane still had a low sucrose content.

"No matter how advanced the machines we have are, if the
sucrose content is low, our country's sugar output would not
increase," said Faruk.

From being the world's largest sugar exporter during the Dutch
colonial era, Indonesia is now the world's second largest
importer after Russia. In 2002, Indonesia produced 1.8 million
tons of sugar, while demand reached 3.2 million tons.

Arum has repeatedly maintained that sugar cane produced by
farmers contains a high sucrose content, which is confirmed by
foreign laboratories.

However, factories always say the sucrose content is too low
to justify their claims that Indonesia needs to import more
sugar, Arum said, adding factories find it more profitable to
import than to produce sugar.

Minister of Agriculture Bungaran Saragih defended sugar
factories and blamed growers for their inefficient farming
practices, saying in Cuba, sugar factories were older than those
in Indonesia, but were still able to produce more.