Sugarcane farmers threaten boycott

Nana Rukmana, The Jakarta Post, Cirebon, West Java

Thousands of sugar cane farmers in the West Java regency of Cirebon threatened to boycott the supply of sugar cane to sugar producers unless the government raised the price of sugar cane, said the chairman of the local sugar cane farmers' association.

Chairman of the Cirebon branch of the Association of Sugarcane Farmers (APTRI) Anwar Asmaili said that farmers demanded sugar mills purchase their sugar cane for at least Rp 3,500 (about 41 U.S. cents) per kilogram.

The minimum price for sugar cane is set by the government, which has recently proposed increasing it by Rp 150 to Rp 3,250.

"If the demand is not met by the government, they (sugar cane farmers) will not release their sugar cane into the market until the government pays the price differential," Anwar said on Saturday.

He said the threat had come from 35,000 Cirebon sugar cane farmers, who supply sugar for markets along West Java's north coast and southern parts.

Without an agreement with the government, he said, the farmers would retain their sugar cane harvest for this year.

Currently, sugar mills throughout the province purchase farmers' sugar cane at a minimum of Rp 3,100 per kilogram.

Anwar said that even with an increase of Rp 150 per kilogram, many farmers would still operate at a loss. He said only sugar came farmers with a high productivity could survive on the revised minimum price.

Farmers also agreed on a 20 percent share for the government if the price of sugar cane in the market exceeded the minimum price of Rp 3,500, he added.

The government has had difficulties regulating the sugar industry, facing protests at low sugar cane prices from farmers on one hand, and steep prices for sugar consumers on the other.

Last year an influx of imported sugar put a strain on farmers who suffered from a fall in sugar prices.

A new policy restricting sugar importers to four state-owned companies, from 800 private importers previously, had only led to a surge in sugar prices among consumers, but not, however, for sugar farmers.

Government officials have blamed the industry's distribution channels for the price disparity. Analysts said that it showed rent-seeking was widespread in the sugar industry.

Anwar said that the West Java administration had offered Rp 5 billion in bailout funds when sugar prices plunged amid the influx of imported sugar last year.

This year, he said, the administration had Rp 17 billion to bail out farmers should prices plunge again. So far, he added, none of the money had been disbursed.