Govt Reviews Organic Fertilizer Subsidy

Kamis, 13 Februari 2014 | 13:10


The government is reviewing the policy of subsidized organic fertilizer since the budget for subsidized fertilizer may not be sufficient to meet the need of fertilizer up to end of 2014.Agriculture Minister Suswono said the issue came up in a hearing with Commission IV of Indonesian House of Representatives for agriculture.

Right now, the ministry is reviewing the suggestion for all of this time the organic fertilizer becomes part of program that will automatically disturb the set work program whenever it is not subsidized.

“We will conduct a work meeting to evaluate the subsidy policy for there is an objection made from several sides due to the organic fertilizer is made into the program of Integrated Crop Management Field School (SLPPT),” he said, Tuesday (2/11).

This year, the allocation of fertilizer subsidy may only be sufficient to meet the demand up to November. This means there will be deficiency at end of year caused by the production cost increase of subsidized fertilizer while there is no any meaningful additional on budget.

The data as compiled by Agriculture Ministry showed that the volume of subsidized fertilizer in 2014 reaches 7.78 million tons with the details on urea of 3.418 million tons, SP36 of 0.76 million tons, ZA of 0.8 million tons, NPK of 2 million tons, and organic fertilizer of 0.8 million tons. If the subsidy on organic fertilizer is eliminated then there will be budget allocation of IRD1.13 trillion.

Previously, the agriculture expert and Chairman of Indonesian Farmer Seed Bank Association (AB2TI) Dwi Andreas Santosa said the subsidized organic fertilizer from the government has a terrible quality that makes the farmers are reluctant to use the subsidized fertilizer.

“Most of the organic farmers are independent, through the use of 100% organic fertilizer without the government’s support,” he said.

He assessed the terrible quality of organic fertilizer is the effect of subsidy policy performed by the government since the policy creates monopoly conducted by state-owned enterprises which are legally authorized to produce subsidized fertilizer.

“If the subsidy is eliminated then the fertilizer companies will compete to produce qualified fertilizer. The condition is clearly beneficial to the farmers as the fertilizer users,” he said.

In this case, he said, the fertilizer price will automatically increase. This normally happens since the low cost fertilizer is obtained from the subsidy. Therefore, the government should make new program such as credit scheme or direct aid to the farmers.

Meanwhile, Chairman of National Outstanding Farmer Association (NOFA) Winarno Tohir had different opinion. According to him, the organic fertilizer subsidy should not be eliminated since the fertilizer is an eco-friendly fertilizer that brings long term benefit to agriculture land.

“It is better to reduce the subsidy due to budget limitation, especially on urea, ZA, and SP36,” he said to Bisnis Indonesia, Wednesday (2/12).

In the future, Indonesia has designed Go Organic program which is actually contrast to the subsidy elimination plan.

In Bandung, the Food Agriculture and Plant Service (Diperta) of West Java urged the Commission IV to abort the decision on organic fertilizer subsidy elimination. Diperta Head of Resources in West Java Wawan Wintarasa said the subsidy elimination will affect the agriculture land fertility. (t11)  

by M Taufiqur Rahman,Renat Sofie
source http://business.bisnis.com