FARMERS CAN CONTINUE TO ENJOY ORGANIC FERTILIZER SUBSIDIES

By Andi Abdussalam

Jakarta, Feb 18 (Antara) - The farmers and small-scale organic fertilizer producers welcomed a decision by the House of Representatives, in this case Commission IV on agriculture affairs, to withdraw its decision to lift the subsidy on organic fertilizers.          "I am convinced that 180 raw organic fertilizer producers (UPPO) will be very happy with the decision of the House to maintain the subsidy. They can continue their production again," State-owned Enterprises Minister Dahlan Iskan noted on Tuesday.          In an article sent to Antara several days ago, the minister wrote that a total of 180 small organic fertilizer producers had become restless.          The problem was that the Commission IV of the House had decided to lift the subsidy on organic fertilizer.          He noted that a senior official had sent a letter to the fertilizer company, PT Petrokimia Gresik, informing it about the House Commission's decision to lift the subsidy.          This means that PT Petrokimia Gresik, the only company so far purchasing the UPPO products, has to stop buying the UPPO's raw organic fertilizer.          State-owned PT Petrokimia Gresik, which further processes the raw organic fertilizer into a modern product, buys the raw materials from the UPPOs at Rp1.2 thousand per kg and re-sells it to the farmers at Rp500 per kg, which implies that the government provides a subsidy of Rp700 per kg.          So, if the subsidy on organic fertilizer is lifted, then it will stop PT Petrokimia Gresik from buying UPPOs. This means that the UPPOs will have to close their businesses," Dahlan pointed out.           However, Dahlan Iskan lauded the decision taken by the Commission IV on agriculture affairs of the House of Representatives to maintain the organic fertilizer subsidy for rice farmers.         "I highly appreciate the decision taken by the House to maintain the organic fertilizer subsidy for farmers this year," the minister stated in his short message to Antara on Tuesday.          He added that the decision taken by the House will help the farmers, since their ability to produce their own fertilizer was still far from the amount they really required.         "This is in line with the government's national food resilience program," the minister noted.          In a working meeting with Agriculture Minister Suswono on Monday, Commission IV on agriculture affairs of the House and the government agreed to maintain the subsidy for organic fertilizer in order to help the farmers.          The decision was made based on the fact that farmers' UPPO units were only able to produce about 80 thousand tons of organic fertilizer, while the farmers' requirements for subsidized organic fertilizer in 2013, for example, reached 760 thousand tons.          As per the data received from the Ministry of Agriculture, the total fertilizer available is only 7.78 million tons, of which 800 thousand tons are organic fertilizer.          With regard to the fertilizer shortage, Minister Dahlan remarked that he had directly asked the fertilizer producer firm, PT Petrokimia, to take follow-up steps, by suggesting that small units of fertilizers factories or the 180 UPPOs be reopened.          "I am convinced that 180 units of small factories will be very happy with the decision of the House to maintain the subsidy. It will help them again. It will also help the efforts to continue restoring land function," the minister claimed.          According to the minister, the use of non-organic fertilizers so far has reduced land fertility. In the meantime, by using organic fertilizer, the fertility and land function can be restored.          The Ministry of Agriculture has submitted a proposal for increasing subsidy, which during the current year is only Rp21.04 trillion, or equal to a volume of 9.55 million tons of fertilizer, while the total need for subsidized fertilizer is estimated to reach 13.19 million tons.          Last month, Minister Suswono reported that the allocation of subsidized fertilizer for 2014 will suffice only until November.          He added that his ministry had submitted a proposal to the director for State Budget Affairs of the Ministry of Finance asking for additional funds so that the target of 9.55 million tons of subsidized fertilizers can be reached.          Based on the 9.55 million ton requirement, the amount of funds needed for subsidy for the year 2014 is estimated to reach Rp22.18 trillion. He stated that the existing funds currently available stood at only Rp21.04 trillion, which constituted Rp18.04 trillion for subsidy in 2014 and Rp3 trillion for covering the shortage of subsidy payment in 2013.          The minister explained that with the Rp18.04 budget ceiling, the government can only provide 7.78 million tons of subsidized fertilizers, not Rp9.55 million tons as was earlier planned.          The fertilizers comprised 3.42 million tons of urea fertilizer, 0.76 million tons of SP-36 fertilizer, 0.80 million tons of ZA fertilizer, 2 million tons of NPK fertilizer, and 0.80 million tons organic fertilizer.          "If we calculate it by taking into consideration the real requirement, the stocks will only suffice until November 2014," the minister informed the House of Representatives' Commission IV late last month.          Owing to the fact that a volume of 7.78 million tons of subsidized fertilizer will only suffice until November 2014, the agriculture ministry stated that additional fertilizer and fertilizer subsidies were required.          After all, it can serve as a preemptive effort to tackle replanting cases, which can arise due to floods.          "Through this working meeting, we hope that Commission IV will consider our proposal for additional fertilizer subsidy," Minister Suswono remarked.          With regard to the limited budget allocation for fertilizer subsidy, PT Petrokimia Gresik is considering to reduce its subsidized fertilizer production by about 15 percent.          "We will discuss this with the government and the House of Representatives to ask for additional subsidy allocations through a revised state budget," Widodo Heru Supriyono, PT Petrokima Gresik spokesman, recently noted in East Java.          He emphasized that production cut will take place not only in PT Petrokima Gresik, but also in four other state-owned fertilizer companies: PT Pupuk Kaltim, PT Pupuk Kujang, PT Pupuk Iskandar Muda, and PT Pupuk Sriwijaya, which is the Holding Company.          Widodo explained that in 2013, the government allocated Rp20 trillion for fertilizer subsidy, but this year, it reduced its subsidy to only Rp18.04 trillion.     ***2*** (T.A014/INE) EDITED BY INE (T.A014/A/BESSR/A. Abdussalam) 18-02-2014 22:34: