Jakarta, Oct 15 (Antara) - Seeing rising sugar mill inefficiency from high costs, low productivity, decreasing sugarcane plantations and idle capacity, the state enterprises ministry is considering shutting down 10 sugar factories.
This idea contradicts Agriculture Minister Amran Sulaiman's plan when he said last April that he would build 10 new sugar mills to push up sugar production. The minister planned to build new factories as Indonesia so far still imported some 50 percent of its domestic needs which reached about five to six million tons per annum.
State-owned plantation companies (PTPNs) held a meeting with the deputy for agro-industry and pharmacies of the Ministry of State Enterprises, Wahyu Kuncoro, on October 6 and reportedly agreed to the closure.
However, the state enterprises ministry plan to close down the mills (PGs) has been rejected by sugarcane farmers.
Chief Patron of the Indonesian Sugarcane Farmers Association (APTRI), Arum Sabil firmly rejected the plan of the state enterprise ministry to close down nine mills in Java and another one outside Java.
"The closure of the factories will kill sugarcane farmers and reduce national sugar production," Arum said, and added that if the government went ahead with its plan he and the farmers, as well as employees of sugar factories, would take a common action.
The 10 sugar mills are PG Kanigoro, PG Rejosari, and PG Purwodadi in Madiun (East Java); PG Toelangan and PG Watoetoelis in Sidoarjo (East Java); PG Meritjan in Kediri (E Java); PG Wringinanom, PG Pandjie, and PG Olean in Situbondo (East Java); and PG Gondang Baru in Klaten (Central Java).
The same rejection also came from East Java Governor Soekarwo. The governor is planning to send a letter to the central government on the plan to close factories in his province. The letter would be sent to the chief economic minister, Darmin Nasution.
"I will send the letter because I do not agree with the closure of the sugar mills which have been operating since the Dutch era," Kata Soekarwo said Friday.
The people of East Java have a culture of planting sugarcane and will face problems if they are asked to diversify and plant other commodities.
"The closure of the sugar factories will reduce the number of workers and increase the number of the unemployed. So, I do not agree with the closure of the factories," Governor Soekarwo said.
The governor through the letter sent to the chief economic minister and the state enterprises minister asked the government to improve the country's sugarcane seedlings so that the productivity of the national sugar production would increase.
"If the production is to be increased, efforts to improve production must be made beginning from sugarcane seeds and processing facilities so that the sucrose content is high," the governor said.
The task of the state enterprise ministry is not merely to seek for profit but also to carry out social services, so that it does not close down factories without any solution in sight, according to the governor.
In the meantime, the Sugarcane farmers' community (PPTR) chairman for Jember District, M. Ali Fikri, said the plan to shut down the factories is still a discourse. The issue has been going on since 2010.
"I still do not see any seriousness on the part of the government to close down or regrouping the factories, particularly factories within the PTPN XI. The discourse has been there by the government and the company's management since long," he said on Wednesday (October 12).
In 2010, the same discourse was raised for seven sugar mills in the PTPN XI in Situbondo, Probolinggo and Madiun districts, yet it was never implemented, he said.
"If the discourse re-emerges again, it is only because there is a triggering condition. Since the end of 2015, the country has begun to implement the free trade area (AFTA) in the ASEAN Economic Community," he said.
This condition requires all production, including Indonesian sugar, to be competitive in terms of price and quality. In that context, Indonesian sugar still faces difficulties in competing with sugar from Thailand.
High production cost and old sugar mills in Indonesia are not able to increase the quality and competitive edge of the country's sugar so it would reasonable if the state enterprise ministry is trying to rationalize the number of factories and make them efficient. This is by regrouping the factories to reduce production cost.
After all, the country's sugar plantations are decreasing leading to dwindling capacity at sugar mills. They can no longer mill an ideal volume of sugarcane as the raw material is falling short.
APTRI Chief Patron Arum Sabil admitted that had also received reports on the inefficiency of sugar factories due to sugarcane low sucrose content, resulting from the wet climate. Yet he could understand the farmers' restlessness and disappointment.
He promised to discuss the problem with the ministry of state-owned enterprises and the state-owned plantation companies.
The government is responsible for providing high-yield varieties of sugarcane, which can produce high sucrose content and quality and is resistant to the wet climate.
Arum cited as an example the four seasons in Australia, where the sucrose content of sugarcane remains high because the plantations have good sugarcane variety, good factories, and good yields.
APTRI Treasurer Sunardi Edy Sukamto noted that his side regretted the discourse among the managers of state-owned sugar companies to shut down the sugar factories in Java.
He said sugarcane farmers in East Java had discussed the plan to shut down the factories in 2017 with the APTRI branches.
One of the points raised was the need to quickly revitalize the sugar mills. Since the farmers are not responsible for the inefficiency of sugar mills, they argued that they should not be made to suffer for the poor output.
The state should instead establish sugarcane mill and sugarcane plantation revitalization programs. The plan to close down the factories was the result of a hasty decision. ***3***(A014/INE)EDITED BY INE(T.A014/A/BESSR/F. Assegaf) 15-10-2016 15:29:4 |
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