BioTani Indonesia: Organic fertilizers Subsidy, APBN (the state budget) vs Private locals:

Organic fertilizers Subsidy, APBN (the state budget) vs Private locals:

The Master Hit by His Own Bullets caused by Unfair Competition?

Compiled by: Riza V. Tjahjadi

Riza V. Tjahjadi (10/01/2010) posted in biotani blogspot: ... as seen in the eyes compost producers, namely PT Komposindo Granular Arendi, with a trademark Rabog in East Jawa, price subsidy given to two state-own the fertiliser companies, in turn, have creating unfair competition in the market. Then in the first quarter 2011 the issue became stronger articulated – since Fertilisers Direct Assistance scheme inserted within subsidy fertilisers in the 2010 state budget..

No news report about the benefits ”Bantuan Langsung Pupuk” (BLP) or Fertilisers Direct Assistance scheme for farmers, but local producers of organic fertilisers louder scream: unfair competition that will make bankrupcy.

This is the story of local manufacturers of Petroganik which have been working toward the allocation of organic fertilisers within the state budget. Other organic fertilisers manufacturers which have been working outside the state budget excluded.

Low absorption of organic fertilisers, the producer asked the retail ceiling price lowered. Although organic fertilisers was assumed able to improve the quality of agricultural production, but until now the use of organic fertiliser at the farm level is still very low.

This is because organic fertilisers prices are still high, so it is not affordable by the farmers.

Therefore, the producers asked the government to lower the retail ceiling price (harga eceran tertinggi, HET) fertilisers.

Chairman of Asosiasi Pupuk Petroganik Indonesia (AP2I) or the Association of Fertiliser Petroganik Indonesia Ardianto Wiyono said, in 2010 and the government allocates for the organic fertiliser subsidies and fertilisers direct assistance (bantuan langsung pupuk, BLP) of about 650 000 tons. "But of that total, sales of organic fertilisers from our production is only 211,000 tons.

"As for the organic fertilisers with BLP scheme is as much as 319,000 tons, "he said after a hearing with Commission IV of the House of Representatives on Thursday (Kontan, 17/2/2011 ).

In fact, now there are about 180 producers of fertilisers Petroganik incorporated in AP2I a ready supply of organic fertiliser. The total production capacity of manufacturers of organic fertilisers this AP2I members of 2 million tons. "Due to low absorption, this year we do not produce and to trade stocks just by relying on last year," said Ardianto.

Based on data AP2I, fertiliser sales petroganik AP2I since 2008 until now did not undergo much develop. In 2008, when the program was launched organic fertiliser, production of fertiliser Petroganik reached 87,516 tons, and only 69,258 tons were absorbed.

In 2009, production of 323,507 tons of fertiliser Petroganik, and absorbed only 231,764 tons.

"In 2010 the absorption of fertiliser Petroganik decreased to 211,000 tons. Though production reached 307,986 tons," said Ardianto.

Just so you know, when this ceiling retailer price of organic fertiliser to Rp 700 per kg. Although the price include subsidies, but the purchasing power of farmers is still low enough to make farmers still more choosing chemical fertilisers. "We ask the government to lower the ceiling retailer price (Harga Eceran Tertnggi, HET) of organic fertiliser into the RP 250 per kg," Ardianto said.

In addition to the price, he said that the dualism of subsidised fertiliser distribution mechanism makes the absorption of organic fertiliser was not optimal. Ardianto said, there are currently two

mechanism of the subsidy and the BLP. Distribution of subsidised of organic fertiliser carried out by AP2I, while the distribution of organic fertiliser with BLP scheme conducted by Asosiasi Produsen Pupuk Organik dan Hayati Indonesia (APPOHI) or the Association of Producers Organic and Bio Fertilisers Indonesia.

This year (2011), the government allocates subsidy of about 900,000 tons of organic fertilizer. "If HET down, I'm sure the target allocation of subsidised organic fertilisers can be absorbed by the farmers. For, if the price goes down, the public interest to buy the higher" he said.

Board Chairman Fertiliser Indonesia Zaenal Sudjaiz revealed , farmers in Indonesia still has a fairly high level of dependence on chemical fertilisers. In addition, "Socialisation of organic fertiliser is still not enough. Promotion of the government is still very small," he said.

http://investasi.kontan.co.id/v2/rea...HTE-diturunkan

If monetised allocation organic fertilisers subsidy in 2011 was around 900,000 tons at a price of Rp700 per kilogram, then its value is Rp 630 billion; FYI, 1U.S.$ = Rp 8,600. As observed Bantuan Langsung Pupuk (BLP) or Fertilisers Direct Assistance subsidy scheme inserted within the fertilisers subsidy in the 2010 state budget.

News report by Suara Pembaruan evening newspaper (21 February 2011) Wiyono Ardianto stated about the different treatment applied by the government through the provision of fertilisers direct assistance (BLP) carried out by three state-owned enterprises (SOEs), namely to PT Sang Hyang Seri, PT Pertani, and PT. Berdikari by more than 300 thousand tons per year. This report was different from Kontan newspaper (17 February 201) which mentions the distribution of BLB performed by APPOHI.

"That means farmers can get for free organic fertilisers," said Ardiyanto in Jakarta that time.

Petroganik is an organic fertiliser produced by PT Petrokimia Gresik. To increase production to meet organic fertiliser allocation as contained in the fertiliser subsidy in the budget, then the the state-owned fertiliser companies (PT Petrokimia Gresik) the partners took small and medium enterprises (SMEs) throughout Indonesia. Despite getting subsidies, Petroganik unable to compete with organic fertiliser through BLP scheme provided free of charge to farmers. Since April 2010, the ceiling retail price (HET) Petroganik increased from Rp 500 to Rp 700 per kg.

"This policy is not synergistic. We have to compete in the same place with the same product. How can we compete with a fertilizer that is distributed free of charge, while farmers have to pay Rp 700 for Petroganik, "he said. [Id/h-12]

In following month, Friday, 25March, 2011 Antara news agency reported a number of manufacturers of organic and bio fertilisers in various areas threatened bankruptcy because the market place price disparity between subsidised organic fertilisers with nonsubsidised organic fertilisers.

'Subsidised organic fertilisers is very detrimental Petrochemicals issued similar fertiliser producers are not subsidised amounts to hundreds scattered in various areas, "said Chairman of the Association of Producers of Organic and Bio Fertilisers Region of Central Jawa, Mohammad Bisri, in Magelang, Thursday (24/ 3/2011 ).

He said, 40 of about 500 producers of organic fertilisers, located in Central Jawa with hundreds of billions of Rupiah of assets. 'We fail to thrive, even threatened with bankruptcy because since the last two years on the market supply of organic fertiliser at the subsidised price is far below the prices of similar fertilisers produced the producers,' he said.

The subsidy provided by government is good objectives which concerned about the farmers and serve the interests of society. However, the problem is different from urea fertiliser factory which produced only one PT Pusri, while the organic fertilisers produced by many local manufacturers so it may not be able to compete with petrochemical who sold pursuant to the government of Rp700 per kilogram after receiving a subsidy of Rp800 per kilogram.

”The sale price of organic fertilisers produced by hundreds of manufacturers around Rp1.500 per kilogram. In terms of quality may be better, but if such a trading system, how can we compete with Petrochemicals, 'he said.

The Association hope, the government should not set discriminatory scheme. Till now there are provisions by the distributors anyone buy urea fertiliser should also purchase organic fertiliser, namely Petroganik produced by PT Petrokimia. The organic fertilisers producers asked that the government apply nondiscriminatory treatment. If that produces this type of fertiliser is only one factory, regardless of subsidy provided by the government will not create problems.

As said the producers are ready to receive orders of government to meet national needs. Every year, producers who are members of the association are able to produce approximately six to eight tons, while the national requirement of about nine to ten tons.

'However, if the government imposed an unfair way, hundreds of manufacturers of organic fertilisers threatened bankrupt. Though the asset to a manufacturer reach four billion Rupiah with an average workforce 40 to 50 people, 'said Bisri.

It is said, to address the fate of producers in Central Java, they will go to the Governor of Central Java in order to find solutions of differences in market prices. 'We hope the governor can give out the best way,' he said. (Ant)

***

Trimming Fertiliser Subsidy Not Do This Year; Maximum Use Organic Fertiliser 50%

Members of the House of Representatives Commission IV Chairun Herman said the government plans to make cuts in chemical fertiliser subsidies will not be done in the year 2011. "There are no plans cuts in fertiliser subsidies this year, raising only the highest retail prices. So when prices rise, only the quantum of chemical fertilisers has changed," Herman said when contacted Neraca, Tuesday (12/4/2011).

According to Herman, as far as Indonesia is still positive conditions for agriculture, production growth was still in the range 2-3%, so the government has not planned to cut the chemical fertiliser subsidy.

Meanwhile, Chairman of Kontak Tani dan Nelayan Andalan (KTNA) or Contact Farmers and Fishermen Leaders, Winarno Tohir reveal, plans cuts in fertiliser subsidies by the government was really the issue. But if it does happen, then it obviously will affect government programs that want to achieve food self-sufficiency.

If you want to cut subsidies on fertilisers, added Winarno, should subsidies for urea alone. While subsidies for NPK fertilisers should not be trimmed first. "Because if both are reduced will have a big impact on agriculture," explained Winarno.

He asserts, in principle, farmers will be refused if there are cuts in fertiliser subsidies. "But with current economic conditions, where the oil price shock experienced, so we also try to understand. Because if the price of fertiliser goes up, then automatically the government buying price (HPP) also go up, "he explained.

Earlier, the Minister of Agriculture Suswono stated, the Government will cut the fertiliser subsidy in the Budget of the State-Revision (APBN-P) in 2011. The reason, as long as there has been leakage of subsidised fertilisers.

According to the Agriculture Minister, currently the volume of subsidised fertiliser is reduced due to the shift of farmers using organic fertilisers. Tightening supervision of the distribution of fertilizers through the Definitive Plan Needs Group (RDKK) has been effective thus reducing leakages distribution of fertiliser subsidies.

"Because of reduced fertiliser use in the community because of the impact of increased use of organic fertilisers. There is again due to factors such as tightening control of fertiliser distribution. With RDKK, could reduce consumption. So assuming there has been a leak means that there is truth, "explained Suswono.

(but the minister denied the fact: low absorption of organic fertilisers as data above; RVT)

Thus, further Suswono, the Government will revise the amount of fertiliser subsidy in the state budget 2011 with a reduction in the volume of subsidised fertilisers. "In the revised budget then we are being recalculated, meaning with no increase the ceiling retail price (HET) fertilisers, it reduced the volume," he explained.

Agriculture Minister also revealed that fertiliser prices will not rise this year. The ministry of Agriculture in 2011 to allocate a budget for fertiliser subsidy of Rp 16.38 trillion for the total volume of 11.28 million tons of fertiliser.

"What is clear is the price of fertilisers does not rise, of course it will reduce the volume. Basically, the farmers until the end of the year there will be a subsidy, "he said.

Observers of agriculture from the Bogor Agricultural University (IPB) Hermanto Siregar said the steps taken by the government are quite right. Only, subsidies for chemical fertilisers are not deleted but diverted to encourage the use of organic fertilisers.

According to him, today farmers tend to balanced fertilisation. Therefore the use of chemical fertilizers is reduced. "With the balanced fertilisation, the structure of agricultural land also becomes better. The soil is more loose," he explained.

Nevertheless, he added Hermanto, chemical fertilisers is still needed because the agricultural land is also not fully allowed to use organic fertilisers. "It should be fifty-fifty. Because there are ingredients in the chemical fertiliser that is not contain in organic fertilisers," he explained.

Hermanto said, over the use of organic fertilisers by farmers should be gradual. "If this year's new organic fertiliser usage by 15%, then the next year is about 20%. But the maximum use of organic fertiliser is should only 50%, "he explained.

On that occasion, Hermanto also reveal, there are still exists the problem of scarcity of fertiliser in recent years, rather than caused by a closed distribution system is wrong, but many actors involved. "The issue of fertiliser distribution usually occurs only in the IV line. That there may be unscrupulous traders who involved, "he explained.

***

PT. Petrokimia Gresik

As being known PT. Petrokimia Gresik located at Gresik and being the most complete of fertilisers plant in Indonesia. Up to 2009 the production capacity of fertilisers 4.330.000 tons per year, whereas the capacity of non fertilisers is 1.647.600 tons per year.

Petroganik fertiliser plant development strategies carried out by PT Petrokimia Gresik

through franchise scheme, namely through local investors also become an important breakthrough in 2009. Until 2009, there were 168 factories that have been producing petroganik fertiliser. The production capacity of each plant of 10,000 ton/ year/ plant. The location is scattered in various areas which became a partner.

PT Petrokimia Gresik expeted fertiliser plant Petroganik by end 2010 can reach 367 franchisees operate. Production of fertilisers Petroganik a 10,000 ton/ year in 2005 meanwhile the total of Chemical fertiliser Plants/ Capacity 16 4.33 million tons/ year.

The realisation of organic fertiliser from year to year continues to grow. From 2008 to only 4,000 tons, then in 2009 reached 13,000 tons and rose again in 2010 reached 17,000 tons. (Ant.: Allocation of 58,000 tons, which had absorbed only about 29.36% or about 17,000 tons)

PT Pupuk Kujang, Pilot Plant Organic Fertiliser

• In order to repair and improve the quality of the current agriculture has declined caused by excessive use of inorganic fertilisers and in a long time, PT Pupuk Kujang since 2008 has developed an organic fertiliser Kujang. Kujang developed Organic Fertiliser is an organic fertiliser made from compost and organic materials enrichment.

• Till 2009, PT Pupuk Kujang has operated the unit with a capacity of 18,000 tons of Organic Fertiliser and Compost Unit Pilot Plant with a capacity of 360 tons/ year. And this time improvements have been made of organic fertiliser production equipment and building its own organic fertiliser factory which was completed on December 9, 2009. Production of organic fertiliser internal units in the period December 9, 2009 to December 31, 2009 amounted to 856 tons. www.pupuk-kujang.com.id

PT Pusri

The Palembang, South Sumatra-based PT Pusri is the parent company of several state-owned fertiliser producers including PT Petrokimia Gresik in East Java, PT Pupuk Kujang in West Java, PT Pupuk Kaltim in East Kalimantan and PT Pupuk Iskandar Muda in Aceh.

In February, the government announced plans to restructure six urea factories and construct four new organic fertilizer factories to support its plan to be a major fertilizer producer in the world (The Jakarta Post, Jakarta,| Sat, 07/02/2011).

In January 2009 Pusri was reported has set partnership scheme.

As a pioneer of national chemical fertilisers, PT Pupuk Sriwidjaja (Pusri) continue to innovate. One of them by developing organic fertiliser products are enriched with microbes.

Named Organic Fertiliser Pusri Plus, one product of this development serves to improve soil texture and structure. Because it contains an additional ingredient, a microbial strain that serves as the biological fixation of nitrogen, phosphorus and potassium solvent. And spur growth and disease control.

"Having built in Palembang in 2005, our recently inaugurated three other organic fertiliser factory, such as in Cianjur, West Jawa, dated December 22, 2008, in Lumajang, East Jawa dated January 12, 2009 and the new one today in Sragen Central Jawa, "Firdaus said (16/ 1/2009 ). Each plant capable of producing up to 3 thousand tons/ year.

Well, in order to meet the needs of organic fertilisers in the form of Public Service Obligation (PSO) for 2009 set by the government as much as 450 thousand tons, PT Pusri offers business opportunities to all layer with the partnership. "It aims to accelerate the achievement of national organic fertilizer production capacity. In addition to improving the real sector growth in the region, "he said.

In this program, partners will get a license to sell a brand of organic fertiliser of Pusri, namely "Pusri Organic Plus". Pusri itself, as the owner of the brand and technology, will provide all the technical needs of the manufacturer. Starting from the assessment of investment feasibility and basic design package, to technology transfer.

"We will also supply bio-decomposer microbial strain and continuously. This is typical, to distinguish organic fertiliser made by other manufacturers PT Pusri. In addition, we will provide training plant operators and salespeople, "he said.

The conditions that are set by PT Pusri to prospective business partners, including a building area of 20x25 meters, a strategic location close to the source of raw material, has a capital investment and willing to follow the prevailing system as business partners PT Pusri (Sumatera Ekspress Senin, 19 Januari 2009).

***

Further information to Poster

In 2008 the ministry of agriculture has built Rumah Percontohan Pembuatan Pupuk Organik (RP3O) or Houses for Pilot Production of Organic fertiliser 100 units, in 2009 RP3O as much as 150 units. In 2010 the house pilot program was continued, according the directorate fertilisers and pesticides (2011), RP3O much as 435 units and for 2011 RP3O will be built as many as 266 units.

Total Units APPO 1.086, compost house/RP3O/UPPO 2,578 units, and as many as 47.695 heads of cattle. If the entire infrastructure of organic fertiliser maker may be optimal, then the amount of organic fertilisers produced by the farmers as much as 5,496,000 tons per year (assuming a unit capable of processing machine APPO/RP3O/ composting house of organic materials as much as 5 tons/ day/ unit and in a years working for 300 days ).

Given that organic fertilisers have not been socialized properly to the farmers, then the potential for organic fertilisers manufacturing facilities that have available the above have not been able to produce the amount of organic fertiliser production line with available capacity. Production is estimated to account for less than 50% (Directorate Fertilizer and Pesticide, Directorate General Infrastructure and Facilities of Agriculture, the Ministry of Agriculture. January 2011 ).

Reference

Kembangkan Kapasitas Produksi Pupuk Organik. Sumatera Ekspress Senin, 19 Januari 2009

Pedoman Pelaksanaan Pengenmbangan Pupuk Organik Dan Pembenah Tanah Tahun Anggaran 2011. Direktorat Pupuk Dan Pestisida Direktorat Jenderal Prasarana Dan Sarana Pertanian. Kementerian Pertanian Tahun 2011.

Penyerapan pupuk organik rendah, podusen minta HTE diturunkan. Kontan, Kamis, 17 Februari 2011 | 17:12

180 perusahaan pupuk organik bangkrut. Batavia.co.id, dan Suara Pembaruan Senin, 21 Februari 2011Produsen Pupuk Organik Terancam Gulung Tikar, Antara news agency in MedanBisnia, Friday, 25March, 2011

Pemangkasan Subsid Pupuk Tidak Dilakukan Tahun ini. Neraca, 12 April 2011.

PGN to build second LNG terminal in Sunda Strait to cope with gas shortage. The Jakarta Post, Jakarta, Sat, 07/02/2011

www.pupuk-kujang.com.id

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