Nations, such as the United States, and European countries, have implemented output subsidy instead of input subsidyJakarta (ANTARA) - A member of the House of Representatives' (DPR RI's) Commission IV, Andi Akmal Pasluddin, has called on the government to divert the government's fund allocation from the current fertilizer subsidy for farmers to price subsidy .
"The fertilizer subsidy was initiated by the New Order regime under President Soeharto and aims for food self-sufficiency. His regime achieved self-sufficiency in 1984, and for several years, our country was free from the need to import foods," Pasluddin stated here, Tuesday.
The presidents that succeeded Soeharto had yet to again attain self-sufficiency despite continuing the fertilizer subsidy, according to the legislator.
Hence, he urged the government to contemplate on replacing the input subsidy currently implemented by fertilizer subsidy with subsidy on its output price to prevent loss to farmers in case of a decline in the prices of farm commodities.
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"Nations, such as the United States, and European countries, have implemented output subsidy instead of input subsidy," he noted.
The lawmaker stated that the proposed price subsidy could be first tested in one district to review the possibility of further implementation. He also reminded the government to seek opinions of experts.
"If the experiment is successful, then the farming product quality will increase and likelihood for misappropriation will reduce through effective distribution. Thus, the new system could be considered as an alternative to replace the fertilizer subsidy often overwhelming the ministry's budget," Pasluddin explained.
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Earlier, state-owned fertilizer holding company PT Pupuk Indonesia CEO Bakir Pasaman ensured that the current stocks of subsidised fertilizer are copious, surpassing 300 percent above the government’s requirements.
During a parliamentary hearing meeting with the DPR RI's Commission IV working committee for subsidised fertilizer and farmers' card on June 14, he stated that his company had produced 911,458 tons of fertilizer as of June 10, 2021, a surplus of 304 percent above the government’s requirements.
"Pupuk Indonesia’s current available stocks reach 15.3 million tons, while the year-to-date production touches 13.4 million tons, and our surplus from 2020 reaches 1.9 million tons," the CEO revealed.
Pasaman confirmed that some 15 million tons of fertilizer were guaranteed by the company for distribution for the year 2021. He also noted that the distribution of subsidised fertilizer until the end of May 2021 had reached 76 percent, or around 3,090 million tons of the intended target of 4,082 million tons.
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Translator: M Razi R, Nabil Ihsan
Editor: Fardah Assegaf
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