Indonesian govt to boost development of fertlizer industry

Indonesian govt to boost development of fertlizer industry

Photo document of subsidized fertilizers in East Java. (ANTARA/Eric Ireng)

Therefore, it is important to maintain the smoothness of distribution and stability of prices of fertilizers."
Jakarta (ANTARA News) - Indonesian farmers need some 14 million tons of subsidized fertilizers annually, whereas the governments allocation still accounts for only 9.55 million tons, leaving a shortage of 4.45 million tons.

Therefore, the government continues to encourage the development of the fertilizer industry, particularly as this commodity is a decisive factor in the governments efforts to achieve national food resilience.

Industry Minister Saleh Husin said that the governments efforts to boost the fertilizer industry to achieve national food resilience is in line with President Joko Widodos (Jokowi) idea of Nawacita, a Sanskrit term for nine national priority development programs.

According to the public relations manager of state-owned fertilizer company PT Petrokimia Gresik, Yusuf Wibisono, of the 9.55 million tons of government-allocated fertilizer, 4.1 million tons are urea fertilizer, 850 thousand tons are SP-36 fertilizer, 1.050 million tons are ZA fertilizer, 2.55 million tons are NPK fertilizer, and one million tons are organic fertilizer.

Husin added that national production capacity for urea fertilizer was now about 8 million tons, while the national need for this type of fertilizer was 9 million tons.

In the interest of fertilizer consumers in the country, the government continues to encourage fertilizer industries, including PT Petrokimia Gresik, to grow.

"This is important to realize economic resilience, for example, by advancing the development of domestic strategic economic sectors," the minister pointed out while observing PT Petrokimia Gresik in East Java on Friday (March 27).

Fertilizer is one of the products of the countrys priority industries in the agricultural sector, which contributes 20 percent to the agricultural products and 15 to 30 percent to the rice farming production costs, he noted.

"Therefore, it is important to maintain the smoothness of distribution and stability of prices of fertilizers. It should not be left entirely up to the market mechanism," the minister remarked.

The problems that the countrys fertilizer industries now face include the use of inefficient, old machines, which leads to a decline in production.

In addition, natural gas supplies to factories producing fertilizers are limited, while the demand for gas for fertilizer production continues to increase, particularly when production is declining.

The usage of inorganic fertilizers is also drastically on the rise as a result of farmers interest in the use of this type of fertilizer. After all, farming land acreage is also expanding, while the use of organic fertilizers is not very popular yet.

In the face of these conditions, the Ministry of Industry is moving expeditiously by taking a number steps, such as revitalizing fertilizer industries. It renovated four old and inefficient urea fertilizer factories and is building another new one.

Furthermore, the ministry will also implement a coal gas development program to replace natural gas with coal gas for fertilizer industries and build factories in the locations of natural gas sources.

He noted that the countrys policy on fertilizers in the agricultural sector was aimed at the utilization of compound and organic fertilizers, while single fertilizer would only be used as an additional nutrient for the soil and plants.

It is believed that with the rise in fertilizer production, farmers need would be met. More importantly, the distribution of the fertilizers would not be misappropriated.

PT Petrokimia Gresks Public Relations Manager Yusuf Wibisono said that his side hoped that the allocation of subsidized fertilizers would not be abused, although the government has set up a Fertilizer and Pesticide Supervisory Commission (KP3).

"We hope all sides will take part in the supervision of the fertilizer allocation to prevent the commodity from being misappropriated and from failure to reach their targeted recipients. Even though the KP3 has been formed, it would be better if people take part in the supervision as well," Wibisono remarked.

With the participation of the people, subsidized fertilizers such as urea fertilizer, which constitutes the largest allocation, could reach farmers effectively.

PT Petrokimia Gresik is tightening its supervision of subsidized fertilizers sent to distributors and retailers to prevent any deviation during the distribution process.

Moreover, Corporate Secretary of PT Petrokimia Gresik Wahjudi revealed that internal supervision was carried out in response to reports that many deviations had taken place during the distribution of subsidized fertilizers in various regions. The modus operandi was that the fertilizers were taken outside the distribution region to other areas for sale to non-intended recipients.

The other form of misappropriation involves subsidized fertilizers being sold at a price far below the governments sanctioned upper level price reference (HET), or being hoarded or diverted to non-subsidized fertilizers by replacing their original sacks.

"Misappropriation of fertilizers is an act against the law that can be taken to court," Wahjudi cautioned.



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(T.A014/INE)

EDITED BY INE

(T.A014/A/A014/A014) 31-03-2015 19:07:34

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