Import Measures Bring Grief to Farmers

KOMPAS/ABDULLAH FIKRI ASHRI

Sindanglaut Sugar Factory Gate, Cirebon Regency, West Java, Friday (10/5/2019). The sugarcane milling period will begin next June 20. However, farmers are worried because the mill will move to another factory, thus increasing the transportation cost.

Import policy for sugar, rice and salt dealt blow to farmers with them desperately grappling for survival.

On Friday morning (9/4/2021), the PG Sindanglaut sugar refinery in Cirebon, West Java, looked deserted. Unusually there were no trucks coming and going. A few people walked out of the refinery plant and greeted Mamat (59). He was standing in front, his mind going back to the past when the sugar industry enjoyed a heyday.

The situation is gloomy now. “Almost all the workers here know me. We used to work together at PG Karangsuwung,” he said.

He was referring to the sugar plant where he began his long sugar-related services as a foreman at the plant’s sugarcane plantation back in 1996.

Also read: Farmers Worried About the Impact of Imported Sugar

His daily pay was Rp 5,600, which at that time could afford over 5 kilograms of rice. Attending to tens of hectares of sugarcane plantation, he had to ensure the sugarcane trees grew well.

The refinery performed quite well with the yield reaching 10 percent. Unfortunately, that was not enough to prevent the closure of the factory, which came in 2015 because of the difficult procurement of raw materials and aging milling machines. The century-old plant has since been abandoned and is frequently used as TV shooting spot.

Mamat, whose last daily pay was 75,000, moved to PG Sindanglaut, about four kilometers from Karangsuwung. But that didn’t last long as the company’s efficiency measures forced him out in 2017. It turned out that even his 21 years of work experience in the sugar industry could not spare him.

Three years later, the factory with a capacity of 1,900 TCD (tons of cane per day) also closed. Another refinery failing to survive was PG Subang.

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Prior to 1995, there were eight sugar refineries in West Java but now only PG Tersana Baru and PG Jatitujuh in Majalengka are still milling sugarcane.

Disinclined to detach himself from sugar affairs, Mamat has decided to try his luck by growing sugarcane himself. His hard work has been rewarded with his three children affording the high school education.

"The second child has now got himself in growing sugarcane," said the elementary school graduate.

KOMPAS/ABDULLAH FIKRI ASHRI

Mae Azhar, a sugar cane farmer, peels off his dry leaves in Beringin Village, Pangenan District, Cirebon Regency, West Java, Thursday (8/4/2021). Farmers complained about the rising cost of planting sugar cane because they had to buy non-subsidized fertilizers and the increase in workers\' wages.

The two-hectare land he is renting at Rp 15 million can produce 1,000 quintals of sugarcane per hectare. However, he has begun to become doubtful about sugarcane feasibility due to the soaring production costs.

From the available fertilizers ZA and NPK Phonska, only the former is subsidized fertilizer. The pay for farm workers has also increased from Rp 35,000 to Rp 45,000 for female workers, and from Rp 60,000 to Rp 70,000 for male. He also has to pay interest of the bank loan for the Rp 10.5 million per hectare he borrowed.

"In fact, harvesting of ripe sugarcane needs additional cost of Rp 7 million. Planting included, the cost becomes Rp 17.5 million,” he said.

He calculated further by including cutting process, transporting, fertilizers and land rental, which put the minimum operational cost at Rp 52 million per hectare, excluding the bank interest payment.

Assuming 8 percent of yield, 66 percent for labor pay and sugar price at Rp 11,000 per kg, Mamat gets gross revenue of around Rp 58 million per hectare.

During the last 12 months of work, he has received a profit of Rp 6 million or Rp 500,000 per month, which is far below Cirebon\'s regional minimum monthly wage of around Rp 2.26 million.

Also read: Building the Sweetener Industry

He is wary of the prospect of imported sugar putting pressure on the price.

The farmers’ hope for Rp 12,500 per kg might only be a dream. "If the imports circulate, the farmers will be hopeless," Mamat said.

Continued decline

The government has issued import permits for an estimated 680,000 tons of raw sugar and 150,000 tons of white crystal sugar or consumption sugar. The policy has been taken to meet consumption needs and to anticipate price hikes ahead Idul Fitr. (Kompas, 16/3/2021).

The Industry Ministerial Regulation number 3/2021 aims to ensure the availability of raw materials for the sugar industry in order to meet national sugar needs, which according to fellow farmer Mae Azhar (38) will affect local farmers.

I am sure the price of sugar will definitely fall because of sugar imports.

Many young farmers, he said, have started planting sugarcane. The sugarcane plantation at PG Tersana Baru has expanded from 4,100 hectares to 4,500.

"Hopefully, the farmers are not discouraged by sugar imports. I am sure the price of sugar will definitely fall because of sugar imports,” he said.

KOMPAS/ABDULLAH FIKRI ASHRI

Workers repair parts of the milling machine at the Tersana Baru Sugar Factory (PG)  in Cirebon Regency, West Java, Friday (14/2/2020). The factory with a capacity of milling 3,000 tons of sugarcane per day is the only sugar factory owned by PT Rajawali II, the PT RNI group, which is still operating this year. PG Sindanglaut in Cirebon is closed due to a shortage of raw materials and old machines.

In the face of threats of falling prices in sugar, some farmers have looked elsewhere as side income sources , for example, by planting rice, as Mamat does. He cultivates a half hectare, which recently gave him two tons of dry unhusked rice. "Usually two and half to three tons of crops can be reaped. Because of pests, the yield decreased,” he said.

The unhusked rice is priced only at Rp 3,800 per kg, which has exacerbated the condition because it is below the government buying price of Rp 4,200.

Mamat suffered losses. With 2 tons of yield, he received Rp. 7.6 million, which was Rp 3.4 million short of the capital.

The government initially planned to import one million tons of rice before suspending it due to polemic.

President Joko Widodo promised there would be no imports, at least until June 2021, and guaranteed that the farmers\' crops would be absorbed. In fact, Mamat\'s unhusked rice was still underpaid.

Meanwhile, about nine kilometers from a sugarcane plantation, salt farmers in Rawaurip Village, Pangenan District, are also suffering from over stockpiles of crop. Sacks of salt are piled up by the ponds, inside the warehouses and on the roadside, covered by used banners to protect it from the rain.

"In the warehouse there are 40 tons of salt from 2018 harvest season," Ismail (34) said.

Also read: Sugar Self-Sufficiency Road map Needs Clarification

The crop was once solicited at Rp 250 per kg, which was far short of the production cost. He blamed the falling price on the circulation of flooding salt, for which the import quota increased from 2.9 tons last year to 3.07 million tons this year.

In 2017, the import quota was only 226,000 tons and markets still managed to absorb local salt even at Rp 3,000 per kg, or a jump from Rp 500 per kg.

Low quality of farmers\' salt is always an excuse for imports. "The government should help improve the quality of farmers\' salt, instead of increasing import," he said.

Cirebon used to be an exporter of rice, sugar and other foodstuffs as Soegijanto Padmo says in Cirebon, from a Traditional City to a Colonial City (Zaenal Masduqi, 2011). In 1823-1830, Chinese shios would come and go with loads of commodities to several countries.

Farmers, who are the main backbone of domestic crop production, are being marginalized. They are struggling to survive.

This article was translated by Musthofid.