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Indonesian fertilizer shortage imperils food security

Source: Asia Time, online inter press service, 25 March 1999.
As the sun set on Blora, a peaceful town in Central Java, one day in December, groups of people with iron rods, blades and machetes walked slowly toward the heart of town. Soon, a cry was heard from someone in the group: "Go! Get them!" The mob abruptly began ransacking shops along the road.

At first, they only broke into shops selling fertilizers -- which have gone into short supply among farmers following this month's removal of government subsidies -- and seized them.

Failing to find enough fertilizer stocked there, the outraged mobs began destroying the shops. What happened next has become a main feature of Indonesia today -- an orgy of looting, arson, car burning coupled with bloody clashes with security forces. At least six people were heavily injured and dozens of shops and vehicles damaged on the night of December 7, in that quiet town some 30 km from Semarang, the capital of Central Java.

Also due to the scarcity of fertilizers, hundreds of farmers from Djati sub-district rioted the day after, damaging several kiosks and shops belonging to village cooperatives.

This violence is the price of the Indonesian Government's decision to remove long-time subsidies on fertilizers, following reforms carried under the International Monetary Fund's programme. The announcement of the end of subsidies had caused fertilizers to disappear from the market and their prices to soar, with effects that experts say bode poverty, food insecurity and more instability in the rural areas in the coming year.

Already, the lack of fertilizer due mainly to distribution problems is making some farmers give up on rice cultivation, with risky implications for food production in the world's fourth most populous country.

As it is, a recent Crop and Food Supply Assessment by the Food and Agriculture Organization of the United Nations (FAO) and the World Food Programme sees deteriorating food security starting the middle of 1999 due to failed harvests and production falls. Months earlier, food ministry officials already called the food situation "critical", saying 60 per cent of 7.3 million poor families in Central and East Java could have only one meal daily.

At the same time, unemployment continued to rise and could hit 12 per cent by yearend. Poor Indonesians now number 100 million or nearly half of the country's population. ?We should be prepared for the worst,? Mohammad Prakoso, FAO Programme Officer in Jakarta, said in an interview with Inter Press Service (IPS).

FAO forecasted the 1998 rice output at 45.3 million tons. Another 5.14 tons would be required to meet the demand of some 50 tons per year. "So, Indonesia will still need international assistance for its food security," Prakoso told IPS. Indonesia has had to import rice recently, despite the fact that it had achieved self-sufficiency in the staple, years ago.

The fertilizer subsidy was scrapped on 1 December 1998, marking the end of government control on the commodity. Jakarta also increased the basic price of unhusked rice by 40 to 50 per cent and stepped up credit allocation for rice to compensate for the subsidy's removal.

The end of government control on fertilizers means private businesses can now import on their own, and distribute the commodity to farmers. With an eye on better profits, some fertilizer traders have turned to hoarding and selling to overseas buyers instead. To many, the anger this has stoked among farmers is understandable. "It is a good planting season. Rainfall has been good. They have the money to buy fertilizer, while rice shortage is alarming. But they cannot find fertilizers," said Haji Abdul Mutolib, leader of Ciasem farmer group.

Latest official reports say some 50 per cent of available fertilizer supplies is not reaching the farmers. "Where did it go? Large part of the fertilizers go to the plantation sector, which is willing to purchase it at a much higher price. Another portion was sold overseas at very lucrative prices," said Agriculture Minister Soleh Solahuddin.

"The subsidy removal has caused price disparities in the market. And its logic is that distributors prefer to sell fertilizers to those who offer good prices," he added.

Fertilizer production is sufficient to meet local demand. Urea production during January-September 1998 stood at 4.5 tons, more than enough to meet local demand of 2.9 tons. An executive with PT Petrokimia Gresik, one of the country's largest fertilizer producers, says it exported its produce to Japan because "if we sell our products only to the local market, we would be unable to gain enough margin for financing our operation".

Distributors have more practical considerations -- good margins. "Local farmers buy our stuff at 60 dollars per ton. Our buyers in Malaysia purchase them at 120 dollars per ton. You ask me which buyer do I prefer?" said a distributor in Sumenep subdistrict of Madura, East Java.

If this skewed market situation continues, Indonesia may see worsening rice shortages in the next harvest season.

Matasim, a 33-year-old farmer in Sumenep, has left his 15-hectare paddy field unattended. "There is no use to do anything," he said. "Without fertilizers, there will be no harvest. Disease will easily attack our paddy plants." Thousands of Sumenep paddy farmers have followed Matasim's lead. In Subang regency, West Java, 35 paddy farmers who till some 51 hectares of paddy field decided to just let their paddy grow wild. In South Sulawesi, South Kalimantan and other provinces, farmers stopped working in rice fields for the same reason.

The uncertain food situation means more political turmoil and restiveness. "You cannot expect starving people to live orderly and respect norms and law," said Lt. Gen. Susilo Banbang Yudhoyono, the military's territorial chief of staff.

But most worrisome is the longer-time damage that the crisis, and problems such as food shortages, can do to Indonesia's young. The health department said that since the middle of 1998, 1.8 million of 20 million newborn babies suffer from serious malnutrition. "I can't stand to imagine seeing our future generation as dwarfs and idiots," said Azrul Anwar, director of the public health division of the health ministry.