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No sweet success for Indonesian govt sugar programme
Publication Date : 16-10-2013
One year away from its deadline, the government’s sugar self-sufficiency programme is likely to collapse due to a surfeit of imported refined sugar, lackluster domestic production and low sugarcane yields.
Indonesian Sugarcane Farmers Association (APTRI) chairman Arum Sabil said refined sugar imports, which are exclusively allocated to food and beverage producers, had already far surpassed that sector’s estimated consumption of 1.4 million tonnes for this year.
“The government has so far allowed the importation of 3.4 million tonnes of refined sugar and that is killing local sugarcane farmers,” Arum told reporters over the weekend.
Herman Khaerun, a deputy chairman of the House of Representatives’ Commission IV overseeing agriculture, said the large import quantity could create a big gap between supply and demand that would distort sugar prices for household consumption and lead to more refined sugar finding its way into traditional markets.
“Because of this, facilities producing sugar for household consumption from local sugarcane won’t be able to compete with imported refined sugar circulating in traditional markets,” said Herman during a meeting with related ministries.
“It might also cause demand for domestic sugarcane to flop and threaten the self-sufficiency programme.”
In 2004, the erstwhile trade and industry ministry issued a regulation that restricted refined sugar use only to the processing industry, leaving households only able to purchase raw sugar.
Trade Ministry director general for domestic trade Srie Agustina said that her ministry had reprimanded refined sugar distributors.
She added that the ministry was currently auditing importers over possible leakages of refined sugar into traditional markets. The audit is expected to conclude by the end of this month.
“Those [importers] who are proven to have sold refined sugar [to traditional markets] will have their import quotas slashed,” Srie said.
In 2010, the government introduced a self-sufficiency programme in a bid to fulfill the country’s annual sugar demand 2.96 million tonnes of raw sugar and 2.74 million tonnes of refined sugar from domestic sources.
The government said it had implemented a number of strategies to reach the target, including adding 350,000 hectares of sugarcane plantations, revitalising aging facilities and increasing sugarcane yield.
Sugarcane production, however, has been lagging.
Agriculture Ministry director general for plantations Gamal Nasir estimated that only 2.5 million tonnes of sugar had been produced so far this year, off pace to meet this year’s projected consumption of 5.7 million tonnes.
The government had earlier revised this year’s sugar production target, down a startling 42 per cent from 4.9 million tonnes to 2.82 million tonnes.
It also had slashed the 2014 production target by more than 45 per cent to 3.1 million tonnes.
Gamal said several programs that were counted on to substantially increase production including adding plantations and revitalising old facilities were not running as planned.
The ministry’s data shows that only around 9,000 hectares of new sugarcane plantations had been acquired between 2010 and 2013.
“Less than 10 per cent of existing sugar facilities have been renovated and no new facilities have been built,” Gamal admitted, blaming the snail-paced progress of the programme on lack of loans allocated for sugar makers with aging facilities and a failure to synchronise programmes with other related institutions.