Sugarcane Farmers Write to 4 of Jokowi's Ministers, Reject Sugar Imports by State-Owned Enterprises

The letter was addressed to four ministers of the Working Cabinet, namely Coordinating Minister for Economic Affairs Darmin Nasution, Minister of Trade Thomas Lembong, Minister of Agriculture Andi Amran Sulaiman, and Minister of Industry Saleh Husin.

The letter was written on May 23, 2016. Here is the letter submitted by sugarcane farmers to the four ministers:

To: The Esteemed
1. Coordinating Minister for Economic Affairs of Indonesia
2. Minister of Trade of Indonesia
3. Minister of Agriculture of Indonesia
4. Minister of Industry of Indonesia

Respectfully,

In connection with the existence of a letter from the Minister of SOEs No.: S-288/MBU/05/2016 dated May 12, 2016, concerning permission for raw sugar imports in 2016 and the letter No.: S-289/MBU/05/2016 dated May 12, 2016, concerning raw sugar imports in 2016 that assigned PTPN X to import 381,000 tons of raw sugar, we convey the following:

That the 2016 sugar balance has not yet been determined so that it is not yet known if there is a sugar shortage in 2016. The estimation of real sugar production in 2016 has only been known around August 2016 at the peak of the milling season, so that it will be known whether or not there is sufficient sugar stock.That the basis for calculating the raw sugar import requirement of 381,000 tons is unclear, thus we are concerned that the 2016 sugar stock will exceed demand and the impact will be a drop in sugar prices, especially since at the beginning of 2016 there were PPI sugar imports of 200,000 tons. The policy on raw sugar imports under the pretext of it being compensation for PTPN and PT RNI to guarantee a minimum 8.5% yield is an instant policy and does not educate. The root of the problem of low yield is because the sugar factories are not efficient. This is proven by the fact that sugar factories that are efficient have yields that can exceed 8.5% so that what needs to be done is improving the performance of the sugar factories to be efficient. The basis of the policy on raw sugar imports for idle capacity should be that the amount of sugar production is lower than national consumption needs and the sugar factories lack raw materials. The problem that arises is that inefficient sugar factories will be abandoned by farmers so that in practice there is a shortage of sugarcane. It would be better to completely revitalize inefficient sugar factories rather than mill raw sugar. The profits from processing raw sugar for inefficient sugar factories will be used up to guarantee yield to farmers. Thus, it is impossible to use the profits from processing raw sugar to revitalize the sugar factories. In principle, we farmers strongly support the 8.5% yield guarantee as had been previously promised by the Minister of SOEs without the unnecessary compensation of raw sugar imports. Raw sugar imports have been carried out by both BUMN and private sugar factories but haven't had a positive effect on improving the performance of the sugar factories.That these matters are the result of a dialogue meeting of sugarcane farmers that are members of DPN APTRI that was held in Surabaya on May 20, 2016. Based on these matters, we the sugarcane farmers who are members of DPN APTRI reject the plan to import raw sugar as stated in the letter from the Minister of SOEs.

Thus, we have drawn up this letter of rejection of raw sugar imports so that it can be used for consideration and input for you, Mr. Minister in making policies and we hope that you, Mr. Minister can provide protection to us sugarcane farmers, and we express our gratitude. (dtf)