- A yet-to-be published government report describes corrupt practices among state-backed retailers entrusted with selling subsidized fertilizers to small farmers.
- The retailers are also said to be colluding to sell the fertilizers at higher prices.
- The allegations were reported by Reuters, which claims to have seen parts of the government’s report.
Indonesian government investigators have uncovered widespread profiteering by state-backed retailers, who are selling millions of dollars worth of subsidized fertilizers meant for small farmers to big plantations.
Nearly a third of subsidized fertilizers were misallocated in some parts of the country last year, according to a yet-to-be-published government report seen by Reuters, the news agency reports.
It was not clear which arm of government conducted the report, but two officials at the agriculture ministry told Reuters they had not heard of any problems in distribution this year.
“If it happens, please report it as soon as possible and if possible please report where it happened and when,” said Hasil Sembiring, the ministry’s director general of food crops. Suwandi, the ministry’s head of the information and data, said, “In 2015, there were 40 cases processed by law enforcement. It is better now. Before farmers were complaining about fertilizer scarcity, now not as much.”
The revelations come at a time when small farmers are struggling across the archipelago, with the prices of commodities like palm oil and rubber in free fall. Many farmers in Sumatra and Kalimantan also saw their crops incinerated during last year’s fire and haze crisis.
A shortage of cheap fertilizers has presented another obstacle — one allegedly aggravated by the state-backed retailers’ practices.
“We are only getting about half of our subsidized fertilizer,” farmer Setyarman told Reuters at his home in Central Java province.
“Distributors and retailers hold on to their stock and when there is a scarcity they sell it at higher prices that most small farmers can’t afford.”
Randy Fabi and Bernadette Christina Munthe. “Subsidy sham: Fertilizers reach Indonesia plantations, not small farmers.” Reuters. 15 February 2016.