A farm worker carrying sugarcane harvested to fulfill the needs of the sugar factory from land in Singorojo district, Kendal regency, Central Java, on Friday. Farmers demand the government’s commitment to protecting the sugar cane commodity by not importing refined sugar.
The chaos in Indonesia\'s sugar industry seems to have never subsided. Now, sugarcane farmers have unilaterally canceled the contract of sale for their sugar with State Logistics Agency (Bulog).
The reason for the cancellation was Bulog’s purchase price, which they considered far too low, as it was below production costs. Farmers finally decided to freely sell their sugar themselves to the market. By selling directly to traders, farmers can obtain cash capital for the next planting season – something which cannot be expected from Bulog, because of its limited absorption capacity and budget.
In several earlier statements, Bulog has tried to deny its absorption problem. The selling and buying agreement with the farmers was made to ensure the absorption of farmers\' sugar on the grounds that no buyer was willing to take their sugar for reasons of quality. However, the farmers complained about Bulog’s unpreparedness, which resulted in their sugar piling up at the factory. Bulog\'s refusal to absorb farmers\' sugar, which has been considered below the national standard, also sparked jealousy and conflicts among the farmers.
The latest situation only extends the sugar industry crisis, from very low productivity and yields to inefficient and outdated sugar factories, from the raw material shortage, supply and price fluctuations, supply chain disorder, and to the low welfare of farmers and sugar factory workers.
Ironically, Bulog’s inability to absorb the farmers\' sugar is frequently accompanied by refined sugar being leaked to household consumers, whereas it is intended only for industrial use. This has caused the price of farmers\' sugar to fall even further, so that the incentive for farmers to cultivate sugarcane is increasingly under pressure. In turn, this further worsens the raw material shortage and the overall crisis faced by sugar factories and the national sugar industry.
Farmers have held frequent protests on the sugar crisis. In a number of cases, they even barred access to sugar factories when the Trade Ministry impounded thousands of tons of the sugar they had produced, saying the sugar was unfit for consumption.
In responding to the instability of supplies and price, the government has tended to take the easy solution, namely imports. Even under the current condition, this allows the use of refined sugar and for sugar supplies to be maintained in the market.
All of this does not necessarily mean that the government should abandon its haphazard approach to reform the national sugar industry. Aside from their unclear direction, the policies issued thus far frequently do not touch the root of the national sugar problem.
Revitalization programs for centers of sugarcane cultivation and sugar factories have not changed the general portrait of the national sugar industry much. It is possible the government has lost its focus or is not serious. The government has to search immediately for a comprehensive solution on the sugar crisis, both short-term and long-term, and both in the upstream and downstream sectors. The crisis concerns not only the interests of the nearly 10 million workers involved in this sector, but also the public as consumers, the sugar industry as a whole, food security and the domestic economy.
