Bank loans help shrimp farmers return to work

A thousand shrimp farmers at PT Aruna Wijaya Sakti (AWS) in Rawajitu, Lampung, returned to work after months of inactivity after the company received a loan by PT Bank Negara Indonesia (BNI).

The state-owned bank issued loans worth Rp 150 billion (US$16.59 million) to 1,051 farmers in the form of working capital to start production and investment loans to purchase production equipment and repair shrimp ponds.

Loans were also extended to shrimp farmers at PT Wachyuni Mandira (WM).

“We hope the loans will be able to increase production and improve the lives of the farmers,” Bumidipasena Abadi shrimp farmer management institution chairman Tugiono said Thursday.

He added that shrimp had become Lampung’s main non-oil and gas export commodity. However, the late distribution of broodstock meant farmers in the region had to stop production in November 2009.

The head of the Bandarlampung branch of BNI’s micro credit center, Jasmadi, said the loans were provided to help sustain Pacific white shrimp production at AWS and WM under the nucleus estate and smallholder scheme. He said both companies could yield high profits.

“Hopefully the cooperation will be smooth,” Jasmadi said.

Earlier, conflict between AWS and shrimp farmers hurt production. In September 2010, farmers staged a rally at the company’s residential complex that ended in a brawl and the torching of some company facilities. A farmer was arrested during the rally.

In the same month, farmers staged another rally in front of the Lampung provincial administration office, demanding a clear explanation of AWS’ shrimp pond revitalization program.

Farmers said that under the agreed cooperation contract, AWS would complete the revitalization between May 2008 and May 2009, but later asked for to push back the completion date to September 2009. The revitalization was only completed in September 2010.

AWS took over the shrimp production area from PT Dipasena Citra Darmaja (DCD), owned by tycoon Syamsul Nursalim, in July 2007. Delays to its promised revitalization program forced many farmers to stop production.

“Because of the stoppage, many of us have debts of between Rp 80 million and Rp 100 million each. Unless we can start producing now, the debts will grow bigger,” shrimp farmer Thowilun said.

He added that farmers had high hope for change when the control was later transferred to AWS’ holding company, PT Central Proteina Prima (CP Prima), which promised to revitalize 16 blocks of shrimp ponds in eight villages.

“It has only revitalized five blocks,” Thowilun said.

CP Prima said the company’s net income in 2009 dropped 16.37 percent from Rp 8.17 trillion to Rp 6.83 trillion, due in part to the drop in the international shrimp prices and the decrease in the export volume to a number of foreign markets, especially the US and Europe, as an impact of the global economic crisis.

Despite the drop, however, CP Prima was able to trim losses the same year by 47 percent from Rp 407.18 billion to Rp 217.17 billion in 2009.

Before the 1997 Asian financial crisis, the shrimp production area was the largest in Southeast Asia, but suffered a drastic collapsed due to the crisis.