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Pepper farmers discouraged by small profits
Once the worldâs largest pepper producer, Indonesia has seen a steep decline in pepper output in recent years due to the fading interest of farmers in the commodity, as well as shrinking farmland
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nce the world's largest pepper producer, Indonesia has seen a steep decline in pepper output in recent years due to the fading interest of farmers in the commodity, as well as shrinking farmland.
Deputy Trade Minister Bayu Krisnamurthi said the number of pepper farmers in the country had decreased due to declining profits, which eventually affected overall pepper production.
Bayu said farmers had low profits because they had to bear the burden of logistical and processing costs. Roughly, farmers earned less than 20 percent of the selling price.
'For example, white pepper is sold for Rp 150,000 [US$12.97] per kilogram, but farmers only receive about Rp 20,000 to Rp 30,000 for every kg of pepper they produce,' Bayu told reporters during a seminar in Jakarta on Wednesday.
The deputy minister said that due to low profits, many of the country's pepper farmers had shifted to more beneficial commodities like rubber and palm oil.
According to data provided by the International Pepper Community (IPC), Indonesia produced 80,000 metric tons (mt) of pepper in 2003. By 2013, Indonesia only produced about 59,000 mt.
Moreover, the land area used for pepper farming had shrunk from 122,618 hectares (ha) in 2003 to 112,856 ha in 2012.
'Twenty years ago we were the number one pepper producer and exporter in the world. Now we are second after Vietnam as many farmers have decided on a change of pace,' Bayu added.
IPC data shows that from 2003 to 2012, pepper production in Vietnam grew from 93,500 mt to 120,000 mt. Land used for pepper farming also increased from 48,800 ha in 2003 to 50,000 ha in 2012.
Bayu added that global demand for pepper would grow about 5 to 7 percent every year, yet Indonesia's pepper production was in a 10-year decline.
To encourage more farmers to produce pepper, Bayu said the government would help. 'Global demand for pepper will keep growing and we have to keep up, so we will encourage farmers by giving incentives and providing transport for their products,' Bayu said.
Moreover, he said the Trade Ministry was preparing a pepper tourist park in Lampung, South Sumatra, which would also increase profit for pepper farmers and could encourage more farmers to grow pepper.
According to minstry data, from the country's total pepper production of 59,000 mt in 2013, about 41,500 mt was exported to Asia, Europe and the US, generating $354 million for the country. Meanwhile, about 16,600 mt was for domestic consumption. (dwa)
