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Farmers caught in the toils of economic conspiracy

Green gold: A woman clears growth at her tobacco farm in Temanggung, Central Java

Pandaya (The Jakarta Post)
Tue, June 14, 2016

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Farmers caught in the toils of economic conspiracy

Green gold: A woman clears growth at her tobacco farm in Temanggung, Central Java.(JP/Pandaya)

“Just tobacco. Nothing else matters”, reads a lighthearted message scribbled on a terrace wall welcoming guests to a hilltop house in Legoksari village, a 20-minute drive from the cool town.

On a recent morning there, a smiling woman greeted me like a long-lost friend. She served fragrant sweet tea and steamy boiled groundnuts from the family’s farm.

About 1,700 people live in this crowded neighborhood on a steep slope of the dormant volcano Mt. Sumbing. Although there is plenty of vacant land, houses of various designs and sizes have been built very close to each other, probably to display the harmony between residents.

After 30 minutes of waiting, my host Subakir arrived on his scooter. As he got off, he took the last puffs on his cigarette and threw away the butt. “How’s the tea?” the senior leader of the local chapter of the Indonesian Tobacco Farmers Association (APTI) said to break the ice.

After a few cigarettes and a cup of black coffee, the chain smoker began to sparkle.

He casually recited important statistics: of the 20 districts in Temanggung, only 14 are suitable for tobacco farming; 11,000 hectares of land are planted with tobacco, yielding some 7,000 tons a year. Top cigarette makers Djarum and Gudang Garam will buy 7,000 and 10,000 tons of tobacco, respectively, from Temanggung this year, and most households in Legoksari own between half and 1 ha of farmland.

As an APTI official, Subakir is an ardent proponent of tobacco because the industry brings prosperity to Temanggung. He resents the growing trend of smoking restrictions and aggressive anti-tobacco campaigns.

“Exhaust fumes are a lot more dangerous. Why don’t people fret about that?” the mustachioed man growled, chuckling.

For a great many years, Temanggung has been famous for top-quality tobacco with the highest nicotine content of up to 8 percent. If blended with tobacco from other areas, it functions as an aromatic. Temanggung is synonymous with tobacco.

Legoksari, which has 385 ha of farms, is considered a success story. The narrow and winding asphalt roads are lined with big houses with flashy Japanese-made cars in their garages, grand mosques and impressive school buildings. Pathways on the mountain slopes, the ideal height for tobacco and vegetables, are often jammed with farmers’ trucks and motorcycles.

The village’s communal funds come from tobacco. The village administration requires each family to donate 2.5 percent of their annual net tobacco income to the village coffers. The accumulated funds always surpass the development funds from the state, which is set at Rp 70 million (US$5,244) a year.

Farmers in Legoksari and elsewhere in Temanggung are famous as big spenders after the tobacco harvest season. The wealthy usually stock up on basic commodities to last them until the next season, buy cars and motorbikes as well as pay their children’s annual school fees — all in anticipation of bad weather wreaking havoc on their tobacco plants the next season.

If and when the worst scenario does happen, farmers do not have to worry much because the regency government will pay their taxes and electricity bills with cash taken from the regency’s share of tobacco trust funds from the central government. Last year, Temanggung’s share reached Rp 29.5 billion, according to official local statistics.

Every season between March and September, the village is a magnet for job seekers.

Temanggung has become Central Java’s main tobacco marketplace, contributing 26 percent to the nationwide produce. Of the around 21,000 tons of tobacco traded on the local market every year, the regency contributes only 7 tons and the rest comes from neighboring regencies, such as Magelang, Wonosobo and Pekalongan. Here, tobaccos from various regencies are blended and the Temanggung portion functions as the taste enhancer.

 But this “success story” is not all a bed of roses.

The tobacco trading system in Temanggung is controlled by a so-called “mafia” — the term widely used to refer to the cartel-like trading system involving tobacco shredders, traders, middlemen, buyers, graders and cigarette producers. The farmers’ bargaining position is the weakest because they cannot sell their produce directly to cigarette makers.

It is the mafia that dictates prices, does the weighing and determines the quality grades. In its recent survey report, the Muhammadiyah Tobacco Control Center (MTCC) says that farmers are powerless and there is no way they can escape the mafia’s control.

Loan sharks employ classic tactics to control farmers, such as providing cash as starting capital that farmers badly need to buy things from fertilizer and seedlings to pesticides. Some cash-strapped farmers have no choice but to ask for cash upfront from loan sharks.

MTCC researcher Fauzi Ahmad Noor says the mafia often resorts to intimidation. He recalls a day in 2012 when a farmer, Ismanto, he picked to testify against a judicial review of a 2009 health law, which declares tobacco to be an addictive substance, reversed his stand after being allegedly threatened by the mafia. “It was embarrassing,” Fauzi says.

Fortunately, the Constitutional Court rejected the motion filed by Achmad, the owner of Aneka Jaya cigarette maker, and two tobacco farmers from Kendal, Central Java.

In an interview Fauzi uploaded to YouTube, another farmer, Maryanto, says tengkulak (middlemen) charge 10 percent of tobacco farmers’ proceeds. He alleges that middlemen also rig the weighing.

“Their scales aren’t right […] We have repeatedly asked the government to recalibrate their scales but nobody listens.”

Cigarette makers buying Temanggung tobacco — Gudang Garam, Djarum, Wismilak and Nojorono — all have different quality standards and pricing policies. Each of them assigns five to 10 graders who have good connections with the middlemen, MTCC found.

Farmers are in a weak bargaining position: The few buyers are not subject to the law of supply and demand because they import most of their tobacco.

“The more brokers are involved in trading, the more money farmers have to spend on tips, transport fees and loading charges,” the MTCC report says.

The local government’s role is confined to that of a facilitator who provides information on how much tobacco cigarette makers need as well as calling on cigarette producers to buy tobacco at reasonable prices.

Neither the government nor associations like Subakir’s APTI fight for reform of the trading system so that it allows farmers to have direct access to cigarette makers. Farmers would be better off without the “mafia”. They should have the freedom to grow crops of their preference.
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“Soccer has given me everything in life, tobacco almost took it all away.”

Johan Cruyff

the great Dutch soccer player, who started smoking at the age of 23 and died of lung cancer at 68.

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