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Jakarta Post

More imports loom as tobacco production slides

Daily maintenance: A farmer removes buds from a tobacco plant in Sukowono village, Jember, East Java

Wahyoe Boediwardhana (The Jakarta Post)
Jember, East Java
Mon, August 8, 2016

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More imports loom as tobacco production slides

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Daily maintenance: A farmer removes buds from a tobacco plant in Sukowono village, Jember, East Java. Farmers in the regency have expressed concerns that the La Nina weather phenomenon, which has caused a wet summer for the country, could shrink local plantation areas for kastuari tobacco by 40 percent, to around 8,400 hectares, until the end of the year. (JP/Wahyoe Boediwardhana)

Indonesia’s cigarette makers may need to surrender to more imports next year as tobacco crops countrywide suffer amid the effects of La Nina, which has spurred a wet summer this year.

The Indonesian Tobacco Society Alliance (AMTI) estimates that tobacco plantation areas have shrunk by 30 percent in the world’s fifth biggest tobacco producing country.

“Replanting has been done in around 25 percent of tobacco plantations throughout the country. Such an effort was not enough as the country is still short of tobacco supplies, a situation that will force cigarette makers to import more tobacco for their businesses,” said AMTI spokesperson Hananto Wibisono.

 The current supply would only be sufficient to serve cigarette factories for this year, he added.

Cigarette producers need around 363,000 tons of tobacco to keep their businesses moving. The production in 2015 was only around 164,000 tons of tobacco, which was dominantly provided by plantations in East Java.

 East Java plantations produce up to 74,241 tons of tobacco per year, followed by plantations in West Nusa Tenggara with 39,771 tons per year and Central Java with 31,715 tons per year.

 The La Nina weather phenomenon, which has caused a wet summer for the country, could shrink the plantation areas for kastuari tobacco in Jember, East Java, by 40 percent to around 8,400 hectares until the end of the year. Kastuari tobacco is used as a taste enhancer for kretek (clove cigarettes).

The shrinking crop area in Jember has led to tobacco growers in the region only producing around 1.6 tons per ha, said Eko Hariyanto, the manager of tobacco buyer PT Sadhana Arifnusa, which supplies HM Sampoerna, owned by the world’s largest tobacco company Philip Morris.

 Apart from La Nina, farmers’ lack of knowledge in terms of making the most of planting methods and fertilizers, as well as their lack of access to the market, have contributed to the low productivity.

 Indonesian tobacco farmers’ productivity averaged between 0.7 tons and 0.8 tons of tobacco per ha, lower than the ASEAN average figure at around 1 ton per ha. Meanwhile, the need for tobacco in cigarette production has increased by 23.78 percent in the last five years, according to Center for Indonesian Taxation Analysis (CITA) data.

Sampoerna’s head of regulatory affairs, international trade and communications, Elvira Yuanita, said the company would wait until September to determine whether or not it would increase the amount of imported tobacco.

Elvira said Sampoerna was trying to leverage existing partnerships with local tobacco growers so that the firm could obtain a sustainable supply for its cigarette-making business. Since 2009, Sampoerna has forged partnerships with 27,000 tobacco farmers who have 22,700 ha of land.

“We prefer to use local tobacco than imported, which is costlier in terms of production costs. We only use imported tobacco for producing the SPM [machine-made white cigarettes], which is our export commodity,” Elvira said.

She added that industry players needed to team up with local tobacco growers, so that the latter’s planting activities could be more definitive.

Cigarettes are widely consumed in Indonesia, where 67.4 percent of males over 15 years old smoke, making the product a top contributor to state revenue through excise payments and labor-intensive industry.

However, earlier this year, tobacco farms across the country were highlighted by Human Rights Watch (HRW) in a report titled “The Harvest is in My Blood: Hazardous Child Labor in Tobacco Farming in Indonesia”.

 The report, which included interviews of 132 children aged 8 to 17 in major tobacco producing regions in Indonesia, said child labor could have brain-damaging and illness-causing effects due to nicotine poisoning and toxic pesticides, as well as dangerous physical work.

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