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Govt’s tobacco excise plan affecting farmers: Association
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Hazardous commodity – Workers roll cigarettes at a factory in Surabaya, East Java, on Monday. (thejakartapost.com/Wahyoe Boediwardhana)
T
he government’s plan to significantly increase tobacco excise has affected the price of tobacco at the farm level, a tobacco farmers’ association chairman has said.
Indonesian Tobacco Growers Association (APTI) chairman Soeseno said the planned tax increase, which would lead to a significant increase of cigarette prices from less than Rp 20,000 (US$1.51) per pack to around Rp 50,000, had been used by middlemen to spread fear among local tobacco growers, forcing them to sell their tobacco leaves at very low prices.
“They told tobacco growers that Indonesia’s tobacco industry can absorb only a small amount of their tobacco leaves this year because cigarette prices will be increased to Rp 50,000 per pack. This condition has affected our tobacco growers, especially in East Java,” Soeseno said on Monday.
In Pamekasan and Sumenep in Madura, Soeseno said, several farmers cultivating the Perancak 95 tobacco variety had complained that brokers had benefitted from circulating rumors about a significant cigarette price increase to push down tobacco prices among farmers.
“They told me that in Pamekasan, brokers bargain tobacco leaves down to only Rp 18,000 per kilogram and Rp 19,500 per kg in Sumenep. All this time, the price of Perancak 95 tobacco leaves has reached Rp 40,000 per kg. They were even sold at Rp 60,000 per kg in 2010,” said Soeseno.
Finance Minister Sri Mulyani Indrawati said earlier that the government had not yet issued rulings on retail cigarette prices or cigarette excise. Vice President Jusuf Kalla said the idea of increasing cigarette prices could potentially reduce the number of smokers and smoking-related health problems in Indonesia. (ebf)
