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Govt to replace fertilizer subsidy with cash transfers to farmers
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A farmer spreads fertilizer in Tegal Besar, Kaliwates, Jember, East Java, on May 28, 2020. The government is looking to replace the current fertilizer subsidy system, where suppliers receive payments to sell fertilizer below market price, with direct cash assistance for farmers. (Antara/Seno)
T
he government plans to replace subsidized fertilizer with direct cash assistance for farmers with the full implementation expected to begin nationwide starting in 2026.
The National Development Planning Agency said the government would begin a pilot project next year, hoping to identify weak points before implementing the policy at full scale.
“Next year we will begin the piloting stage so we can find out what needed to be fixed in the mechanism,” the agency’s undersecretary for maritime affairs and natural resources Vivi Yulaswati said on Wednesday, as quoted from Kumparan.
Currently, the subsidy is channeled to producers so they can sell fertilizer to farmers at lower than market price.
The government requires farmers to register themselves through an online database or by owning a smallholder card to ensure the disbursement meets the intended beneficiaries.
However, oftentimes subsidized fertilizer was hard to find, partly due to incorrect allocation data and distribution issues, including suspected fraud, forcing farmers to rely on non-subsidized products that cost them more.
Read also: Subsidized fertilizer won't fix Indonesia's agriculture: Experts
