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Jakarta Post

Ministry allocates $8.2b to purchase rubber, resin from farmers

  • Mardika Parama

    The Jakarta Post

Jakarta   /   Wed, May 6, 2020   /   08:15 am
Ministry allocates $8.2b to purchase rubber, resin from farmers A farmer collects natural rubber from a plantation in Batam in this undated file photo. (Antara/Aditiya Pradana Putra)

The Public Works and Housing Ministry (PUPR) has allocated Rp 125 billion (US$8.2 million) to purchase 10,000 tons of rubber and 800 tons of resin directly from farmers’ plantations as the COVID-19 pandemic drives down demand for the commodities and prices fall.

The ministry has set aside Rp 100 billion to purchase the rubber, which will be used for asphalt mix for national road construction projects, PUPR Minister Basuki Hadimuljono said on Monday.

“Each regional division of the ministry’s National Road Agency will purchase the rubber directly from farmers who are associated with the Rubber Products Processing and Marketing Unit [UPPB],” he said as quoted in a press statement.

Prices for various commodities, including natural rubber, have plunged over the last several months as a result of weak global demand as the COVID-19 pandemic drags on.

The Indonesian Rubber Producers Association (Gapkindo) rubber price fell by 26.7 percent annually in April to an average of $1.11 per kilogram, according to ASEAN Rubber Business Council (ARBC) data.

In addition to rubber, the ministry has also allocated Rp 25 billion to purchase 800 tons of natural resin from state-owned forestry company PT Perhutani, the resin will be used in road-marking paint mixtures.

The direct purchases are also a part of the ministry’s effort to boost its cash labor intensive program (PKT) to help strengthen people’s purchasing power in rural areas.

The ministry has reallocated Rp 36.19 trillion of its Rp 120 trillion budget this year to help cushion the impact of the pandemic on the country. The largest portion of the reallocated budget, Rp 24.53 trillion, will go toward direct aid or activities directly linked with COVID-19 mitigation efforts.

Meanwhile, a total of Rp 11.21 trillion of the reallocated funds will be allocated to the PKT program, which aims to employ 17,157 workers in rural areas.