Responding to Fertilizer Turmoil
Fertilizer problems in several regions have not subsided.
Even though Agriculture Minister Regulation (Permentan) No.49/2020 on Allocation and Highest Retail Price of Subsidized Fertilizer in the Agricultural Sector for Fiscal Year 2021 was stipulated on Dec. 30, 2020, fertilizer problems in several regions have not subsided.
This is because, in addition to stipulating the allocation of subsidized fertilizer, which is far below expectations, this regulation also regulates the significant increases in retail prices for several types of fertilizer.
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The following is the data on the proposal on the needs for several types of fertilizer and the realization of the total allocations.
The proposal for urea fertilizer was 772,991 tons, its allocation was 767,411 tons (99.28 percent); the SP-36 proposal was 110,591 tons, the realization was 106,648 tons (96.43 percent); the proposal for ZA was 213,342 tons, the realization was 161,106 tons (75.52 percent); the NPK proposal was 1,223,232, the realization was only 428,355 tons, very far below the proposal (35.02 percent), and the proposal of organic fertilizer was 560,241 tons, the realization was 522,165 tons (93.20 percent).
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The fertilizer problem has not subsided because Permentan No. 49/2020 also regulates the increase in the highest retail price (HET) of several types of fertilizer. For urea fertilizer the highest retail price, which was originally Rp 1,800 per kilogram, increased to Rp 2,250 per kilogram; the highest retail price for SP-36 fertilizer increased from Rp 2,000 per kilogram to Rp 2,400 per kilogram; the highest retail price for ZA fertilizer increased from Rp 1,400 per kilogram to Rp 1,700 per kilogram. Then, the highest retail price for NPK fertilizer did not increase at Rp 2,300 per kilogram, while the highest retail price for organic fertilizer increased from Rp 500 per kilogram to Rp 800 per kilogram.
Productivity decrease
Issues surrounding subsidized fertilizer are expected to persist. Apart from these two reasons, namely the reduction in allocation and the increase in the highest retail price, the turmoil is also caused by changes in fertilizer recommendations and the obligation to use farmer cards in the redemption of subsidized fertilizer.
In 2020, the recommendation for rice fertilization accommodated in the 2020 e-RDKK consisted of 300 kilograms of urea per hectare; 50-100 kilograms of SP-36 per hectare; 50-100 kilograms of ZA per hectare; 50 kilograms of NPK per hectare, and 2,000 kilograms of organic fertilizer per hectare. However, in the 2021 e-RDKK, the recommendation for rice fertilization has changed, namely 175-275 kilograms of urea per hectare; 225-275 kilograms of NPK per hectare, and a maximum of 2,000 kilograms of organic fertilizer per hectare.
Even though scientifically the new fertilizer recommendation has been studied by experts at the Institute for Agricultural Research and Development, the turmoil occurs because rice farmers are not familiar with the fertilizer recommendation.
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Moreover, in its development, the new fertilizer recommendation was not supported by the allocation of NPK fertilizer as needed -- in Permentan No. 49/2020 only 35 percent of the need was realized. If it is not immediately anticipated, this condition can lead to a decrease in productivity and national rice production.
With regard to farmer cards, as of Sept. 1, 2020, there is a provision that requires the use of farmer cards in redeeming the subsidized fertilizer. This underlies the Decision of the Authority of Fertilizer Subsidy Budget Users No. 491/2020 on Billing for Redemption of Subsidized Fertilizer Using the Bank Dashboard for the 2020 Fiscal Year.
The regencies/cities have followed this provision in an effort to improve the management of the distribution of subsidized fertilizer until 2021. The use of farmer cards is intended to make the fertilizer subsidy budget more effective and efficient, through the distribution of fertilizer on target, thereby reducing leakage. Based on an audit by the Corruption Eradication Commission (KPK), the fertilizer subsidy budget for farmers has been leaking. To reduce these leaks, the KPK\'s Research and Development Division recommended improvement of the distribution mechanism. The farmer cards are an option to improve this distribution mechanism.
The farmer cards themselves are basically a debit card like an automated teller machine (ATM) card. Even though it has been introduced since 2017, farmers do not want the complications of using farmer cards in redeeming the subsidized fertilizer. They prefer to do redemption manually by paying directly at the fertilizer kiosks. This is still possible because Permentan No. 49/2020 and the previous Permentan (No. 1/2020) still allow manual redemption of the fertilizer.
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In practice, the farmer card application still faces many problems. The condition of the farmer card infrastructure is not fully supported. There are at least 10 problems, including expired farmer cards, closed farmer card savings, damaged cards, empty quota, lost cards, lost savings books, forgotten PINs, unreadable EDC (Electronic Data Capture) cards, blocked cards and cards that have not been activated.
Moreover, many farmers had just registered for farmer cards at the end of 2020 and so far the implementing banks have not been able to issue them. In fact, currently farmers are in need of fertilizer for their plants. This common problem is very annoying in the application of the farmer cards for redemption of the subsidized fertilizer, thereby causing a commotion in the field.
The current fertilizer turmoil is also more or less triggered by unpredictable weather factors during the preparation of e-RDKK in 2020. This year, our country is experiencing the La Nina climate phenomenon which causes rain to fall almost year-round throughout Indonesia.
This condition causes the 2020/2021 planting season schedule to begin earlier in several rice crop center areas. The farmers, who usually plant in January or February, because of the abundance of water, advanced the planting time to November or December. As a result, the need for fertilizer could not be accessed because it is included in the 2021 budget year.
Cash transfer
The fertilizer subsidy policy for the agricultural sector has long been a dilemma for the government. On the one hand, the government hopes that food production will be maintained at a high level and farmers will be helped by the provision of the subsidized fertilizer. However, on the other hand, the very large nominal fertilizer subsidy budget is very burdensome to the State Budget (APBN). Every year, the APBN must provide an average of around Rp 31 trillion for this fertilizer subsidy budget.
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We acknowledge that the dependence of farmers on chemical fertilizer is one of the negative impacts of the success of the green revolution. The miracle of urea fertilizer that Haber Bosh introduced has been able to increase food production many times in a short time. Many countries, including Indonesia, then provide massive fertilizer subsidy budgets to increase food production. As a result, chemical fertilizer is very easy to access by farmers at low prices. Because of being easily accessible and relatively cheap, farmers tend to be wasteful in the application of the chemical fertilizer. This situation has taken place for a long time, thereby giving birth to a condition of dependence. Their further implications are the fact that researches onAlso read: Helping Food Producersare almost untouched, even forgotten.
Like it or not, the government must address all these problems. Several years ago, the government had discussed the possibility of giving fertilizer subsidies directly to farmers (by name by address).
This idea is very good because farmers will get fertilizer subsidies in the form of cash transfers into their farm cards. Then, farmers are free to buy fertilizer wherever they want based on the market mechanism. There will be no more dichotomy of subsidized and non-subsidized fertilizer, which always creates a commotion.
In order to break the dependence of farmers on chemical fertilizer, the government must aggressively campaign for the use of organic fertilizer in a sustainable way. The appropriate technology for making organic fertilizer is actually easily accessible to farmers. The basic ingredients for making organic fertilizer are also widely available around farmers.
To make fertilization more efficient, various cultivation technology inputs can be innovated to farmers, such as the system of rice intensification (SRI) cultivation technology. The use of soil test kits that are easy to operate by farmers in rice fields also greatly helps reduce fertilizer use. By using this device, farmers can read the level of soil fertility in just minutes. By using this way, the application of fertilizer can be carried out according to the needs of the plant so that it is more efficient.
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Indeed, it is time for the government to increase the highest retail price for subsidized fertilizer, which has not been increased for years. The more expensive price of chemical fertilizer will make farmers think a thousand times about being wasteful in using fertilizer.
We do not just hope that they can quickly get out of their dependence on chemical fertilizer that is not environmentally friendly. More than that, we also want to enlighten farmers so that they can be realistic in their practices.
Toto Subandriyo, Observer of Social-Economic Issues, Graduate of IPB and Postgraduate at Jenderal Soedirman University.
This article was translated by Hyginus Hardoyo.