Tobacco Growers Profit Dropped, Low Tobacco Prices
Tobacco growers in Lombok, West Nusa Tenggara (NTB), declared that low demand and a dropping sales price for Virginia-variety Al Fakher tobacco are threatening their livelihoods. The farmers, who are expecting big losses for this year’s harvest, are asking the provincial administration to intervene in the tobacco market. This year’s harvest has brought little but trouble to Lombok’s independent tobacco farmers. The sale price of Virginia tobacco recently ranges between Rp 3,000 (US 31 cents) and Rp 5,000 per kilogram, decreased dramatically from between Rp 30,000 (US$3.30) and Rp 35,000 a kilogram in 2011.
“Last year, we could sell of tobacco for Rp 3 million per kilogram, but the price has decreased to Rp 3,500 per kilogram,” Lalu Musdar, a farmer from Janapria, Central Lombok, argued. “The tobacco companies are manipulating the costs as they wish. We wish the governor to urge them to purchase tobacco from us at a fair price.”
Musdar, who had planted Virginia tobacco on more than 1.3 hectares of his farm in Janapria, explained he would suffer big losses of up to Rp 70 million if he fails to sell his harvest.
Operational costs for growing tobacco this year have increased as sale prices have dropped. Musdar declared that he rented 1.3 hectares for to cultivate the tobacco for Rp 8 million, while his other costs have also raised.
The price of fertilizer, for example, has increased from Rp 200,000 to Rp 300,000 per quintal. Musdar reported that he paid for 8 quintals to raise his tobacco crop.
Labor wages have also risen sharply, from Rp 15,000 last year to Rp 35,000 this year.
“If the price of tobacco is Rp 30,000 per kilogram, we might gain a less profit, but the price has dropped. For our production expenses, we borrowed from the cooperative and loan sharks at a high interest rate,” Musdar added.
Tobacco growing is centered on three regencies on Lombok Island: Central, East and West Lombok. More than 16,373 hectares were dedicated to tobacco cultivation for 2012.
The farmers set a production target of 32,464 tons, which they had planned to sell to 21 partner tobacco companies.
However, five firms backed out of purchasing from the farmers, while several others reduced the size of their procurement citing a declined in cigarette production. Another tobacco farmer, Fatahillah, urged the provincial administration to avoid the operational licenses of companies that failed to increase their prices for tobacco crop.