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Supporting the Governance of Subsidized Fertilizers to be Right on Target

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By: Astari Kusuma Dewi

We should support the implementation of subsidized fertilizer management as a community. The management of subsidized fertilizers that are right on target will make their distribution more optimal, so as to encourage the optimization of agricultural products.

On July 8, 2022, the Government officially limited fertilizer subsidies to farmers. This is in line with the promulgation of Minister of Agriculture Regulation (Permentan) Number 10 of 2022 concerning Procedures for Determining the Allocation and Highest Retail Price (HET) of Subsidized Fertilizers in the Agricultural Sector.

Director General of Agricultural Infrastructure and Facilities of the Ministry of Agriculture (Kementan), Ali Jamil explained that previously there were six types of subsidized fertilizers. However, following the global geopolitical turmoil due to the Russo-Ukrainian War which resulted in an increase in world fertilizer prices, currently only two types of fertilizers are subsidized, namely Urea and NPK (Nitrogen, Phosphate, and Potassium).

Ali added that the increase in energy prices, both oil and gas, also had an impact on the increase in global fertilizer prices. This is because if one of the raw materials for fertilizer increases, the world fertilizer price will also increase. A report from the World Bank states that the increase in fertilizer prices has reached 30% in 2022.

In the Minister of Agriculture Number 10 of 2022, in addition to the limited types of fertilizers, subsidized fertilizer commodities are also cut. Previously, the allocation of subsidized fertilizer was for 70 types of commodities, but currently subsidized fertilizer is only for 9 main commodities. The nine main commodities are rice, corn, soybeans, chili, shallots, garlic, sugar cane, coffee and cocoa.

Deputy for Food and Agribusiness Coordination, Coordinating Ministry for Economic Affairs (Kemenko Ekonomi), Musdhalifah Machmud said subsidized fertilizer types will be distributed to 9 main commodities to support the realization of better food security in the future. Currently the Government provides a budget of Rp. 25 trillion for the allocation of subsidized fertilizer which is expected to reach at least 16 million farmers in Indonesia.

Musdhalifah then added that currently improvements are being made to the management of subsidized fertilizers. This improvement in the management of subsidized fertilizers is carried out by digitalization in the distribution process and in the redemption of subsidized fertilizers, as well as in the preparation of data on recipients of subsidies to be more targeted.

He said the subsidized fertilizer policy was a strategic step from the Indonesian government to optimize the distribution of subsidized fertilizer, both to farmers and to encourage optimization of agricultural products, maintain food security, and to improve farmers’ welfare.

Subsidized fertilizers will be given to farmers who meet certain criteria. Farmers who are entitled to be recipients of subsidized fertilizers must have a maximum of 2 hectares of cultivated land per season, and must be incorporated into farmer groups and registered with Simluhtan (Agricultural Extension Management Information System).

Simluhtan is an Agricultural Extension Management System, which provides an online-based database that is built to improve the quality of accurate data collection on extension institutions, extension personnel and institutional main actors, so that they can be used in determining extension policies and agriculture broadly. This Simluhtan is a reference for data managers by admins at the center and regions in carrying out the input process.

Farmers who qualify as recipients of subsidized fertilizers are determined at each level of government by the relevant officials. The allocation of subsidized fertilizer at the central level is determined by the Ministry of Agriculture. Then the allocation at the provincial level is determined by the Governor, then the Regent/Mayor determines it at the district/city level.

This system improvement is carried out to provide convenience, openness, and transparency for users of subsidized fertilizers. The distribution of subsidized fertilizers from retail kiosks to farmers uses Kartu Tani and is carried out through Electronic Data Capture machines and/or digital applications. If the distribution of the Farmer Card is not yet available, then the distribution can use an Identity Card (KTP).

The Head of the Ministry of Agriculture’s Human Resources Extension and Development Agency (PPSDMP), Dedi Nursyamsi said that the subsidy for Urea and NPK fertilizers is because these fertilizers are primary (main) macro nutrients needed by many types of food crops. For information, macro nutrients are nutrients that plants need in relatively large amounts, such as Nitrogen (N), Phosphorus or Phosphorus (P), and Potassium (K), Magnesium (Mg), Calcium (K), Sulfur or Sulfur (S).

Meanwhile, Marketing Director of Pupuk Indonesia, Gusrizal, said he was ready to support the subsidized fertilizer program. He ensured that the urea fertilizer and NPK fertilizer factories were operating properly. Indo Fertilizer Factory

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