Pupuk Indonesia Continues To Distribute Subsidized Fertilizers Even Though Contracts Are Expiration In June 2024

JAKARTA - President Director of Pupuk Indonesia Rahmad Pribadi ensured that his party would still distribute subsidized fertilizers to farmers even though the first contract worth IDR 26.7 trillion would expire in July 2024.

"So, our commitment together with the government as the budget process is completed, Pupuk Indonesia will continue to distribute fertilizers," said Rahmad on the sidelines of Focus Group Discussion (FGD) 'Building a more adaptive and Effective Subsidy Fertilizer Policy System to Maintain National Food Security' which was held in Jakarta, quoted from Antara, Thursday, July 18.

Pupuk Indonesia received an assignment from the government through the Ministry of Agriculture to distribute subsidized fertilizers totaling 9.55 million tons or Rp. 54 trillion in 2024.

However, from this task, Pupuk Indonesia has just entered into the first contract with a volume of 4.7 million tons with a contract value of Rp. 26.7 trillion. The contract will expire this July.

Rahmad revealed that currently his party has reported this to the Minister of Agriculture Andi Amran Sulaiman. Pupuk Indonesia is currently also working on administration for further contracts.

He emphasized that although there is no further contract yet, Pupuk Indonesia as a BUMN will not allow farmers to have difficulties so that distribution will continue. This is also in accordance with the direction of the Minister of Agriculture Andi Amran Sulaiman.

"I know exactly the Minister of Agriculture all out directly on the same day I reported, called the President (Joko Widodo), called the Minister of Finance and it was agreed. And the ministerial level agreements then we have also been instructed not to stop distributing (subsidized fertilizers)," he explained.

He said that around 150 districts would end their subsidy fertilizer allocation this July. Pupuk Indonesia is committed to continuing to distribute according to the Permentan or allocation that has been agreed upon through the Pupuk Working Group led by the Coordinating Ministry for the Economy.

"So that's the reference, that we will complete the contract count between PI (Indonesian Group) and the government, but farmers must not be harmed," he said.

According to him, if it is normatively, Pupuk Indonesia could only distribute it according to the contract. But because of an emergency, critical situation, where Indonesia needs agricultural production that should not be disrupted, the distribution of fertilizers will continue to be carried out.

"We also agree with the government, the contract is our business with the government. But there is already a policy of the President (Jokowi) with that allocation, that becomes the reference. Hopefully, of course, there will be a process of what if we collect subsidies. But we believe the government will also go all out, will not allow farmers to have difficulties," he said.

The government has set the allocation of national fertilizer subsidies to increase to 9.55 million tons, a double increase from the previous 4.7 million tons.

The addition of the allocation of fertilizer subsidies is contained in the Decree of the Minister of Agriculture (Kepmentan) Number 249 of 2024 and Regulation of the Minister of Agriculture (Permentan) Number 01 of 2024 concerning Amendments to Permentan Number 10 of 2022.

"So it is not an allocation that has run out 9.55 million tons, but a contract based on the first allocation, the volume has run out. But we must not sacrifice administratively because it is more substantive. The substantive is that we must encourage agricultural productivity," said Rahmad.