Erick Thohir Wants Indonesia To Be Self-sufficient In Sugar

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir said he has ambitions to realize sugar self-sufficiency in the country.

Although it is difficult because of complex problems, Erick said that self-sufficiency in sugar does not mean it cannot be done.

"Regarding self-sufficiency in sugar, I have said before, that we will carry out this in the future. (This) is not easy. Because the problem is so complex," he was quoted as saying on the Instagram account @erickthohir in Jakarta, Saturday, August 28.

For information, national sugar production is difficult to increase due to several factors. Starting from upstream to downstream factors. Among other things, sugar farmers who have not been fully absorbed by the market, so lack enthusiasm for sugarcane plantations.

However, Erick said he was optimistic that he would be able to achieve the noble goal of self-sufficiency in sugar if accompanied by good intentions and hard work.

"But God willing, Lillahi Ta'ala, we try to fix it even though I know that this is still a lot of challenges, and many don't like it. But Bismillah, we try to do the best for our people," he said.

Erick said the establishment of the Sugar Company or SugarCo sugar mill holding was also in line with the target-directed by President Joko Widodo, which was to return to the backbone of PTPN by not leaving the private sector.

According to him, in the next 5-6 years, Indonesia should no longer be a country that imports consumption sugar. Erick asserted that he is not anti-import, not anti-private, but the rules of the game must be improved.

National Sugar Production Monopolized by Three Groups

University of Indonesia (UI) senior economist, Faisal Basri, said monopolistic practices, especially in food management, were still very strong. One of them occurs in the sugar commodity. He said the national sugar production was only controlled by three groups.

Faisal said they control as much as 96.2 percent of the total national refined sugar production. The three groups are Martua Sitorus, Kurniadi and Edi Kusuma. Of the three, they are in charge of 11 refining companies that have been granted permits by the government. "Those three groups control 96.2 percent of refined sugar production. So it's just a matter of time before the national sugar industry will collapse one by one and we will depend on imports," he said in a virtual discussion, Thursday, August 26.

Faisal assessed that these three groups often play with import policies through regulations issued by the government. He said, the goal is to get more profit from sugar imports.

For example, continued Faisal, in the 2014 Law Number 39 Article 74 it is stated that each processing unit of certain plantation products with imported raw materials is required to build a plantation no later than three years after the processing center operates. However, that rule was later annulled by the existence of the Job Creation Act.

In a derivative rule in the form of Government Regulation (PP) Number 26 of 2021 Article 30 paragraph 2 states that the sugar cane processing unit made from imported raw materials does not include refined sugar processing units.

Therefore, said Faisal, they are free from the obligation to build plantations even though they have been operating for decades.

"So their obligations have been terminated through the PP which is inserted in the explanation. There are 11 refined sugar companies that have been granted permits even though they cannot plant (sugarcane) in the garden," he said.

According to Faisal, due to the unclear regulations set by the government, Indonesia's potential to achieve food self-sufficiency is very difficult and continues to depend on imported raw materials. This is reflected since 1937, which had become the second-largest sugar exporter in the world, while now it has become the second-largest sugar importer in the world.

"The rent-hunters are now smuggling the articles in those provisions. I think it's very dangerous, I hope my friends from the Corruption Eradication Commission (KPK) have caught it," he said.