SUKOHARJO/JAKARTA, Indonesia, (Reuters) — Millions of dollars worth of subsidized fertilizers meant for small Indonesian farmers are being sold to big plantations, such as palm oil and rubber, at huge profits by state-backed retailers, a government report shows.
A shortage of cheap fertilizers at a time when an El Nino weather event is threatening harvests could hurt food supplies in Southeast Asia’s largest economy, scuppering president Joko Widodo’s self-sufficiency targets.
According to the yet-to-be-published government report, as much as 30 percent of subsidized fertilizers were misallocated in some areas of Indonesia last year.
Investigators with the ombudsman found subsidized fertilizer being sold at as high as 18.5 cents per kilogram in 2015, around 40 percent above the state-set price but below the non-subsidized 42.7 cents that plantations must pay.
Farmers complained that distributors held onto stock to force scare supplies and then would sell the stock at higher prices.