Lost Glory of the Past
Some tobacco farmers are switching to different commodities. They are cornered by regulation and poor trade system.
AS far back as he can remember, since the time of his parents and grandparents, Agus Parmuji has always depended on tobacco farming for a living. Agus, chief of the Wonosari village in Bulu subdistrict, Temanggung Regency, Central Java, cannot image how his village would be without tobacco.
“Tobacco also sent my parents on their haj pilgrimage,” he said during an interview on Thursday, December 17. The four-hectare land he manages as village chief is full with Nicotiana sp, genus of the broad-leaved plant from North and South Americas, otherwise known as tobacco.
Each hectare has a productivity level of between 700 to 800 kilograms of dry tobacco. Agus could yield between 2.8 to 3.2 tons tobacco of the Javanese rolling variety in one growing season.
Agus is not alone. Almost every resident of Wonosari village depends on tobacco. Situated on the slope of Mount Sumbing, the village has around 300 hectares of plantation producing hundreds of tons of tobacco every year.
“It is all about tobacco. School for children, celebrations, all is held after the tobacco harvest,” said Agus. Residents are even paying their village dues in the form of a basket of tobacco worth Rp50,000 for each person. They call it jimpitan or community contribution. After all the tobaccos have been gathered, they will be sold together.
Last year, jimpitan yielded only Rp80 million. In 2018, the number was higher at around Rp100 million. “This year, it could be about Rp150 million,” said Agus. Money obtained from the tobacco contribution is used to fund various needs of the community, such as construction of mosques and art or religious events.
Many other villages in Temanggung Regency are run in similar fashion as Wonosari. Residents of the 14 subdistricts in the tobacco center region are largely dependent upon sales of tobacco in many aspects of their lives. In 2019, for example, the Central Java haj entourage was filled with thousands of pilgrims from Temanggung. They used savings from the great tobacco harvest eight years prior in 2011 to embark on the pilgrimage. During the great harvest, farmers gained revenues up to Rp100 million per hectare.
Unfortunately, this kind of golden age of tobacco is likely soon to pass, for both farmers in Temanggung and elsewhere in Indonesia. The indication of which was described by a team of researchers from the University of Indonesia, who assisted the National Development Planning Agency in their evaluation to establish a roadmap for the tobacco industry.
Based on their surveys to a number of tobacco plantation centers in Indonesia, including Temanggung, Rembang, Magelang (all three are in Central Java), Jember, Pamekasan (both in East Java), and East Lombok (West Nusa Tenggara), farmers in the field mostly face a similar situation. “The farmers’ welfare varies greatly,” said Abdillah Ahsan, one of the researchers in the team. “Many farmers are unsuccessful, suffering losses and wanting to switch (to different kinds of plant).”
Abdillah told of farmers in Magelang and Pamekasan who gave up planting tobacco. They were swindled by their merchant partners who initially promised to buy all of their harvest, but turned around in the middle of the road. “At first they agreed to pay Rp10 million, only to run away after paying Rp2 million,” he said.
Agus Parmuji confirmed the difficult situation currently faced by tobacco farmers. Aside from being the Wonosari village chief, Agus is also chairman of the Indonesian Tobacco Farmers Association’s National Leadership Council. In addition to soil condition, seed quality, and the right time for planting, he said that tobacco farmers now also have to consider the factor of regulation.
One most recent regulation that becomes a hot topic among tobacco farmers is the Finance Minister Regulation No. 8/PMK.010/2020. It concerns the increase of excise rates for tobacco products, which will come into effect on February 1, 2021. Tobacco or cigarette excise is set to rise by 12.5 percent on average.
The government is hoping that cigarettes will be made more expensive by the policy, thereby helping reduce the number of smokers. “The raised tobacco products excise duty will result in higher prices for cigarettes, putting them further out of reach of consumers,” said Finance Minister Sri Mulyani during a virtual briefing on Thursday, December 10.
For tobacco farmers, the increase to excise rates is bad news. Last year, when the government raised cigarette excise by 23 percent, tobacco prices in the market spontaneously plummeted. The usual price of dry, chopped tobacco of Rp70,000 per kilogram dropped to Rp40,000. The cigarette industry drastically reduced their volume of purchase. Some even began implementing a quota system.
The tobacco farming sector, according to Agus, has this peculiar anomaly. For other commodities, increase in product price is usually followed by increase of raw material price. For tobacco, however, the opposite is true: increased sales price of product drops the price of raw material.
Therefore, it is understandable if tobacco farmers are starting to switch commodities. Farmers in Kalisat, Jember, East Java, are among them. Edy Purwanto, for example, said that many tobacco farmers now plant rice or corn. “Some switched from rice to corn, then back to rice,” said Edy, who is also the general chairman of Insan Cita Agro Manadi Foundation, on December 17.
Aside from the ever increasing excise, Edy said that tobacco farmers in Jember are cornered by poor trade system. They often lack bargaining power, being pretty much dependent upon merchants and middlemen for their initial capital. When the harvest season comes around, farmers are powerless as merchants determine the price unilaterally. “Many suffer losses,” said Edy.
Despite their situation, some tobacco farmers remain loyal to the commodity. In Bondowoso, East Java, farmers plant other commodities while waiting for the tobacco planting season between May to October. Misran is one of these farmers. His 4.5-hectare tobacco plantation is being temporarily used to cultivate chili peppers.
Chili is chosen due to its good price. Data from the East Java information system for availability and price development of basic commodities on Saturday, December 19, showed that the price of large red chili in Bondowoso averaged Rp49,500 per kilogram, while cayenne pepper hovered around Rp35,000 per kilogram.
Last year, according to Misran, his tobacco plantation yielded 5 tons of produce. Not all of it was absorbed by the industry. Misran was only allocated a quota of 3 tons to supply to his usual factory customer, with a lower price Rp29,000 per kilogram, from Rp31,000 the year before. Misran was left with two tons of chopped tobacco in his house. “I had to sell them to merchants,” he said. However, Misran admitted that he could not switch to a different commodity. The next time the season comes around, Misran will be planting tobacco again.
The Sahminudin family in Lombok leads a similar life. This year, tobacco farming in Lombok is projected to produce only between 30,000 to 36,000 tons of tobacco. Last year they produced 41,000 tons of Virginia tobacco. The decline is because of farmers suffered major losses last year. Some decided not to plant tobacco anymore. “They gave up and switched to rice, corn, or other crops,” said Sahminudin. However, like Misran, he also said that he would still plant tobacco when the season arrives.