Health RPP Could Hit Kretek Factories, Clove Farmers Shout News – 2 hours ago

Jakarta, CNBC Indonesia – Clove farmers have opened their voices regarding the Draft Government Regulation (RPP), derivatives Law (UU) No 17/2023 concerning Health. Currently, the RPP is being drafted by the government, containing a number of prohibitions and controls related to the production and sale of tobacco products and e-cigarettes.

This Health RPP will have an impact on millions of clove farmers who are part of the cigarette industry supply chain. Farmers are also worried that clove production will slow down.

“There are around 1.5 million clove farmers, around 6 million people with their families are involved there. And they depend on the kretek cigarette factory, if the cloves are for kretek cigarettes, this could be affected,” Secretary General of the Clove Farmers Association Indonesia (APCI) Ketut Budiman to CNBC Indonesia, Monday (20/11/2023).

Budiman has also conveyed his disagreement with the RPP to the government. He hopes that the government can think about the broad impact on clove farmers if the RPP is passed.

“Because this RPP for health is very unfriendly to the tobacco ecosystem, we clearly reject it firmly,” said Budiman.

Moreover, currently clove farmers are enjoying quite high prices after experiencing sluggish prices for several years. Currently, the price of cloves is around IDR 140,000/kg, even though since 2015 the price of cloves has fallen to IDR 50 thousand/kg due to the impact Minister of Trade Regulation (Permendag) No 75/M-DAG/PER/9/2015 of 2015 concerning Revocation of Decree of the Minister of Industry and Trade No 528/MPP/KEP/7/2002 concerning Clove Import Provisions (Permendag No 75/2015).

He said that the price of cloves has improved again since 2021 due to limited supply. However, when clove farmers are enjoying their ‘sweet’ period, it is feared that the price of this commodity could fall again because of the Health RPP.

“95% of the end users of cloves are clove cigarette factories. The decline in the clove cigarette industry will of course reduce clove uptake, there will be an oversupply which will impact prices, which will certainly be detrimental to our clove farmers,” said Budiman.

[Gambas:Video CNBC]

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