THE tobacco industry in Indonesia is facing significant challenges, particularly for tobacco farmers.
The demand for tobacco from cigarette manufacturers has decreased, leading to a decline in the price of tobacco and affecting the livelihoods of farmers.
This decrease in demand is attributed to several factors, including the increase in tobacco excise tax and the proliferation of illegal cigarettes in the market.
The impact of the decrease in demand for tobacco on farmers is substantial. The price of tobacco has dropped significantly, with the average price now below IDR 75,000 per kilogram. This has resulted in a decline in the income of tobacco farmers, making it challenging for them to sustain their livelihoods.
Furthermore, the decrease in demand has also led to a reduction in the absorption of tobacco by large cigarette manufacturers, such as PT Gudang Garam Tbk.
The current situation for tobacco farmers in Indonesia is precarious. The production of tobacco in Temanggung, Central Java, Indonesia, a major tobacco-producing region, is expected to reach 10,000-11,000 tons this year.
However, the absorption of tobacco by large manufacturers has decreased significantly. Some manufacturers, such as Nojorono and Sukun, have reduced or even stopped purchasing tobacco from farmers.
To address the challenges faced by tobacco farmers, the government needs to consider the impact of the increase in tobacco excise tax on the industry.
The government should also take steps to reduce the proliferation of illegal cigarettes, which is a major contributor to the decline in demand for tobacco.
Additionally, the government should provide support to tobacco farmers, such as providing training and resources to help them improve the quality of their tobacco and increase their productivity.
The government plays a crucial role in supporting tobacco farmers and addressing the challenges faced by the industry. By providing support to farmers and taking steps to reduce the proliferation of illegal cigarettes, the government can help to stabilize the demand for tobacco and support the livelihoods of tobacco farmers.
It is essential for the government to take a comprehensive approach to address the challenges faced by the tobacco industry and ensure the sustainability of the industry.
Eventually, the challenges faced by tobacco farmers in Indonesia are significant and the government needs to take steps to address these challenges. By considering the impact of the increase in tobacco excise tax and reducing the proliferation of illicit cigarettes, the government can help to stabilize the demand for tobacco and support the livelihoods of tobacco farmers.
The government should review the tobacco excise tax policy, strengthen enforcement measures to prevent the proliferation of illicit cigarettes, and provide support to tobacco farmers to help them improve their productivity and quality.
The government of Indonesia should also consider the long-term detrimental impacts.
