Articles
STUDY ON UNRETURNED LOANS FROM SUGARCANE INTENSIFICATION CREDIT SCHEME IN INDONESIA: ITS REASON AND CONSEQUENCES IN THE CASE OF EAST JAVA
Among agricultural commodities with credit schemes, sugarcane credit scheme has the highest proportion of unreturned loans.
A survey method has been applied to collect data from several villages of East Java selected randomly that represents irrigated sugarcane areas and non-irrigated sugarcane areas.
From the microstudy, it has been discovered that unreturned loans occur because of several reasons.
For irrigated sugarcane, the first reason is faking the land size by individuals, that varies from farmers’ group member, group leader, village head, to chairman of Village Unit Cooperative.
The second reason is undue harvesting time and unavailability of transportation means supposedly provided by the sugar factory.
The third reason is deliberate refusal of paying loan because of personal reason.
The reason for non-irrigated sugarcane loan unrepayment is a refusal of paying the remaining loan because of obtaining lower revenue than the total loan by the farmers.
They believe the crop failure is the responsibility of the supervisor who practically farm the land, since farming sugarcane on non-irrigated land is new for them.
Serious attention by the Indonesian Government is required in dealing with this problem, especially when under the new policy, sugarcane production within five years time is dramatically to be shifted from irrigated land to non-irrigated land.