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Violence, tension hurt economy in Aceh

Reuters - October 7, 1999 (slightly abridged)

Lewa Pardomuan, Jakarta – Violence between Indonesian troops and separatists is hurting the local economy and scaring off investors in the northern Sumatran province of Aceh.

One of the hardest hit sectors in the resource-rich province is coffee growing, traders said on Thursday. Nearly 40 percent of Indonesia's output of the arabica coffee variety comes from the staunchly Moslem province.

But many coffee growers have been forced to abandon their plantations in Aceh, the traders said, for fear of violence or because migrant plantation workers have been attacked.

Production has fallen and coffee bean shipments to the central Sumatran commodity city of Medan have often been disrupted by violence on the main road from Aceh.

"The main issue is security. Buyers are reluctant to take positions while farmers are worried about their safety because plantations are located in remote highlands," said one trader in Medan.

"I think 30 percent of the arabica plantations in Aceh have been abandoned. You may not hear of fresh violence lately, but still everyone is cautious," said the trader who has a plantation in Aceh.

Workers on the plantations, many of them settlers from the main island of Java, have become targets of repeated attacks amid escalating violence. They have largely fled.

Road transport firms have suspended coffee bean shipments to Medan on a series of occasions after a spate of arson attacks. Coffee is transported by land from Aceh to Medan, which is also the main export port from Aceh.

"Transport of coffee from Aceh to Medan is still smooth, but drivers do not dare to bring the commodity in the evening for security reasons," another trader in Medan said.

"I don't hear new reports of violence, but the thing is that is everyone is scared in Aceh," he added.

"Harvesting has started in Aceh, but they [plantation owners] just cannot find workers to harvest the coffee. Workers used to be the Javanese settlers, but they have gone because of the violence," a third trader in Medan said.

Indonesia's arabica output constitutes up to 15 percent of the country's coffee production, which is expected to stand at 450,000 tonnes in 1999/00 (Oct-Sept) against 380,000 tonnes in 1998/99.

Traders said they had yet to estimate a decline in output because of the unattended coffee farms. The official Antara news agency said on Thursday Aceh exported 3,688 tonnes of arabica in Jan-Sept against 4,011 tonnes in the same period in 1998.

It said the coffee was exported to the United States, Japan, Taiwan, Singapore, Germany and Denmark. Dry-processed arabica is currently on sale at 14,000-15,000 rupiah/kg.

Arabica plantations in Aceh represented 97,886 hectares of land, Antara said.

The Indonesian Coffee Association said the high costs of growing the aromatic and expensive variety, problems in finding suitable highlands and violence in Aceh had triggered slow growth in arabica.