Farmers’ groups accuse American kratom industry, AKA of unfair business practices that keep prices, quality low
Two cooperatives representing Indonesian farmers are calling on their government to stop kratom exports to the United States until agreed-upon trade regulations are in place.
On November 13, 2023, the Indonesian Horticulture Entrepreneurship Association (PPHI) and the Anugerah Bumi Hijau Producers Cooperative (Koprabuh) sent an open letter to Indonesian President Joko Widodo’s chief of staff Moeldok.
News about the letter was released on November 27, 2023, the same day President Widodo and Minister of Trade Zulkifli Hasan met to discuss possible kratom trade regulations.
Koprabuh spokesperson Yohanis Cianes Walean told CNN Indonesia the farmers are calling for “temporarily suspending kratom exports to the USA, until there is agreed governance that leads to quality kratom, fair prices, fair to producers and users who prioritize quality for export.”
The groups say that American vendors have not paid for millions of dollars worth of kratom, due in part to seizures by the Food and Drug Administration (FDA), but also due to a Cash-On-Delivery (COD) system they say was implemented by the American Kratom Association (AKA). This system protects American kratom importers from having to pay for a product that has been either contaminated or seized by the FDA, yet leaves farmers without compensation for their product. Farmers say proper regulations are needed in both countries to improve this trade system.
Kratom from Indonesia is sometimes contaminated with bacteria or high levels of lead. In a 2021 interview with Kratom Science, PPHI representatives said the poor quality is an unavoidable result of low prices (about $4/kg) being offered by American kratom importers. A higher price would allow kratom farmers to implement cleaner practices and infrastructure, they told us.
Ideally the price is $12/kg, because there must be a washing process, where the indoors is separate and free from dust and animal contamination, as well as standard food grade milling machines, which we try to purchase together in order [to be able to afford it], especially considering that most people are processing manually.
PPHI told us that their “standards seem to have been kept low, on purpose.” They mentioned American business interests in general, but not the AKA specifically, in our 2021 interview.
From CNN Indonesia:
Yohanis said that a number of kratom associations together with AKA had signed the Binagraha Charter at the Office of the President’s Chief of Staff on August 8 2022.
According to him, the charter is the basic rules for managing kratom. However, said Yohanis, AKA never implemented and violated all its rules, including cash and carry rules.
PPHI-Koprabuh assesses that the trade imbalance created by AKA is putting pressure on kratom traders in Indonesia. Apart from that, AKA also carries out direct transactions from farmers and destroys prices, giving rise to hoarding of kratom products in the US.
“This practice even creates panic selling which makes Indonesian traders hoard Kratom in the US, paid after it is sold, causing the price of kratom to plummet even further. [Kratom] is offered at US$ 4/kg in the US and it is difficult to sell, without deducting warehouse costs which are increasingly strangling ,” he said.
The groups say that these business practices create “unhealthy competition among kratom farmers throughout Indonesia”.
While the Minister of Trade gave the greenlight for trade in kratom, Indonesia’s National Narcotics Agency (BNN) wants the plant to be outlawed as a “class 1 narcotic”, similar to Schedule 1 in the US. While the BNN is unable to make laws, the Ministry of Health is currently researching kratom to determine whether it can be considered a narcotic.
Should President Widido and Minister of Trade Hasan implement stringent trade regulations that would require testing and other standards before export, this could ensure an overall increase in the quality of kratom consumed by Americans.
According to the PPHI, this would improve the overall market, even in the US.
The market requirements are always very large, there is often over-supply, which becomes speculation, drops prices and makes the USA government agencies’ jobs, especially that of the FDA, very difficult to supervise the distribution and use of kratom.
US Consumer Protection Laws Championed by AKA
Lack of regulation in the US increases the risk of kratom being consumed with toxic levels of lead or in unintentionally high doses via unlabeled, extremely strong extracts. The AKA’s domestic lobbying has helped to pass the Kratom Consumer Protection Act (KCPA) in 11 states. These acts codify that kratom not be sold to minors, and that the product should not be contaminated with bacteria or high amounts of residual solvents (from the manufacturing process in extracts), adulterated, or contain elevated amounts of 7-hydroxymitragynine.
These laws have been passed with various levels of enforcement in the states. In Oregon, for example, funds have been allocated specific to enforcing the state’s KCPA requirements. In a Georgia wrongful death lawsuit, however, the kratom extract company OPMS was accused of failing to comply with KCPA laws.
A federal kratom bill currently in Congress would require the Department of Health and Human Services to research kratom. It would also limit the FDA’s power to impose import alerts (first implemented by the FDA when Daniel Fabricant, current CEO of the Natural Products Association, was head of the FDA’s Division of Dietary Supplements) and to “impose requirements on kratom or kratom derived products that are more restrictive than the requirements for food, dietary supplements, and dietary ingredients”.
Farmers’ Group Says Kratom Helping the Economy, Environment
A spokesman for Indonesian Purik Farmers Association (Appuri), Mr. Ibrahim, said he was pleased at the meeting between the president and minister of trade. He said it resulted from both an AKA delegation meeting with the Ministry of Trade in July of 2023, and President Widodo’s recent visit to the United States where he met with President Biden.
Ibrahim emphasized the importance of kratom agriculture to his local economy in an interview with the news organization PIFA:
“If this kratom or purik was a narcotic, we in Kapuas Hulu would be a damaged district because of the influence of this kratom. In fact, it’s not. In fact, now the economy of the people of Kapuas Hulu and West Kalimantan in general is progressing because of this kratom,” said Ibrahim.
He added that the crime rate in Kapuas Hulu has also fallen, because the economy and education level of the community has improved.
“Kratom supports the community’s economy. Apart from that, this is a green economy that is being advocated by world leaders, including Mr Jokowi’s program which prioritizes carbon plants,” he said.
Millions of kratom trees grow wild in Indonesia. A ban on kratom would give BNN the justification to eradicate them. Local officials worry about the environmental impact of deforestation from this prohibitionist policy. In November 2020, Alue Dohong, the Deputy Minister of Environment and Forestry, told the Pontianak Post that “because it is an endemic plant and is characteristic of the area, we encourage it to remain there, not to be destroyed.”
The former governor of Indonesia’s West Kalimantan province, Kalbar Sutarmidji, asked the Indonesian president not to ban kratom. If deforestation due to a ban on kratom happens, he said in 2020, “I’m sure it will be a world problem because Betung Karihun and Lake Sentarum (national parks) have been designated as the lungs of the world.”