KATADATA - The government has started to consider the matter of food prices hike more seriously now. Two ministers are ordered by President Joko (Jokowi) Widodo to keep the stability of food prices so that no side will suffer from it. And regarding the hike in food prices, the President mentioned a “middle man” as the culprit behind this problem.
The term “middle man” referred to large business players that will benefit a lot from the hike in food prices, and stand in the middle of producers (farmers) and consumers. “Don’t let these middle men acquire all of the profits for themselves,” Jokowi said.
The two ministers assigned by the President to keep this matter under control are Thomas Lembong, the Trade Minister, and Amran Sulaiman, the Agriculture Minister. Minister Thomas said that what the President wants is so that there can be balance between producers, consumers, and traders. “Achieving this is not an easy matter. But we’ll keep trying,” he added.
Jokowi also noticed that food prices in Indonesia is much more expensive compared to other nations like Philippines, China, Cambodia, India, Thailand, and Vietnam. Rice is one good example to describe the current situation. 81 percent of Indonesian people always consume rice every day. The hike in rice prices will obviously hit the people hard. And since 2011 to 2015, food prices have increased by 70 percent.
The government has also released another policy package to suppress the food prices. First, the government will loosen livestock import regulations to maintain the supplies of meat within the country. The national need for meat keeps on increasing this year, and the government would want sufficient supplies of meat in order to maintain the stability of prices. For this year alone, the need for meat reaches 674,690 tons or equal to 3.9 million cows per year. However, domestic meat production can only provide 439,530 tons or 2.5 million cows per year. Thus, the remaining number of meat must be imported.
By opening the import option, the government will also add more alternatives in terms of the origins of livestock imported, which can be in the forms of cows or buffalos, and of meat products such as boneless meat from cows or buffalos ranch. This can create more diversifications and competitions between importers, which can help suppress prices.
The second policy is to improve the logistics sector to increase the efficiency and competition as well as build economic connectivity between villages and towns. In Thomas’ opinion, one of the great aspects from the chain of supplies is in the logistics sector. So, it is hoped that the new policy can help sharpened the competition in terms of the shipments. This will also help suppress the transportation costs to transport the food materials.