Indonesia Criticized for Putting Profits First in Fight for Food Self-Sufficiency

As Indonesia joined the rest of the United Nations to commemorate World Food Day, politicians and agricultural experts said that our country’s food-security policy should lead Indonesia to becoming self-sufficient.

But a week before the celebration began, Megawati Sukarnoputri, chairwoman of Indonesian Democratic Party of Struggle (PDI-P), criticized the government’s reliance on agricultural imports, saying that economic growth would not mean anything to the common people if Indonesia continued to rely on food imports.

“If indeed there is growth, we should not become a nation that is so fond of imports,” Megawati said, adding that government policy makers have a tendency to protect other countries’ interests at the expense of our own.

The volume of imported sugar, rice, fish, fruit and even salt testifies to the wrong approach the government has taken that has weakened Indonesia’s quest for self-sufficiency, she said.

“We are such a rich country, many forces plan to colonize us again and the government is more concerned about fulfilling the interests of the outsiders,” she argued.

She repeated her criticism during a PDI-P congress recently, saying that malnutrition in different parts of the country was evidence of an incorrect approach to food security.

Similar concerns were raised by the chairman of the Union of Indonesian Farmers (HKTI), Oesman Sapta, who said on Friday that the government must end its meat import monopoly in order to ease the burden of millions of Indonesian households.

Oesman said that Indonesian buyers of beef are “enriching importers and their powerful backers whom we know” with up to 100 percent profits. And, he added, during religious festivities such as Idul Fitri, Idul Adha, and Christmas, they earn a lot more.

He said that beef is normally priced at around A$3.50 ($3.60) per kilogram on the Australian market, but when it reaches Indonesia — after adding the 10 percent value-added tax, 10 percent import duty, and 2.5 percent income tax, plus the cost of storage, transportation and other costs — it jumps to A$5.75.

If importers impose a 20 percent profit margin, the market price should be Rp 68,400 ($7) per kilogram. But the market price of beef is Rp 90,000 and during religious holidays it is above Rp 100,000. Last year it reached Rp 115,000 per kilogram, he argued.

“This has been going on for 10 years, and every year millions of Indonesian families collectively spend up to Rp 54 trillion purchasing imported beef, to create huge fortunes for importers.”

Oesman proposed that every importer be obliged to include 10 percent of seed cattle in their imports so that one day Indonesia can reduce its reliance on foreign beef.

Oesman, who also chairs the Advisory Council of the Indonesian Chamber of Commerce and Industry (Kadin), said he would reveal details of this during the “Economic Challenges” talk show on Metro TV on Monday night.

“I want every family and every buyer to know that they can buy quality beef at a lower price without a beef-import monopoly,” he said.

Indonesia can only import beef from Australia and New Zealand, and despite the fact that it can get it from anywhere, no action has so far been taken to relax the restrictions.

Trade Minister Gita Wirjawan has not taken any action to allow imports from Brazil or any other country. Paraguay and other countries are also able to export beef.

Chairman of the House of Regional Representatives Irman Gusman has again called for pro-farmer policies at a time when Indonesia’s adherence to the free market has caused an influx of foreign farm products on the domestic market. He wants the money to remain in the country.

“Farmers can be rich,” he said, “but they must be facilitated” with the right economic empowerment policies, Irman stated.
Agriculture Ministry officials were not available to comment.

In 1985 the UN’s Food and Agriculture Organization gave a medal to then President Suharto for Indonesia’s ability to stop rice imports and produce more than eight tons of rice from every hectare of field space.

Today it is one of the world’s largest importers of farm products.

Even its national food buffer stock agency, Bulog, says that food resilience is a big problem because adherence to the free market means allowing competition.

Bulog spokesman Agusdin Faried said that every time there is drought in America, its impact is felt in every corner of Indonesia because any decline in the supply of soybeans and other farm products often spells disaster locally.