Food import policy is confusing

JAKARTA. Government has decided to enhance import to maintain food price stablility. However, in the other hand, government also imposed additional requirements for conducting import.

For an example, government requires feedloter requires cattle importer to allocate 20% of the total number of its feeder cattle import for breeder cattle.

On the import of raw sugar for refinery, government requires the importer to start domestic sugar cane plantation. Meanwhile, government requires stock feed company, which imports corn through State’s Logistics Agency (Bulog), to build partnership with local corn farmers in  accomodating their corn harvests.

Minister of Trade Enggartiasto Lukita said that the tight import requirement is the commitment of enterpreneurs. Enggartiasto claimed that the objective of the tight import requirement is to create food sovereignty. In this case, the local farmers will suffer loses if  government liberalizes import only for maintaining price stability.

However, the government’s long term program contradicts with the urgent supply needs. General Chairman of Indonesian Food and Beverages Enterpreneur Association (Gapmmi) Adhi S Lukman said that the industrial consumers urgently need large amount of raw sugar supplies in the fourth quarter of 2016. Normally, the demand for refinery sugar from food and beverage industries tends to increase at the end of year.  The reuqirement for opening sugar cane plantation will interupt imports and cause the industry lacks supply of sugar.

Meanwhile, feedloters have objection to the requirement to breed cattle due to the huge investment cost. In addition to the high cost, feedloters also lack capacity in cattle breeding.

The tight  import requirement is unlikely to be effective in reducing import. Food industry observer Andre Vincent Wenas said that the tight import requirement has not yet shown the positive impact to the increase in domestic food industry. In this case, import can be reduced by increasing domestic production. It is suggested that government does not make a short term policy for a long term objective.

(Muhammad Farid/Translator)