JAKARTA, KOMPAS — The government is trying to deal with the falling shallot price. The Trade Ministry, via its directorate general of domestic trade, has asked relevant state-owned companies to purchase the farmer’s shallots through a business mechanism.
Director general of domestic trade Tjahya Widayanti said on Thursday (12/10) that the trade ministry had asked PT Perusahaan Perdagangan Indonesia (PPI) to buy farmers’ shallots. The buying price rests with PT PPI or it can be determined through a business to business (B2B) format.
Tjahya said the Trade Ministry placed itself between the producers – or farmers – and the consumers. Farmers must not suffer losses and the price must not be too burdensome for consumers. Another alternative was to implement the storehouse system and to find a market for commodity products facing falling prices.
It would be an advantage if the local administration collaborated with other regions in need of shallots. “That way, the surplus commodity could be marketed to regions in need,” said Tjahya.
Meanwhile, the Agriculture Ministry, through its chilies and vegetables sub-directorate head Agung Sanusi, said this year’s shallot production showed a surplus trend.
This month, production is estimated to reach 108,987 tons, while the national demand is around 99,374 tons, producing a surplus of 9,613 tons. Agung did not explain any further steps to be taken to deal with the surplus production, saying only that shallot production would exceed demand in the next few months, with the October-November surplus estimated at 20,000 tons.
The risk of falling prices is due to poor downstream efforts.
Low prices
Meanwhile, the outcry of farmers at food production centers, particularly in areas producing shallots, remained unheard as farm-level selling prices stayed low.
Shallot farmers in Pangenan and Gebang of Cirebon regency, West Java, are not harvesting their shallot fields because of the falling shallot price over the past three months. They are instead cultivating corn.
“The farmers here are waiting for the prices to increase so they can grow shallots again in November,” said Warta, 52, a Gebang shallot farmer.
The price current is Rp 5,000 per kilogram for wormy wet shallots and Rp 6,000 per kg for small shallots.
The selling prices are far below the reference price of Rp 15,000 per kg for wet shallots, and have incurred losses for farmers.
Warta said the 1-hectare shallot farm that he worked on only made a Rp 30 million profit, when he had spent Rp 150 million in capital. “Aside from falling prices, the production yield was only 3 tons. There are many worms,” he said.
For that reason, Rahmat Gumilar, 28, another shallot farmer, urged state-owned Bulog to buy the crop at the reference price, so that the farmers would not suffer losses. Bulog is also expected to maintain the stability of farm-level shallot prices for the upcoming harvest seasons in November and in January 2018.
Several farmers in Torongrejo village of Junrejo district, Batu, East Java, said the shallot price had fallen to around Rp 5,000-Rp 6,500 per kilogram. The farmers suffered losses because profits are much lower than production costs.
Secretary-general Jamhari of Ambon’s Indonesian Agriculture Universities Communication Forum said the shallot was a strategic national commodity, and that regional and central governments were responsible for maintaining its price stability. It needed post-harvest teams in every region, specially centers of shallot production, to achieve this.
“The government needs to calculate the production cost. If the price falls below the HPP [floor price], the government must buy the commodity. That applies particularly to strategic national commodities,” he said.