Farmers Hard Hit by Pandemic
Farmers have been under pressure due to the decline in commodity prices caused by the disruption of distribution and sluggish demand.
Farmers have been under pressure due to the decline in commodity prices caused by the disruption of distribution and sluggish demand. Farm gate prices need to be protected to save farmers and the sustainability of food production.
JAKARTA, KOMPAS — The prices of a number of commodities, such as eggs and chicken, corn, fish, rice, and chili, have plummeted at the farm gate. Supply has begun to rise due to the start of the harvest season, but demand has fallen because of the emergency measures to prevent the spread of the coronavirus.
The disruption of distribution could threaten the sustainability of food production and supply. Therefore, efforts to overcome distribution barriers and boost commodity prices at the farm gate are urgently needed.
Kompas observed the impacts of this situation at a number of production hubs of main commodities in West Java, Central Java, East Java, and Lampung in the course of last week.
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The price of chicken eggs produced by farmers in Blitar, East Java, for example, had dropped from between Rp 20,000 and Rp 21,000 (US$$1.4) per kilogram in early April to between Rp 17,000 and Rp 18,000 per kg by the middle of the month and then plunged further to between Rp 15,000 and Rp 16,000 per kg at the end of the month.
In fact, to earn farmers a profit, the price of eggs should be at least Rp 19,000 per kg in line with the floor price at farm gate as stipulated in Trade Ministery Regulation No. 7 of 2020 concerning farm gate reference prices and reference prices at the consumer level.
According to the vice chairman of the association of national breeders, Sukarman, the government’s partial lockdown referred to as large-scale social restrictions (PSBB) has had a significant impact on the distribution of eggs from farmers because cities or regencies that have imposed the PSBB are the main markets for eggs, such as Jakarta, which absorbs between 65 percent and 70 percent of the total 1,000 tons of eggs produced by 4,000 Blitar farmers per day.
"It\'s not only the prices of the eggs that have dropped. The prices of broiler have also declined due to the fall in the price of chicken meat. There are indications that many eggs for hatching are sold in the market because of the fall in the price of chicken meat,” said Sukarman.
The closure of food stalls, restaurants and hotels has led to a decline in demand for eggs and chicken meat. The situation has hit Warsono, 55, a chicken trader in Teluk, South Purwokerto district, Banyumas regency, Central Java. Sales have fallen from an average of 800 chickens to 200 chickens per day.
The price of chicken at the farm gate has declined as well. According to Warsono, the price of roosters in a number of the poultry farms which mostly sell their chicken in West Java, Central Java and Yogyakarta has dropped from between Rp 25,000 and Rp 30,000 per kg to between Rp 11,000 and Rp 15,000 per kg. The lackluster demand has forced him to lay off two of his four employees.
To cope with the difficulties experienced by farmers, Agriculture Ministry Animal Husbandry and Animal Health Director General I Ketut Diarmita has asked integrated poultry companies to absorb broilers produced by smallholder farmers. These poultry companies are targeted to absorb 4.119 million live chickens to help halt the decline in prices.
Fishermen’s catches
The price of fish caught by fishermen is also affected. "We are in a difficult situation. Our catches are abundant, but demand is limited, causing the sharp drop in prices," said Darman (42), a fisherman from Tegal, Central Java, said on Friday (1/5/2020).
At Tegalsari fishing port in Tegal city, the amount of fish auctioned reaches between 27 tons and 30 tons per day. Under normal conditions, all fish auctioned by fishermen is bought by fish processing companies and fish sellers from Tegal and the surrounding areas. Lately, however, only half of the fish auctioned at the port was absorbed by the market.
As a result, the prices of fish dropped. The price of mackerel, for example, dropped from Rp 100,000 per kg to Rp 50,000 per kg. The price of siro fish fell from Rp 11,000 per kg to Rp 5,000 per kg, while that of squid dropped from Rp 50,000 per kg to only Rp 30,000 per kg.
The increase in production due to the start of the harvest season and rainfall have added to the misery of farmers. The price of corn in South Lampung regency, Lampung, for example, ranges between Rp 1,700 and Rp 2,000 per kg, a sharp drop from Rp 4,000 per kg in December 2019.
According to the chairman of the Association of the Central Lampung Farmers and Fishermen (KTNA), M Amin Syamsudin, some traders offered a higher price of Rp 3,500 for corn with a water content of 14 percent. However, farmers faced difficulty meeting this requirement because they cannot dry corn due to the lack of drying machines and because there was too much rain.
A similar situation was reported by rice farmers on the north coast, namely in Indramayu and Cirebon, West Java. The selling price of unhusked rice at the farm gate in Kalensari, Widasari district, Indramayu regency, for example fell to Rp 3,000 per kg, far below the government reference price (HPP) of Rp 4,200 per kg, while in Lampung, the price of unhusked price is Rp between Rp 3,400 and Rp 3,700 per kg.
However, prices of unhusked rice in other areas, such as in Banyumas, Central Java, and in Malang and Banyuwangi, both East Java, are relatively stable. In Banyuwangi, the price of unhusked rice at the farm gate ranges between Rp 4,300 and Rp 4,500 per kg of GKP, while in Banyumas, the price is between Rp 4,600 and Rp 5,000 per kg.
A number of farmers, farmer groups and farmer associations have appealed to the government to help them cope with the fall in farm gate prices. Setting a price that could give farmers a profit margin is considered the best incentive for farmers to boost productivity while ensuring the sustainability of food production.
Government incentives
The government is preparing incentives for 2.44 million farmers to be able to plant again after the harvest. According to Coordinating Economic Minister Airlangga Hartarto, incentives will be provided in the form of direct cash assistance of Rp 300,000 and in the form of production facilities worth Rp 300,000 every month for three months.
The government also plans to open new land to anticipate food problems. President Joko “Jokowi” Widodo, said Airlangga, had also asked state-owned enterprises (SOEs), local governments and the Agriculture Ministry to open new lands for rice fields, both wetlands and peatlands.
Vice Presidential Office special staffer for economy and finance Lukmanul Hakim has proposed strengthening the role of the Food Security Council both at the regional and national level to coordinate food availability and distribution.
According to Lukmanul, the council could coordinate the main buyers of agricultural produce, livestock and fishery products. This council could also strengthen the distribution process involving SOEs, regional government-owned enterprises (BUMDs), and the private sector in order to prevent imbalances in food supply. (WER/XTI/DKA/IKI/VIO/GER /JUD/ LKT/INA)