Helping Food Producers

A short-term solution is urgently needed to cope with the drop in prices of agricultural and fishery commodities so that the losses suffered by farmers will not further increase.

KOMPAS/P RADITYA MAHENDRA YASA

Farmers plant rice in a rice field in Bulusari village, Sayung district, Demak regency, Central Java, on Monday (4/5/2020). The government will give cash assistance of Rp 600,000 to poor farmers each per month.

JAKARTA, KOMPAS - Distribution disruptions and sluggish demand during the COVID-19 pandemic have caused a sharp decline in prices of the commodities produced by farmers, breeders and fishermen. The food producers need short-term solutions so that their income and purchasing power would not seriously be affected.

Prices of eggs and chicken meat, unhusked rice, corn, fish and chili in a number of production centers in West Java, Central Java, East Java and Lampung, as Kompas observed in the past week, tended to decrease. In addition to falling demand due to the social restrictions or partial lockdowns in a number of regions, commodity prices were also depressed due to heavy rain which reduced the quality of the food crops.

Also read : Farmers Hard Hit by Pandemic

The drop in the prices of the agricultural commodities has caused a decline in the farmer exchange rate (NTP) over the past four months. According to data published by Statistics Indonesia (BPS) on Monday (5/5/2020), the NTP was recorded at 100.32 in April, lower than 102.09 in March, 103.34 in February and 104.16 in January.

The decline in the NTP occurred in all subsectors, food crops, horticulture, community plantations, livestock and fisheries. NTP is an index between the price received by farmers and the price paid by farmers. The drop in FTT reflects the decline in the purchasing power of farmers in rural areas.

Also read : Inaccurate Data Is the Source of the Problem

KOMPAS/FERGANATA INDRA RIATMOKO

Consumers wear face masks while shopping at Pasar Gede Market in Surakarta, Central Java, on Monday (4/5/2020). All visitors and sellers have to wear face masks and wash hands to curb the spread of COVID-19. Sellers who do not wear face masks will be reprimanded and have their license revoked.

According to the head of BPS, Suhariyanto, the decline in the NTP occurred due to the drop in farm gate prices of a number of agricultural commodities. The price of the unhusked rice, for example, fell 6.82 percent to Rp 4,600 per kilogram because of the harvesting time. Prices of a number of commodities in the community plantation such as rubber, palm oil, coffee and cloves, also fell.

The deputy chairman of Commission IV of the House of Representatives (DPR), Daniel Johan, believes that NTP is a crucial parameter in national agricultural and food policy. "If the NTP goes down, farmers are reluctant to plant in the next planting period. This is dangerous for food production and stocks, "he said.

Absorb production

A number of efforts have been taken to protect the prices at farm gate from further falling. The Maritime Affairs and Fisheries Ministry, for example, has cooperated with state-owned companies in the fisheries sector to absorb fishermen\'s catches and fish production to cope with the falling prices.

The effort, among others, was carried out by providing Rp 60 billion in loans to PT Perikanan Nusantara (Perinus) and Indonesian Fisheries Corporation (Perindo) to absorb 3,000 tons of fish.

Also read : Surviving on Donated Rice

KOMPAS/TOTOK WIJAYANTO

A shallot vendor arranges her items at Pasar Senen Market in Central Jakarta on Monday (4/5/2020). In the past month, the price of shallots have continued to increase to Rp 55,000 per kilogram. Declining supply from shallot-producing areas have resulted in price increases.

Maritime Affairs and Fisheries Minister Edhy Prabowo said that cooperation with state-owned fisheries was one of the efforts to absorb fishery products and overcome the unfair practices carried out by middlemen, which have contributed to the drop in prices of agricultural commodities at farm gate.

The loans are provided by BLU-LPMUKP, a business service unit of the fisheries ministry. The loan agreement was signed last week and is expected to increase the absorption of fish catches from SOE partners, BLU-LPMUKP customers, and fish produced by farmers.

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The director of BLU-LPMUKP, Sharif Syahrial said that the LPMUKP clients mostly comprised fishermen and fish farmers. The COVID-19 pandemic has severely hit fishermen and fish farmers due to the decline in demand and distribution disruptions. "State-owned companies in the fisheries sector are expected to be able to absorb the catches of the fishermen and fishes produced by the farmers," said Syahrial.

Meanwhile, in order to overcome the drop in chicken prices, the government has asked integrated poultry companies to absorb the production of smallholder farmers. Agriculture Ministry Animal Husbandry and Animal Health Director General I Ketut Diarmita said that large poultry companies were expected to absorb 4.199 million live chickens from smallholder farmers. Until the beginning of last week, as many as 221,875 chickens had been absorbed.

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KOMPAS/YUNIADHI AGUNG

A man walks past buckets of fish at Muara Angke fish market in North Jakarta on Sunday (2/5/2020). Fish supply at one of Jakarta’s largest fish markets has been stable and trade activity has not been disrupted amid the COVID-19 outbreak. According to some vendors, fish demand during Ramadan has surged due to increased consumption.

However, the effort was considered not optimal. A number of farmers and fishermen, and farmers who were contacted last week hoped the government could ensure that the prices of their products would not fall further. Thus, they can pay off production costs, debt and have enough capital for next season.

Law No. 18/2012 on food mandates the government to stabilize the supply and prices of basic food at the farm gate in order to protect farmers\' income and purchasing power. However, the law has not been fully implemented.

The certainty of the market absorption is more important to maintain income and increase production.

According to the chairman of the Association of Indonesian Farmers and Fishermen (Intani), Guntur Subagja, the food law had not been implemented properly. "The assistance given to farmers is still in the form of a subsidy. In fact, for farmers, the certainty of the market absorption is more important to maintain income and increase production, "he said.

In the implementation, Agriculture Minister Syahrul Yasin Limpo said his ministry had routinely monitored distribution and farm gate prices. The ministry is also trying to cut the distribution chain by building farm shops or farm markets called Toko Tani Indonesia. Until now, there are about 5,051 Toko Tani stores across the country.

The Agriculture Ministry is also engaged in the distribution of staple foods, which is carried out based on a map of the availability of foodstuffs in all regions. (WER/GER/JUD/LKT/MKN)