The Policy Has Not Motivated Farmers

With a policy design that is considered less supporting of the development of the upstream business, cattle farming seems to be a futile job. Farmers must be prepared with the risk of loss at any time.

KOMPAS/FERGANATA INDRA RIATMOKO

Two breeders bathe their cows in Jemawan Village, Jatinom, Klaten, Central Java, Monday (9/1/2023). The Bimetal cattle are routinely cared for so they have a high selling value when offered to the animal market during the upcoming Eid.

Cattle farmers have faced a difficult situation in the last few years. With all limitations, they must face complex problems downstream.

Imagine, to produce 1 kilogram of fresh beef at the consumer level, the cattle industry players must spend a production cost of Rp 140,000 per kg. However, the price of sales reference at the consumer level is pegged lower than that number. Local beef must also "fight" with imported buffalo meat, whose selling prices are much lower.

The reference price of beef at the consumer level, according to the Regulation of the National Food Agency Number 11 of 2022, is set at Rp 130,000 per kg for fresh front thighs and Rp 140,000 per kg for fresh back thighs.

In fact, according to the chairperson of the Indonesian Cattle and Buffalo Farmers Association, Nanang Purus Subendro, the price of beef at the consumer level is around Rp 140,000 per kg. "The price policy [for beef] is currently more in favor of consumers," Nanang said in an online interview with the Research and Development Division of Kompas, on Tuesday (14/3/2023).

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An analysis of Consumer Participation Data from Statistics Indonesia (BPS) shows that middle to upper class community groups and households in big cities dominate beef consumption. That means, said Nanang, farmers seemed to subsidize wealthy community groups because prices at the producer level were often depressed.

The cattle farmers, said Nanang, deplored the presence of imported buffalo meat, which helped suppress the price of beef produced by domestic farmers. "With the cost of beef production around Rp120,000 per kg, we have to compete with imported buffalo meat from India, whose selling price at the consumer level is Rp 80,000 per kg. We also have difficulty in selling because there is a seepage of imported buffalo meat in the beef market," he said.

The policy of meat imports from India is actually intended as a short-term step to reduce the fluctuating prices of beef in the domestic market. However, imports have continued since 2016 with an increase in volume from year to year.

With the cost of beef production around Rp120,000 per kg, we have to compete with imported buffalo meat from India, whose selling price at the consumer level is Rp 80,000 per kg.

BPS data quoted in "Outlook of Beef and Buffalo Meat 2022" showed that the volume of Indonesian beef imports rose from 52,782 tonnes in 2015 to 148,964 tonnes in 2016. During the 1996-2015 period, the import volume ranged from 8,526 to 107,172 tonnes per year. But since 2017 the volume has always been above 150,000 tonnes per year and tends to rise. In 2021 the volume of beef imports had reached 276,761 tonnes, while throughout January-September 2022 it reached 227,266 tonnes.

This year, the volume of imported beef-type meat from India has not shown a downward trend. In January 2023, for example, the import volume reached 13,496 tonnes. This number jumped when compared with January 2022, which was recorded at 308 tonnes and December 2022, which was 28 tonnes. Imports of cattle meat from India throughout 2022 reached 105,756 tonnes or up from the previous year recorded at 89,954.8 tonnes.

YOHANES MEGA HENDARTO

A trader prepares beef cuts since dawn at the Kramat Jati Main Market, East Jakarta (13/3/2023). Meat prices ahead of the fasting month are at Rp. 130,000 to Rp. 140,000 per kilogram for deep-cut beef. Meanwhile, imported beef is sold at prices starting at IDR 120,000 per kilogram.

Curbing the prices

In addition to struggling with the competition with the price of meat in the market, said Nanang, farmers now face difficult situations after losses due to outbreaks of mouth and nail diseases (PMK) last year. Farmers who had to reject cows earlier faced a decline in production value of 40-50 percent. Meanwhile the selling price of healthy cows fell 10 percent and cows that recovered from PMK dropped by about 15 percent in their weight.

The situation weakened the motivation of farmers. In fact, if there is a promising business incentive, at least the selling price of cows is profitable, farmers will be moved to improve the scale of business and production. In the long run, the situation that benefits farmers will boost the production of cattle as well as strengthen national food security.

According to head of the National Food Agency, Arief Prasetyo Adi, the import of frozen buffalo meat is effective to provide meat choices to the community. He added that the imports of buffalo meat for Lebaran 2023 were estimated to reach 17,000 tonnes.

Regarding the impact on the imports of frozen buffalo meat on the cattle farm industry, Arief added, domestic production must be well prepared. "Mainly by all components of this nation," he said when contacted on Wednesday (22/3/2023).

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Meanwhile, Indonesian Ombudsman member Yeka Hendra Fatika assessed that buffalo meat imports should be for the food industry that produces processed meat, such as meatballs or sausages, and not for direct consumption of the community. Thus, industry players can get cheaper raw materials, while the consumer market gets meat from cattle, which is farmed in the country.

According to Yeka, the development of cattle takes more than 10 years, so it may not depend on political decisions. "Superior broodstock nurseries must be strengthened at the Animal Husbandry Center, which is managed professionally, so that it can benefit breeders. The development of land for feed should also be given attention," he said.

Since Friday (17/3), Kompas has contacted the director general of Animal Husbandry and Animal Health at the Agriculture Ministry, Nasrullah, related to the government's efforts to increase the population of cattle and the welfare of farmers. He asked Kompas to contact the public relations team (Humas). However, until this news was published, there was no answer.

This article was translated by Hyginus Hardoyo.