Non-Prospering Policy

Beef imports are often sought after to maintain price stability in the market. However, is it a proper policy?

KOMPAS/TOTOK WIJAYANTO

Beef traders are sorting meat requested by buyers at the Jatinegara Market, East Jakarta, Sunday (9/10/2022). To stabilize prices and supply of meat towards the end of 2022 to early 2023, the government is importing 20,000 tons of frozen buffalo meat from India and 20,000 tons of frozen beef from Brazil.

Every year, when a festive season approaches, beef prices skyrocket as demand increases. Based on the National Food Agency's price panel, the average retail price of beef rose from Rp 134,450 to Rp 135,560 per kilogram during the 17-24 March, 2023, period.

The price of whole beef, or daging sapi murni, was Rp 125,950 per kg in January 2022, before it rose to Rp 134,780 per kg when Idul Fitri fell in the following May. As in the previous years, the government carried on with beef import permits last year. Starting in 2016, the government has also brought in frozen buffalo meat from India.

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> The Policy Has Not Motivated Farmers

> Maintaining Meat Supply with Domestic-Scale Self-Sufficiency

Based on the Beef Livestock Commodity Outlook released by the Agriculture Ministry in 2022, Indonesia imported 2,100 tonnes of beef in 1969. The figure amounted to 276,761 tonnes in 2021, while the beef domestic production in the same year was reported at 487,802 tonnes, according to data at Statistics Indonesia (BPS).

The government has been pushing ahead with efforts to overcome constraints in beef supply. Regional governments initiated cooperation in cattle and beef procurement. Ships are in place to facilitate the transportation of livestock from producer to consumer regions. They also cooperate in the livestock breeding industry at designated producing regions. However, imports have remained an option to help tackle shortage of supply for domestic demand.

MIS FRANSISKA DEWI

Imported meat from Brazil in the cold room of Perumda Dharma Jaya, Cakung, East Jakarta, Friday (16/12/2022).

Can import policy suppress price hikes? In 1983, when the exchange rate was Rp 970 per US dollar, the price of beef was Rp 2,536 per kg. In 2015, given the exchange rate ranging between Rp 12,400 and Rp 13,700 per US dollar, the price of beef was Rp 100,000 per kg (Kompas, 23/3/2023). The price of beef in 1983 was around US$2.60, while in 2015 it was between $7.30 and $8.00 per kg.

During that period, consumers bore the brunt of hikes in price from year to year. Did cattle breeders automatically enjoy the windfall and thrive in livelihoods? Based on the BPS data, the Farmer Exchange Value (NTPT), which is the ratio of farmers’ incomes to their household expenses, in February 2023, was 99.76, down from 100.35 in January 2023. Throughout 2021, except for June and July, the NTPT was below 100. As for 2022, the NTPT was above 100 for most of the year, except for February’s 99.17.

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> Beef Threatened Only to be Enjoyed by the Upper Class

> Meat Imports Fail to Control Prices

An indicator of livestock farmers’ welfare, an NTPT below 100 means the price index gives farmers less than what they pay. An NTPT below 100 also indicates livestock farmers incur losses.

Import policy may serve as a solution to problems in supply of consumption goods in the short term. Is there not any long-term policy that can improve farmers’ prosperity? Can there be any policy that earns cattle breeders deserved pride for being the spearhead of the drive for national self-sufficiency in beef catering?

This article was translated by Musthofid.