As growing numbers of Indonesians become frustrated with the rising price of basic foods, such as chili, onion, chicken and eggs, the government faces scrutiny

Hot Seat on Chili Cost

By Yanto Soegiarto on 9:40 am July 24, 2013.
As growing numbers of Indonesians become frustrated with the rising price of basic foods, such as chili, onion, chicken and eggs, the government faces scrutiny.

Not only are citizens upset, but President Susilo Bambang Yudhoyono also recently expressed anger over the public outcry and incapability of his ministers to stabilize food prices.

Based on official statistics obtained from the Central Statistics Bureau (BPS) during the first week of July, the price of red chili (bird’s eye chili) went up to Rp 41,000 ($4) a kilogram — nearly 50 percent higher than the normal price.Recently, it has skyrocketed to Rp 100,000 a kilogram. In some places, such as in Bekasi, West Java, the price soared to Rp 120,000 a kilogram. The price of onions, which is usually only Rp 27,000 a kilogram, has nearly doubled to Rp 52,000, while chicken and eggs have also become unaffordable.

Unfortunately, related ministers haven’t been able to get to the root of the problem. Agriculture Minister Suswono blamed it on poor weather and failed harvests while Trade Minister Gita Wirjawan brushed aside the possibility of speculators or cartels hoarding stocks or jacking up prices for profit.

In an orchestrated move, Coordinating Minister for the Economy Hatta Rajasa ordered the opening of the import tap as a temporary means of reducing prices.

Part of the plan was to import 9,000 tons of chili from China and Vietnam. While this will help boost supplies, the move does not guarantee a price stabilization as the festive season of Idul Fitri nears.

In fact, the association of chili farmers has said that the policy will only benefit the importers without easing the suffering of local farmers.

Although chili farmers concede that harvests had slowed, they are optimistic the condition will only be temporary. They believed, had the government anticipated the situation earlier and provided subsidies to farmers, production and supply of chili could have been maintained.

Currently, most of the chili growers are concentrated in East Java’s Banyuwangi, Jember, Lumajang and Kediri. But they only have one quarter of a hectare of land each. Each hectare needs an investment of Rp 65 million and if they had been given the land and more credit assistance, the situation would have been different.

Meanwhile, although imported onions from Myanmar and the Philippines have flooded the market, prices continue to increase. Indonesians prefer to buy homegrown onions, which they say are better quality.

The association of traditional market traders also has complained that the government has failed to cope with the condition. The association has called on the government to be more selective in choosing the right kind of onions for import in order to suit the Indonesian taste. Most of all, members wish for an end to stockpiling practices by the speculators some blame for the shortage and climbing prices.

Such failed policies are seen in the beef industry — the recent influx of frozen beef from Australia did not help to lower prices. Traditional market sellers said customers didn’t want to buy frozen beef. They reasoned that traditional markets lacked cold storage facilities and this was why people prefer locally produced fresh beef. In Banjarnegara, West Java, the price of beef is still above Rp 90,000 a kilogram.

For years, the nation has been facing problems in agricultural productivity. This is due to the failure on the part of the government to base Indonesia’s agricultural policy on the realities of small-scale farmers.

Although officials have stated that agriculture should be the basis of successful economic productivity, that continues to be only jargon in practice. But now, the officials are feeling the pinch. They are in the hot seat.

Yanto Soegiarto is the managing editor of Globe Asia, a sister publication of the Jakarta Globe. The opinions expressed here are his own.