Fri, 01 Feb 2008
From: The Jakarta Post
By Desy Nurhayati, The Jakarta Post, Jakarta
Businesspeople grouped in the Indonesian Chamber of Commerce and Industry (Kadin) called on the government to act to help stabilize the soaring prices of staple foods.

"We want the government to provide free fiscal, zero import tax and drop the value-added tax for staple foods," Kadin chairman M.S Hidayat said after meeting with the government at State Palace on Wednesday.

The meeting -- led by President Susilo Bambang Yudhoyono and Vice President Jusuf Kalla accompanied by economic ministers -- was held to respond to the staple foods' soaring prices and find joint solutions to stabilize the prices through coordination between the government and the business sector.

Hidayat said Kadin also suggested the government strengthen the role of the State Logistics Agency (Bulog) in improving the country's food resilience by keeping enough stocks for main commodities, including rice and soybeans.

"The government must be able to keep prices stable for farmers and ensure adequate supplies of seeds and fertilizer," he said.

He said businessmen and the government had agreed to set price targets for several commodities, including rice, cooking oil, sugar, soybeans and kerosene.

"But we have yet to determine the price target because there still be disparities among the prices targeted by the government and those determined by the business people."

Hidayat said Indonesia is expected to stop importing rice this year but will still likely import soybeans.

"Even though our soybean stocks are still sufficient, they are not able to fulfill the people's demands due to the rising price of soybeans," he said.

In response to the suggestions, especially on tax incentives, Coordinating Minister for the Economy Boediono said the government would "accommodate them", as long as they could bring the food prices back to normal.

"The government's policies to give more tax incentives and subsidy will not inflict a loss to the state budget."

He said the government would issue a package of policies to help stabilize prices in the near future.

He added problems in food supplies and prices recently occurred due to the increase of global prices, as well as distribution problems.



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