Reforms not seen hurting dairy producers<\/p>\n
JAKARTA (JP): The government's recent decision to liberalize
\nthe import of dairy products will not pose a major problem to
\nlocal producers, a senior official said.<\/p>\n
Director General of Animal Husbandry Erwin Soetirto said
\nSaturday local dairy products would still be able to compete with
\nimported ones.<\/p>\n
The rupiah's sharp fall against the U.S. dollar would make
\nimported dairy products too expensive for most local customers,
\nhe said.<\/p>\n
\"Local milk and milk-related product factories will prefer to
\nuse local dairy products because the price of imported products
\nwill be higher than before,\" Erwin said.<\/p>\n
The liberalization of the import of dairy products is part of
\neconomic measures announced by President Soeharto recently to
\nsupport the US$43 billion bailout package arranged by the
\nInternational Monetary Fund.<\/p>\n
But analysts said the government's decision to liberalize the
\nimport of dairy products would pose a major blow to weak local
\nproducers, as local processed milk and milk-related producers
\nwould still prefer to use imported dairy products.<\/p>\n
According to the previous regulation, the ratio of imported
\ndairy products and locally made products should be 1:2, meaning
\nthat dairy producing companies were allowed only to import one
\nliter of milk, if they used two liters of locally made milk.<\/p>\n
The old regulation was issued because local milk and milk-
\nrelated factories choose to use imported dairy products as their
\nraw materials due to its better quality compared to local
\nproducts.<\/p>\n
Erwin acknowledged that without the sharp depreciation of the
\nrupiah, the price of locally made dairy products would still be
\nhigher compared to imported products, due to its high production
\ncosts as a result of using imported feedmeal.<\/p>\n
But he said that in the current situation, where the rupiah
\nhas lost more than 75 percent of its value against the U.S.
\ndollar, local dairy products were more competitive than imported
\nones.<\/p>\n
He said that Indonesia's production of dairy milk last year
\nreached 400,000 tons, of which 350,000 tons was absorbed by local
\nmilk processing industries and the remaining 50,000 tons directly
\nconsumed by households.<\/p>\n
The local demand for dairy products reached more than one
\nmillion tons last year, most of which was provided by foreign
\nproducers. (gis)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/reforms-not-seen-hurting-dairy-producers-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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