Elections may cause price hikes: Association

Urip Hudiono and Abdul Khalik, The Jakarta Post, Jakarta

The Indonesian Food and Beverages Association (GAPMI) has warned the government that rallies during the current campaign period for parties contesting the general election could disrupt the distribution of basic food items in the country and hike their prices.

However, a farmers association dismissed the fear saying that rather than increasing, the falling prices of several food products would continue to decline.

GAPMI urged the government, particularly the office of the Coordinating Minister for the Economy, the Ministry of Finance and the Ministry of Industry and Trade, to launch a concerted effort with other related ministries to anticipate such a possibility.

"The government must ensure that distribution trucks are not reluctant to pass through their usual routes, by among other methods, scheduling them so that they do not run into any campaign rallies," said GAPMI's chairman Thomas Darmawan on Thursday after a morning discussion between the Indonesian Chamber of Commerce and Industry (Kadin) and the office of the State Minister of the Environment.

Thomas, who is also the head of the chamber's committee for product development and marketing, further suggested that the government immediately prepare alternative distribution routes in case the usual routes were congested due to rallies.

"The government should effectively utilize all existing railways and seaports for that purpose," he said.

And though price hikes of 5 percent to 10 percent were probably still tolerable, Thomas said, hikes of more than 25 percent, particularly in the price of rice and grains, would obviously raise concern. He said that, in that case, prompt market intervention would be required from the government.

However, Siswono Yudhohusodo, the chairman of the Indonesian Farmers Association (HKTI) downplayed the warning, arguing that the prices of many products were now falling due to successful harvests and abundant supply, and the trend would continue in the coming days.

"Products from farmers, such as rice, are now very cheap because of an overstock due to the recent harvest. Other product's prices, such as those of chicken and meat, are also declining because of oversupply.

"So, there is no reason to worry about increasing prices during the elections," said Siswono.

Director of Agroindustry at the Ministry of Industry and Trade M Yamin Rahman also dismissed GAPMI's worries, saying that the ministry had long prepared measures to ensure food distribution was not disturbed during the campaign period.