Elections may cause price hikes: Association

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.