Farmers grouping renews call for higher import tariffs

Adianto P. Simamora, The Jakarta Post, Jakarta

Farmers' income had been slashed during the past year due to falling prices for agricultural commodities and soaring production costs, Indonesian Farmers Association (HKTI) chairman Siswono Yudohusodo said Thursday.

Speaking at a press conference, Siswono urged the government to take immediate steps, particularly by raising import tariffs on competing commodities.

He said the massive import of agricultural commodities had put pressure on the prices of local produce.

He warned that if the prices continued to be under pressure, farmers would be discouraged from continuing farming, thus threatening the country's food security.

"The government must immediately implement a pro-farm policy to raise the prices (of commodities) to improve farmers' earnings," Siswono said.

"One of the possible mechanisms is to impose higher import tariffs and curb illegal imports," he said.

HKTI has long called for higher import tariffs on commodities such as rice, soybean and sugar to protect local farmers from cheap imports.

The association has proposed import tariffs on rice be raised to Rp 900 per kilogram from the current Rp 430 per kilogram (equivalent to a tariff of 30 percent), soybean from the current zero percent to 60 percent and red onion from zero to 50 percent.

"It really needs political will from the government (to raise the tariffs). Many exporting countries want Indonesia to keep relying (for food) on their countries," Siswono said.

The World Bank has recently warned the government not to take protectionist measures in agricultural trade as such a move would only cause higher prices at home and would not necessarily improve farmers' welfare as most of them were net consumers of rice. The bank issued the warning in a report prepared for the recent international donors meeting.

Siswono said the Indonesian government had been under pressure from developed nations like the U.S. and Australia to keep the local market open to import agriculture products.

Indonesia imports 1.35 million tons of soybean every year from the United States. The country also imports sugar from Australia.

Rahmat Bajuri, a senior official of HKTI in West Java, said a typical rice farmer working 0.3 hectares of paddy could now only earn around Rp 300,000 (US$33.71) per harvest. Each farmer averaged about two harvests per year.

He failed to provide comparative figures for the previous years.

The government has increased the floor price of unhusked rice from Rp 1,519 per kilogram to Rp 1,725 in a bid to help improve farmers' income.

But experts say the policy would not benefit farmers at all because cheaper imported rice could easily enter the country.

The floor price is the reference price level used by the State Logistics Agency (Bulog) to purchase rice from farmers for reserve purposes.

Worse still, said Siswono, Bulog did not buy unhusked rice directly from the farmers.

"That is a fact, during the harvest season, farmers can only sell their produce to traders at lower levels as Bulog refuses to or has no money to buy it," he said.

The association said that farmers would stage a rally in Jakarta next month if the price of commodities continued to decline.

The price of rice was now around Rp 2,700 per kg, compared to Rp 2,723 last year. Although these price levels were still higher than Rp 2,076 in 1997, production costs had greatly increased, particularly fertilizers whose prices have soared to an average of Rp 1,200 per kg compared to Rp 500 per kg five years ago.