Food producers more concerned about levies and bribes: GAPMI
Food producers more concerned about levies and bribes: GAPMI
Adianto P. Simamora, The Jakarta Post, Jakarta
Local food producers have voiced concerns over the numerous
levies in the regions and rampant extortion by government
officials, which they say have increased their production costs
and will leave them unable to compete with imported food products
in the upcoming ASEAN free market era.
Thomas Darmawan, chairman of the Indonesian Food and Beverages
Association (GAPMI), said that in anticipation of the
implementation of the ASEAN Free Trade Area (AFTA), local food
producers were mostly concerned about the levies and extortion,
rather than the low duties that would be imposed on imported food
products.
"As far as import duties are concerned, we have long been
prepared for AFTA. Only 13 percent of food products still have an
import duty of more than five percent, while the remaining 87
percent have had an import duty of less than five percent since
January 1998.
"What we are more concerned about are the numerous levies
imposed by regional administrations and the bribes that we have
to pay to secure our business," Thomas told The Jakarta Post on
Friday.
Under the AFTA agreement, the six founding members of the
Association of Southeast Asian Nations (ASEAN) -- Indonesia,
Singapore, Malaysia, Thailand, the Philippines and Brunei
Darussalam -- have to reduce their import duties on food products
to between zero and five percent.
The new ASEAN member countries of Vietnam, Laos, Cambodia and
Myanmar, meanwhile, have until between 2006 to 2010 to open up
their markets.
Thomas said local food producers had been familiar for a long
time with levies imposed by the regional administrations and
bribery practices.
But the number of regional levies and the amount of bribes
demanded by government officials have been on the rise since the
implementation of the autonomy law.
"Don't be surprised when, for instance, in Jakarta a kilogram
of oranges from Medan is more expensive than those imported from
other countries," he said.
He said traders who wanted to ship their oranges from Medan to
Jakarta could spend huge amounts of money on levies and bribes to
ensure the fruit arrived safely in Jakarta.
"Along the route from Medan to Jakarta, one truck could pass
at least 14 weighing stations that each demand a levy of Rp
20.000, and 28 subdistrict stations that each demand a levy of Rp
5000," he said.
Aside from these "legal payments", Thomas said, the truck
drivers also had to pay bribes to various groups of people along
the route to Jakarta in order to avoid trouble.
He refused to identify these groups, but industry sources said
they were police and thugs.
"We have been burdened by high transportation costs and this
makes it difficult to reduce the price of our food products," he
said.
Tony J. Kristianto, secretary general of the Agri-business
Club, also voiced concerns over the situation, saying it would
reduce local companies' competitiveness.
"The government should coordinate with local food industries
to remove these non-tariff barriers and make them competitive in
the AFTA era," he told The Post.
According to the association's data, there were 916,184 food
producers with a total of 3.15 million employees in 2000.
Indonesia exported US$955 million worth of processed food
products last year.