Milk import ratio continues

JAKARTA (JP): The government plans to continue applying an import-ratio policy of 1:2.4 for milk products for the first semester of this year.

A statement issued by the Ministry of Agriculture's Directorate General for Animal Husbandry said yesterday that based on the current policy, milk-processing companies are allowed to import the equivalent of 2.4 liters of fresh milk for every liter of fresh milk they buy from domestic farmers.

The import-ratio policy for milk products, which has been implemented since 1982, is meant to guarantee the distribution of fresh milk produced by domestic farms.

Under the ratio, milk-processing firms are allowed to import a certain amount of fresh milk after they have bought one unit of local fresh milk.

The ratio is reviewed every six months based on negotiations between milk-processing firms, the Federation of Indonesian Milk Cooperatives and the national coordinating team for milk distribution.

Last month, the Director General for Animal Husbandry, Erwin Soetirto, announced that the government plans to replace the import-ratio policy, which is a non-tariff barrier, with a tariff to conform with the rules of the World Trade Organization (WTO).

He did not mention when the change will take place.

The implementation of tariffs on milk imports is expected to help prepare the country's milk industry for free trade. The WTO stipulates that in the year 2005, tariff barriers for agricultural products will be removed. (pwn)