Indonesian poor passing on escalating beef prices

Thu, 05/08/2008 11:03 AM  |  City

Poor Indonesian consumers and meat traders are protesting about high meat prices while the government is freeing up lower cost meat imports, despite opposition from local producers.

"Our family only eats beef during Idul Fitri. We can't afford it more often because it is so expensive," Tangerang resident Siti Nurhalia said.

"We only eat chicken once a week but we can still buy it. Beef is impossible. Chicken cost us Rp 18,000/kg while beef costs Rp 50,000/kg," she said.

Her husband's income as a factory laborer in Tangerang is barely enough to support the family of four, she said. Because she looks after her baby, she can only supplement his income by taking in washing.

Ani, a mother from Purwokerto, said she knows beef is good for her children and hopes to provide it more often but just cannot afford it more than once a week.

"If the beef price was half, then I would cook it every day," she said.

Indonesia's beef consumption per capita is a mere 1.7 kg/person, around 4 percent of Brazil's and one-third of China's.

With inflation reaching 8 percent in March, purchasing power is down. In February meat sellers in Jakarta protested rising prices as sales plummeted.

Cases of malnutrition are appearing in many provinces and 44 million Indonesians fall below the poverty line, an 8-year high, according to Indonesia's Central Statistics Agency.

High prices also make it harder for the meat industry to compete with foreign products, especially as the ASEAN free trade zone comes into operation.

Haniwar Syarif, the chairman of National Meat Processor Association (NAMPA), said that in the long run, the meat processing industry would be forced to close down or move to lower cost countries if Indonesian prices keep escalating.

"We increasingly import from Australia and New Zealand, and we need alternatives," he told The Jakarta Post.

"If Malaysia, Thailand and the Philippines use lower cost meat by importing it (from countries like Brazil and India) for meat processing while I have to use expensive meat, my cost is higher. When the ASEAN free trade area is implemented, imports of cheap processed meat will enter Indonesia."

"If that's the case, our industry will die." he said, underlining that beef prices in Malaysia are less than half of Indonesia's.

As reported in this newspaper in February, chairman of the Indonesian Food and Beverages Association, Thomas Dharmawan, said that rising prices were likely because of shortages in Australia due to prolonged drought. Since then, rain has started falling and the outlook is more hopeful.

So far, Indonesia has been importing mainly from two countries - Australia and New Zealand - after the foot-and-mouth disease incident in 2001.

Local beef production, mostly produced traditionally, is unable to fulfill consumer demand or quality requirements of the meat processing industry, hence the importing of around one-third of national needs.

Minister of agriculture Anton Apriyantono has opened up the market to more competition. The United States and Canada are allowed to sell their beef to Indonesia. Negotiations with Brazil and Uruguay are underway. There was also an offer from Indonesia's maritime neighbor India, which is already supplying beef to Malaysia and the Philippines.

The move will revise the previously country-based import regulation to bring in a zone-based system approved by the World Organization for Animal Health but contested by Indonesian animal experts who are concerned with preserving safety standards.

NAMPA Chairman Haniwar questions the opposition to freeing up imports."If we only buy from the disease-free zone and if the price is affordable, why not? These countries are already exporters and OIE thinks the zone system is safe," Haniwar said. (JP/Mariani Dewi)

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