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Batam weakened by heavy dependence on food from outside
Given its precarious food security, the government's decision to establish Batam as a Special Economic Zone is myopic, says one expert
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Given its precarious food security, the government's decision to establish Batam as a Special Economic Zone is myopic, says one expert.
According to Chaikal Nuryakin, a lecturer and researcher at the University of Indonesia's school of economics, the government should have first secured Batam's food resilience before developing the industrial sector. The island depends too much on supplies from outside, he says.
"Before setting up special economic zones, the government must ensure an area is prepared to meet the need for basic necessities like rice and cooking oil, so there won't be problems with bottlenecks in the supply chain later on, which could lead to unpredictable and fluctuating commodity prices," said Chaikal.
He added that President Susilo Bambang Yudhoyono had been too hasty establishing Batam as a special economic zone, considering the crucial importance of the food supply issue, said Chaikal at a recent forum on distribution mechanisms of basic necessities and strategic commodities in a free trade zone, attended by large-scale distributors in Batam.
He cited Batam's dependence on rice suppliers in Jakarta, which could prove problematic in the future given the unpredictability of transportation, which raises the risk of food scarcity.
"The government has banned rice imports from Singapore and Malaysia, its nearest neighbors, whereas, in fact, the demands of an industrial zone should be met by the nearest surrounding area," said Chaikal.
Although Chaikal admits that this solution is also problematic. If Batam is allowed to import food stuffs from Singapore or Malaysia and these imports leak to other areas of the country, it could affect domestic producers.
"The government should have fully ensured food resilience in Batam because the area has been proposed as an economic zone. If they fail in doing this a free trade zone would be difficult to maintain," said Chaikal.
Based on data from the Batam State Logistics Agency (Bulog), Batam can supply just 600 tons of the 7,500 tons of rice consumed by its residents monthly; the other 6,900 tons comes from distributors in Jakarta.
Munir Abdul Syukur, head of Bulog, said his agency could only supply limited rice stocks, adding that capacity for rice at Bulog's warehouse was just 2,000 tons.
"Illegal rice imports from neighboring countries are prevalent, but the volume is very small and steady supplies cannot be relied on. Its price is also relatively high because it is of premium quality," said Munir.
Batam depends greatly on other areas in Sumatra and Java for the supply of other food stuffs including flour, cooking oil, eggs and vegetables.
For example, Bantam's supply of chilies, potatoes and onions come from Medan, North Sumatra and are shipped by freighters that are hostage to weather conditions.
Adding to the problems, an over dependence on supplies from outside Bantam has created a monopoly on the supply of some food stuffs. This could lead to price manipulation by distributors and cause prices to rise artificially.
Dahlun Harahap, a fishmonger at the Aviari market in Batam, said Batam still depended on Jambi and Riau for its supplies of fish, prawns, crabs and other marine products, even though Batam is known for its sea food.
"The prawns that I sell come from Kuala Tungkal in Jambi. Shipments don't arrive on a daily basis, but right now its enough to cover the demand here," Dahlun said.
According to Dahlun, fish breeding centers around Batam prefer to meet Malaysia and Singapore's export demands rather than supply the local market, as larger profits can be made this way.
Batam municipal council's Commission II speaker Bastoni Solihin is of the opinion that the Batam municipality should work together with the Special Economic Zone Council to seek a solution to Batam's over dependence on food stuffs from outside the area.
"The soil condition in Batam is unsuitable for rice growing, but a variety of vegetables could be grown here. The provincial administration should immediately spur growth in the agricultural sector in areas surrounding Batam," Bastoni said.
Riau Islands provincial administration's head of economics bureau Tagor Napitupulu said it was difficult for his office to get data on the volume of the nine basic necessities traded by distributors each month.
"Distributors who trade it rice, sugar and cooking oil are reluctant to disclose their transactions, which we intend to use only to determine Batam residents' food consumption. It is hard for us to build food resilience in a special economic zone because there is no real data on the transaction of food stuffs," Tagor said.
