Import rule changes, local business worried

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Local horticulture stakeholders have questioned changes made in the Trade Ministry rule regarding horticultural imports, saying that the revision could have a negative impact on local producers and consumers.

The Trade Ministry regulation, issued Sept. 21, eases requirements for imports of fruit and vegetables, changes include the elimination of import quota and the conditional provision of cold storage for certain products.

Chairwoman of the Indonesian Chamber of Commerce and Industry’s (Kadin) agricultural market development committee, Karen Tambayong, said recently that an import quota would be necessary to clearly define the allocation for direct consumption and industry.

“Our local industry still needs imported goods, but we cannot let imported products flood our market because it will severely hurt local producers,” she told The Jakarta Post.

Karen also questioned the requirement regarding the provision of cold storage that only applies to certain food commodities, because the facility was vital in maintaining the quality of imported products.

“If they fail to provide adequate facilities, importers are unable to ensure the safety of products,” she said.

The revised rule, which became effective on Sept. 28, does not set an import quota because that is included in import recommendations issued by the Agriculture Ministry, which assesses the necessity based on the domestic supply, Trade Ministry’s director-general for foreign trade Deddy Saleh said.

Deddy also said that the provision of cold storage would only be applied to perishable products to accommodate the interest of importers.

The Indonesian Retailers Association (Aprindo) deputy secretary-general Satria Hamid also questioned the revised rule, saying that the simplified procedures did not help retailers as some basic issues had still not been addressed.

“The regulation does not clearly state whether Indonesian labeling should be placed on boxes containing fruits and vegetables, or on each item,” he said.

In addition, the ruling was also hazy over details regarding whether retailers, who previously were able to import horticulture products directly, should hand over distribution permits to other distributors, as had been demanded by the government, he said.

Under the trade minister’s regulation, retailers should source products from at least three local distributors instead of importing directly.

Hamid also said that so far, out of importers who had already obtained permits from the Trade Ministry, none had received import recommendations from the Agriculture Ministry, this sparked fears among retailers about a possible supply shortage after the rule became effective last week.

Based on the results of its verification process, the Trade Ministry approved importer licenses for 69 firms and rejected 36 firms. As of this week, the ministry was still processing permits for two other firms and would verify an additional four others.

Recently, global consulting firm McKinsey & Company said the Indonesian government should focus on boosting the productivity of the agriculture and fisheries sector to sustain its robust economic growth.

According to the firm’s report entitled The Archipelago Economy: Unleashing Indonesia’s Potential, released in September, the increase in the Indonesian middle class means more mouths to feed.

The prominent consulting firm predicted that business opportunities in the agriculture and fisheries sector in the country would top US$450 billion by 2030.