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Jakarta Post

Feed millers group asks for govt help to get local corn

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Thu, August 20, 2015   /  04:03 pm

Following the government'€™s import ban on corn that has left corn-related industries scrambling for supplies, business groups under the Indonesian Feed Millers Association (GPMT) have met the Agriculture Ministry to seek a helping hand in sourcing corn from the country'€™s corn producing centers.

'€œWe have talked about [high] logistics costs and the efforts to tackle the problem [of getting local supplies of corn],'€ GPMT chairman Sudirman told The Jakarta Post after a meeting with officials from the Agriculture Ministry on Wednesday.

According to Sudirman, the government has committed to easing the industries'€™ access to local supplies and therefore helping them reduce logistics costs.

Agriculture Ministry secretary-general Hari Priyono said the ministry would set up a task force to better map out corn producing areas across the country and the nearest feed miller industries.

Hari said the task force would consist of high-ranking officials from relevant government institutions, including the Agriculture Ministry, State Logistics Agency (Bulog), the Trade Ministry and business players.

'€œWe will map out who will be in charge of corn production near feed millers'€™ plants, how much [corn] we can access,'€ Hari said.

According to Hari, the task force would be able to coordinate with other relevant ministries, like the Transportation Ministry, regarding the shipping of corn from remote areas to the millers'€™ plants.

The government has banned the importation of corn in order to maintain steady prices at an average of Rp 2,700 (20 US cents) per kilogram for farmers. The policy was implemented in accordance with the President Joko '€œJokowi'€ Widodo administration'€™s ambition to make Indonesia self-sufficient in key crops '€” including rice and sugarcane '€” in the next three years.

This year, the government expects to boost local corn production to 20.31 million tons, an increase of 4.1 percent from 19.5 million tons last year.

Even though the ministry claimed that national production was sufficient with exports hitting 400,000 tons of corn so far this year, the critics, including those from the GPMT, criticized that only 22 percent of national production was available to the industry every year.

To plug the shortage, the feed manufacturers previously relied on imported corn, primarily from Argentina and Brazil.

According to data from the Central Statistics Agency, GPMT members have imported 1.65 million tons of corn so far this year. Last year, they imported 3.1 million tons of corn.

As reported earlier last week, the industry group has been forced to pay an estimated Rp 20 billion demurrage cost for chartered vessels carrying 480,000 tons of imported corn stranded in Indonesian ports resulting from the ban.

In a related development, the Agriculture Ministry also plans to add 1 million hectares of corn fields and increase supplies of related equipment for corn farming and mills from the ministry'€™s budget of Rp 16.92 trillion (US$1.22 billion) from the revised 2015 state budget. (fsu)

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