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Analysis: Bulog accused of collusion leading to high buffalo meat price
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Seller cuts beef at Cijantung market, Jakarta, Tuesday (6/4/2021). The Director General of Animal Husbandry and Animal Health of the Ministry of Agriculture said that 188,000 cows are ready to be slaughtered to meet the availability of beef supply for the period of April and May 2021. (JP/Yulianto Catur Nugroho)
T
he government opened up buffalo meat imports to provide a substitute for beef, the price of which has been rising, but the effort seems to have been undermined as the buffalo meat price has followed suit and risen as well. Alleged collusion between the State Logistics Agency (Bulog) and several distributors is said to be the reason behind the high buffalo meat price.
Idul Fitri, when demand for meat usually rises sharply, is in less than two months but the government has been struggling to keep the price of beef under control. The price of beef in the country has reached the Rp 100,000 (US$6.53) per kilogram, exceeding the Rp 90,000 per kg price limit set by the government.
To overcome the issue, the government opened buffalo meat imports, expecting that the market would accept the cheaper meat as a substitute. However, the price of imported buffalo meat has also risen to Rp 90,000 per kg, surpassing its normal price of Rp 80,000 per kg.
Distributors in the cold chain sector complain that Bulog sold the buffalo meat it had imported only to a small number of select distributors, such as Suri Nusantara Jaya (SNJ), while the rest of them were not permitted to purchase it directly from the state-owned enterprise (SOE).
They even claimed that all the other selected distributors were actually affiliates of SNJ. If their claims are proven right, then Bulog may have potentially violated Law No. 5/1999 by giving distribution rights to only one party, which leads to high prices.
Bulog president director Budi Waseso denied the accusation that Bulog gave special treatment to select distributors. He added that Bulog now mandated distributors to pay a deposit starting from 40 to 50 percent of the price up front to avoid losses incurred from distributors canceling their orders, which Bulog had repeatedly experienced. In return, Budi said firms that accused him of bias were firms that Bulog had blacklisted for failing to pay for their orders.
Another factor which contributed to high buffalo meat prices is the fact that Bulog bought its buffalo meat from India at a higher price per kg than other Southeast Asian countries. For example, Malaysia purchased buffalo meat from India in the past year at $2.89 per kg, while Indonesia bought it at $3.13 per kg. Budi claimed that the reason for Bulog’s higher purchase price was because the SOE bought only quality meat and no offal.
