Stabilization of Food Prices

KOMPAS/RIZA FATHONI

The Jakarta office of state logistics agency Bulog holds a Food Stabilization Movement event in Gondangdia, Central Jakarta, Friday (19/5). The stabilization movement sells foodstuffs such as rice, sugar, cooking oil, onion and garlic at low prices. The low-cost market is intended to ensure the availability of food and maintain price stability before the fasting month of Ramadhan.

The government has strived to stabilize prices ahead of the fasting month through the Food Stabilization Movement using a structured approach.

The efforts of the Trade Ministry, Agriculture Ministry and state logistics agency Bulog to handle the stability of food prices in a structured way need to be supported and anticipated thoroughly from upstream to downstream.

The increase in food prices ahead of the religious holidays according to the government is caused by the crooked practices of traders charging excessive prices. To prevent such practices, the government has set reference purchasing prices at the level of farmers and sales to consumers.

The human right to food is guaranteed by the 1945 Constitution. This right must be fulfilled, both in terms of quantity and quality, as stipulated in Law No. 18/2012 on food. Therefore, the government\'s approach is not sufficient only in production and distribution, but how the society accesses it.

Even though the level of prosperity of Indonesian society is improving over time, there are still 27.6 million people classified as poor. The expenditure on food of poor households is still 73 percent, so that maintaining the stability of food prices cannot be temporary.

The commodity approach to food self-sufficiency efforts now seems to be no longer suitable because it has not been successful at stabilizing prices, this approach has deployed all resources.

In reality the resources, among other things, land, are not always available.  The commodity approach also benefits consumers such as with the fuel subsidy. Meanwhile, farmers\' welfare does not improve, as is seen from the farmers\' terms of trade, which remain at 100.

On the other hand, the efforts to achieve prices that are affordable for consumers have also not been fully realized. Prices in the country can be more expensive than those in the world market because self-sufficiency prohibits imports.

A different approach,which needs considering, is the fulfillment  of community nutrition. In this way, food production is encouraged in line with the conditions in each region, from production to processing. The government facilitates farmers and agro-industry businessmen to grow by providing road and electricity infrastructure, telecommunication networks, people\'s and online markets, and credit.

Excess production can be traded among regions, if necessary overseas. If there is a shortage, supplies can be transported from other regions. What needs to be avoided is that the  trade balance does not become a deficit, farmers and consumers equally get reasonable prices.

The task of the government in the provision of food should be focused on the  groups of people who have difficulty in buying food when the commodities are released via the market mechanism.