A chili seller tends her goods at Beringharjo Market in Yogyakarta on Wednesday (21/6). Ahead of the Idul Fitri celebration, the price of chilies rose from about Rp 15,000 to Rp 25,000 per kilogram. The price increase this year was not as high as before Idul Fitri in previous years.
There is something different this year. The phenomenon of fluctuating/spiking food prices, a typical and constant scourge every Ramadhan and Lebaran, is not so noticeable this year.
Compared to previous years, food prices during this year’s Ramadhan fasting month ahead of Lebaran are relatively more controlled. There have been no excessive price fluctuations. If there has, the commotion has been managed quickly.
The prices of several basic commodities have even declined, so that the consumer price index to the third week of June led to deflation. The Ramadhan inflation this time around could be the lowest in the last several years. This allows society to be able to more peacefully pass the Ramadhan and Lebaran holiday season this year.
Learning from the bad experience of the previous price fluctuations, the government has apparently worked harder and more seriously in price control this time. From preparing stocks of food commodities long before Ramadhan to intensifying the implementation of market/cheap groceries market operations, and to involving various components of the government, all have been carried out in their efforts to stabilize prices.
Several policy breakthroughs were also made, including fixing reference prices to better ensure the availability, stability and certainty of food prices, at the levels of both farmers and consumers. The types of food with fixed reference prices were expanded. The implementation of price limits was also widened to cover not only modern retail outlets, but also traditional markets. Even though the average prices of goods with fixed reference prices were still higher in the field, at least the deviance was not as wild as in previous years.
The synergy and coordination of the central government with state-owned enterprises and local administrations were also more closely aligned. On several occasions, security apparatuses were even involved to participate in safeguarding the stability of market prices. For inflation control, Bank Indonesia (BI) and the government launched a public information service on daily commodity prices, the Strategic Food Prices Information System, covering 10 important food commodities that had contributed 50 percent inflation so far.
In the future, other breakthroughs in price stabilization, especially during special periods such as religious holidays, need to continue to be made. This should include synergy with the private sector by intensifying the Regional Inflation Control Team, and cracking down on speculators. A special law to control food prices, as suggested by the BI Governor to prevent producers and traders from raising prices at will, should also be considered.
The next steps must touch the upstream food problems and food security pillars, ranging from production, to stock strengthening, and to smooth distribution. Therefore, the classical problems of price fluctuations, whether due to a jump in demand or disruption to supply, can be addressed.
On a macro scale, the Lebaran momentum is an important instrument to move the economy and equity. The Rp 200 trillion cash fund provided by BI for the economy should be directed to better drive the regional/national economy as a whole.
