Food BUMDs’ Role Vital in Stabilizing Price

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The Jakarta city administration’s efforts to stabilize the prices and supply of food commodities is beginning to show results. Special attention must still be given to ensure the price stability of several commodities.

JAKARTA, KOMPAS — Maintained food stock in Jakarta is key to ensuring the stability of food prices and regional inflation. The capital’s regional inflation control team (TPID) and food-related region-owned enterprises (BUMD) have a central role in stabilizing the inflation rate.

Bank Indonesia (BI) Jakarta representative head Hamid Ponco Wibowo said stabilizing prices through BUMDs in the food sector had successfully kept inflation rate low in Jakarta.

“Jakarta’s BUMDs in the food sector possess the financial power and capability that those in other regions do not,” he said on Friday (26/4/2019).

Bank Indonesia, the Jakarta city administration, the Jakarta division of the State Logistics Agency (Bulog) and food sector BUMDs are in the TPID.

PT Food Station Tjipinang Jaya president director Arief Prasetyo Adi said on Thursday that rice stocks in the company’s warehouse and traders’ warehouses at the Cipinang central rice market exceeded demand in Jakarta, which is around 3,000 tons per day. This is to ensure a sufficient rice supply in the city.

Data as of April 25-27 shows that markets had between 41,000 tons and 42,000 tons of rice.

The Food Station has a monthly rice stock of around 8,000 tons, sourced from Karawang, Sumedang, Subang, Indramayu, Surakarta, Ngawi, Mojokerto, Sidoarjo, Lampung and Makassar. It also cooperates with state logistics firm Bulog in procuring rice.

Arief said that of the 8,000 tons of rice in stock, 2,000 tons are absorbed by traditional markets, beneficiaries of the Jakarta Smart Card (KJP) and the cheap food program. The rest is distributed in modern markets and online.

BUMDs also enjoy more latitude in making purchase contracts with rice centers on predetermined prices. For instance, the Food Station can purchase dried harvested unhusked rice (GKP) at between Rp 4,500 (US 31 cents) and Rp 5,000 per kilogram. Meanwhile, the government’s purchase price (HPP) of GKP at farm level is Rp 3,700 per kg, in line with Presidential Instruction No. 5/2015. The Food Station’s high purchase price is better for farmers, allowing them to sell their rice to the BUMD.

Eggs and other commodities

The Food Station also works with chicken farmers to ensure egg prices and supply in Jakarta. These farmers reside in Blitar, East Java; Kendal, Central Java; and Banten.

Similar to rice, egg purchase prices are also predetermined so that farmers enjoy better prices. At the same time, Jakarta can enjoy a supply of food ingredients in line with the expected quality.

Jakarta’s BUMDs have also expanded their supply. Sugar, for instance, is sourced from Lampung, Central Java and East Java. Milk is sourced from cattle farmers in West Java.

PD Dharma Jaya, a BUMD in beef and chicken procurement, works with cattle centers in East Nusa Tenggara (NTT) and buys beef from Australia.

PD Dharma Jaya president director Johan Romadhon said that Jakarta procures live local cattle from NTT in collaboration with local BUMDs.

“In late April, 300 cows will come from NTT,” he said.

Dharma Jaya also stabilizes prices through a cheap food program and inspections at traditional markets. If the market price is Rp 120,000 per kg, Dharma Jaya sells its beef at Rp 90,000 per kg.

Through the cheap food program, commodity prices at markets can be kept low. The cheap food is available for holders of KJP Plus cards, residents of low-cost apartments, disabled people, the elderly, employees with Jakarta ID cards and non-civil-servant teachers with a salary of 1.1 times the regional minimum wage (UMP) at most. Food prices for these groups are subsidized by the government and they can only purchase limited amount of items.

The Jakarta secretary’s assistant for economic affairs, Sri Haryati, said that BUMDs enjoyed latitude in procuring stocks, stabilizing prices and establishing business cooperation. BUMDs prioritize cooperation agreements with other regions.

“Other regions can prosper from such cooperation in the food sector. We push other regions to have similar agencies so that a business-to-business cooperation can be established,” Sri said.

Prone to fluctuations

Businesses remind the government to be wary of food price fluctuations.

“Food ingredients prone to fluctuations, such as eggs, chili pepper, onions and shallots, are sourced from outside Jakarta,” Indonesian Traditional Market Vendors Association (APPSI) deputy chair Sarman Simanjorang said on Sunday.

He added that he hoped the Agriculture Ministry and the Trade Ministry would ensure the supplies of these food ingredients.

Indonesian Retailers Association (Aprindo) deputy chair Tutum Rahanta said more attention should be given to procuring several food ingredients, such as rice, sugar and meat. Due to the complexities of existing problems, the TPID should expand its scope of service. Business players’ access to several places must be expanded and made easier.

Tutum pointed out that 70 percent of food ingredients circulated in traditional markets and the remaining 30 percent in modern markets.

“[The government must monitor] not only modern markets, as they do not reflect the general conditions of markets,” he said.

A narrow scope of monitoring may create a huge gap between statistical figures and real conditions.

Records of commodity prices in 32 markets as listed on Infopangan.jakarta.go.id show that food commodities’ prices are relatively stable. A daily price increase is seen in eggs, among other commodities. In Rawamangun Market on Sunday, for instance, the price of eggs was Rp 35,000 per kg, an increase of Rp 11,000 per kg from the previous day. (HLN/DVD/NDY)

Editor:

kompascetak