High food prices lead to 'chickens dying in a rice barn': The Jakarta Post columnist

People buy food at a food market in Jakarta.
People buy food at a food market in Jakarta.PHOTO: REUTERS

JAKARTA (THE JAKARTA POST/ASIA NEWS NETWORK) - We Indonesians pride ourselves on being a nation of plenty.

From elementary to high school, our textbooks depict how wondrously beautiful, lush and fertile our nation is. It is obviously a source of national pride. The Javanese have a saying for it: gemah ripah loh jinawi.

Unfortunately, this saying is fraught with ironies, manifested in Indonesia's ills as a nation. Unemployment forces 6.5 million people - 85 per cent of whom are women - to work abroad. There is an ever-widening income disparity. The wealthiest 1 per cent of the population comprise nearly half of total national wealth while over 28 million people, almost 11 per cent of the population, live below the poverty line.

Last but not least, there are high food prices.

So why are food prices in Indonesia so high, especially compared with neighbouring countries?

The Center for Indonesian Policy Studies (CIPS) publishes a monthly household index, the Indeks Bulanan Rumah Tangga (Indeks Bu RT), comparing the prices of basic commodities in middle and high income neighbouring countries.

According to the June index, shallots at 42,000 rupiah (S$4.29) are more expensive in Indonesia than in New Zealand (S$3.93), Australia (S$2.06), Singapore (S$1.87), the Philippines (S$1.84), Thailand (S$1.16), Malaysia (S$0.31) and India (S$0.26).

I was in Malaysia recently. I should have filled my suitcase with a ton of shallots and sold them in Indonesia. It is almost 14 times more expensive here - I would have made a killing.

Even the price of rice is higher than in Singapore, India, Malaysia and Thailand. In Indonesia, the Indeks Bu RT puts it at 11,000 rupiah while in Thailand, it stands at 5,398 rupiah.

CIPS calculated that because of these high prices, Indonesian households spend 564,500 rupiah more per month on some sembako (excluding kerosene, LPG, liquefied pretroleum gas and some other items) than their counterparts in neighbouring countries.

Sembako is the abbreviation of sembilan bahan pokok (nine basic commodities): rice, sago and corn; sugar; vegetables and fruit; beef, chicken and fish; cooking oil and margarine; milk; eggs; kerosene or LPG; and iodised salt.

The reasons for these high prices are incredibly complex: the length of the distribution chain, the role of the middlemen, the existence of food cartels, the proliferation of illegal levies, patterns of planting and harvesting, smuggling, a national agricultural policy that does not favour farmers, weather conditions, pests, declining availability of arable agricultural land due to conversion (for example, for industrial purposes) and a decline in the number of farmers.

Between 2003 and 2013, around five million farmers changed professions because of low earnings. Shallots, for example, cost 42,000 rupiah but the farmers get a fraction of this.

In 2017, there was a time when they only received 2,000 rupiah for 1kg of onions. This is certainly a reason to cry - and not because the farmers were chopping the onions.

Winarno Tohir, head of Kontak Tani Nelayan Andalan (National Outstanding Farmers and Fishermen Association), estimated in 2016 that, in 12 years, Indonesia would lose 14 million farmers. Well, if they keep getting the raw end of the deal, why would they want to commit to a profession that gives them insufficient returns to living a decent life?

About 80 per cent of Indonesians eat rice as a staple. Obviously, the ratio between earnings and expenditure on rice differs widely. With the high rice price, low-income groups could be spending a major part of their earnings on rice alone.

How do you reduce prices? Well, by increasing supply to meet demand. If you cannot increase the supply by producing it yourself, then get it elsewhere. Rice, for example, produced in Indonesia costs around two and a half times more (4,079 rupiah per kilogram) compared with Thailand (1,619 rupiah per kg).

Food is a political and populist issue and it is related to national pride.

The government has not been entirely successful in the measures it has introduced to attain food self-sufficiency. The last time Indonesia enjoyed rice self-sufficiency was in 1984. Then President Soeharto delivered a speech announcing the achievement at the 40th anniversary of the Food and Agriculture Organisation (FAO) in Rome.

But, up to now, we have not returned to such a state because of insurmountable obstacles. So at what price do we want to attain it again?

The team at CIPS is of the opinion that Indonesia should engage in food trade liberalisation to provide sufficient food to the people, thus allowing for the engagement in more productive activities.

It is like me trying to make my own gado-gado (mixed cooked vegetables with peanut sauce) - one of my favourite dishes. I love to cook, but this one dish I usually buy at Mang Budy's, my local gado-gado vendor who sells it from his wooden push-cart. It costs a mere 10,000 rupiah.

If I made it from scratch, it would take me hours just to produce one dish, which would not even taste as good as Mang Budy's. Imagine the opportunity cost for my creative time as a writer if I spent two to three hours making gado-gado for myself. What a waste.

CIPS' proposal for food trade liberalisation would go against the grain of our national food self-sufficiency pride, but it is worth looking into.

Lucky for us, CIPS is offering a massive open online course (MOOC) on food trade from July 26 to Sept. 26. This will enable us to understand the issues in a rational way. The topics discussed will include agriculture in Indonesia, regional value chains, the political-economy of agriculture in Indonesia and domestic consumption.

The course is intended for laypersons, whether students, policymakers or business people - in short, anyone without a background in economics, trade or agriculture, interested in the issue of food trade. That would include me. I'm in, especially since the course takes only two hours a week and can be downloaded on your device for free.

We have another saying in Indonesia that is the opposite of gemah ripah loh jinawi: seperti ayam mati di lumbung padi (like chickens dying in a rice barn).

This speaks to the fate of too many poor people, including farmers, in Indonesia.

Let us gain more knowledge and become wiser so that we can at least get closer to the state of gemah ripah loh jinawi and not end up like hungry chickens when, in fact, resources abound.