Indonesians feel heat of chilli price spike, blame Jokowi's policies

SUKABUMI (Indonesia) • Even at the best of times, poor infrastructure makes it hard to keep food prices stable in Indonesia, but the rural poor are increasingly pinning the blame for wild price swings on the policies and unmet promises of President Joko Widodo.

South-east Asia's largest economy is now growing at its slowest pace in six years, and half of its population of 250 million live on less than US$2 (S$2.80) a day, so price spikes for items such as rice, sugar, beef and chilli can be devastating.

"Farming is like gambling, because we never know the price," said 32-year-old Rahmat, who farms chillies on the foothills surrounding Mount Salak in West Java, about 115km south of the country's capital of Jakarta.

Fresh red chillies are almost a must-have on Indonesian dinner tables, but over the past 12 months, chilli prices have swung between 20,000 rupiah (S$2) and 80,000 rupiah a kg, even though Mr Rahmat says that his production costs have remained at just 10,000 rupiah a kg.

How produce travels from farm to table in Indonesia helps explain the volatility. On their journey to Jakarta, Mr Rahmat's chillies are carried on motorcycles and loaded onto unrefrigerated flatbed trucks before being bought and sold by as many as six traders.

By the time they reach their destination, about 15 per cent of chillies have gone bad or are too dry for local tastes, said Mr Dadi Sudiana, who chairs the Association of Indonesian Chilli Agribusiness.

Overall, nearly 40 per cent of fresh fruit and vegetables get spoilt, based on industry estimates.

Mr Joko, widely known as Jokowi, took office in October last year, vowing to solve such problems with a massive infrastructure push. So far, his administration has failed to spend the US$22 billion budgeted for such projects this year because of poor coordination between ministries.

His approval rating has slumped, falling from 72 per cent to just 41 per cent last month. He promised to improve infrastructure with more dams, better irrigation systems and easier access to credit.

"When the rainy season comes, we plant chillies, but when the dry season comes, we have no other option than to reduce our plants," said Mr Dadi.

Agriculture Minister Amran Sulaiman said 2 trillion rupiah had been allocated for this year to carry out dam building in dry areas and the work was ongoing.

The government is turning to state food buyer Bulog to limit price increases - buying from farmers and selling below market price, instead of going for ad hoc imports.

"Red chilli production is sufficient to cover household demand, which is 400,000 tonnes," national statistics bureau chief Suryamin told reporters last month.

"But there is demand from industries, for instance, for chilli sauces. Thus, in total, we are still in deficit."


A version of this article appeared in the print edition of The Straits Times on August 21, 2015, with the headline 'Indonesians feel heat of chilli price spike, blame Jokowi's policies'. Print Edition | Subscribe