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More conflicting signals on Indo quotas

Beef Central, 29/08/2013

More conflicting signals regarding future management of cattle and beef import quotas have emerged from Indonesia this week, with the country’s trade minister again raising  suggestions the Government plans to replace import quotas with a price-based system from next year.

As reported by Beef Central in July, trade minister Gita Wirjawan has previously flagged the Government’s intention to replace the current system of import quotas with a new system that will trigger imports only when the local price for beef rises 15 percent above a “parity” or benchmark price.

Essentially, the policy would mean that meat and live cattle imports would be allowed only when domestic beef prices increased by more than 15 percent from the parity price.

Despite his recent public statements on the issue, there has been no official confirmation from the Indonesian Government about wether the new policy will be adopted. 

Mr Wirjaran has reiterated his support for the policy again this week, and has told the Jakarta Post he expects new regulations to be adopted next week.

The Indonesian Trade Ministry’s director general, Bachrul Chairi, also told the Jakarta Post that changing from a quota system to a price-based system would be more effective as it ‘would balance the interests of local breeders and consumers’.

“When the price doesn’t go down, we will import. But the reference price takes into consideration the interests of breeders, consumers and their purchasing power. We’ve found that the figure, in our estimate, can accommodate all interests,” Bachrul told reporters.

Bachrul said that the parity price was likely to be reviewed every quarter.

The article said the ministry also plans to add an additional import quota of 6000 tons of frozen beef and 60,000 head of live cattle to existing quotas for this year, but at this point there has been no official confirmation to importers or exporters of those plans.

The same article also highlighted ongoing efforts by Indoneisan farmers to convince the Government to wind back imports in support of local production.

Indonesian Cattle and Buffalo Breeders Association chairman Teguh Boediyana said that the government’s moves to deflate beef prices were carried out while ignoring farmers, who had suffered from the fluctuating prices.

Teguh cited how breeders often had to buy cattle at certain rate only to have the cows being sold at a much lower price.

“If the government is willing to keep up with its commitment to attain self-sufficiency, what it should do is impose import tariffs to both regulate trade and to maintain competitive prices for farmers,” Teguh said in a conference.

The government had set a target to be self sufficient in beef by 2014. The government, however, has continued to raise the beef import quota outside its annual quota due to scarcity and soaring prices, with production estimated to decline.

Teguh said that the government would fail to achieve the target if it continued to increase imports.


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