Yogyakarta- Due to price increase of domestic and world’s food, the Government has made exemption of import duty policy for 57 tariff posts of food commodity, cattle feed and fertilizer for one year. This policy corrected previous policy which determined the 5% minimal tariff of 2,165 posts. According to Head of Center for World Trade Studies (PSPD), Prof. Dr. Ir. Masyhuri, the policy reflects more of the Government’s panic stance on social, economic and politic unrest. “The high price of food will trigger inflation and reduce real income of non-farming community. However, for food-producer farmers, the food price increase will improve their income,” Masyhuri explained in discussion at the Center's office at UGM, Thursday (27/1).
Masyhuri added that if the policy only aims to decrease the price, the decrease of tariff down to zero will reduce the rate of price increase. However, the tariff decrease will not protect farmers. The farmers who are already poor do not have the chance to improve their income. The expensive agricultural food product is actually the momentum to improve their income. However, this momentum is neglected by the Government,” he explained.
Tariff decrease in rice, soybean, corn, sugar and other agricultural products will enhance import of the products and decrease the price of those products in international price. This will make farmer’s income stagnant, if world’s price does not increase, it will lower the price of products and reduce the farmer’s income. On the other hand, farmers have waited for the increasing price of agricultural products. “Why does the Government not care of farmers?”
Besides, wheat commodity which is not domestically produced should not be freed, because it will trigger bigger dependence on imported wheat. Cheap price of wheat will increase the demand on domestic wheat and increase import of wheat which reaches by 100%. “It will benefit foreign wheat farmers, wheat importers, and wheat industries. Wheat price should be equally expensive or let it be expensive to make food industries and consumers not depend much on food from wheat,” this lecturer of Agribusiness Department, Faculty of Agriculture, explained.
Although being liked by farmers, expensive price of food will burden consumers. According to Masyhuri, the government’s policy should reduce small consumer’s burden without sacrificing farmers. A policy which is pro-farmers and small consumers should be made by the Government. Not all consumers should be protected, only the poor ones should be, while upper-middle consumers should not receive protection, let alone by sacrificing farmers.
On the occasion, Masyhuri proposed some policy which can be made by the Government. First is tariff on agricultural products is still prevailing. This policy not only protects farmers but also collects funds to strengthen agricultural sector. Second is good food stock management from household level, farmer groups, up to national and regional level.
“For short term, this can be done by helping small consumers through market operation for poor people or improved rice for the poor, etc,” he ended his explanation.