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INDONESIA REMAINS TO RELY ON IMPORT IN DEALING WITH FOOD CRISIS WHILE EUROPE IS PLANNING ITO “GROW MORE”

Indonesian Minister of Agriculture, Syahrul Yasin Limpo announced that imports were necessary to fulfill domestic food needs. This was made known at a work meeting on 22nd March 2022 between the Ministry of Agriculture and Commission IV of the Indonesian House of Representatives, a commission whose scope is in the fields of Agriculture, Environment and Forestry, and Marine Affairs. According to the Ministry of Agriculture, Indonesia’s soybean stock is in deficit, and it is estimated that 2.842.226 tons of soybeans must be imported to fulfill the domestic soybean needs.

Soybeans was not the only commodity in question. The Minister of Agriculture also projects that 366.900 tons of garlic, 234.692 tons of sugar, and 134.356 tons of beef will be necessary. In addition, soybean is the commodity that requires the most imports. The Ministry of Agriculture stated that Indonesia’ dependence on soybean imports had lasted for 12 years. The unfavorable price structure for soybean farmers is weakening the domestic soybean production, whereas imported soybean price is sold at around IDR5.000/kg while domestic soybean farmers could not cover the cost of production at a price below IDR7.000/kg.

The Russian invasion against Ukraine (the largest wheat producers) forced the European Union to take a stand and decide to ramp up production of its own wheat to mitigate the food crisis. After two years of trying to persuade EU government to heave their agricultural system onto a greener track, the European Commission has allowed countries to lift some environmental rules to free up land for food production. This affects the Green Deal that has been agreed upon by EU countries on 12th December 2019, one of which is requiring 4 million hectares of agricultural land to be left fallow for biodiversity. Farmers are now able to plant whatever food and animal feed crops on that land. Aside from wheat, the Russian-Ukrainian conflict has also made EU realize how dependent they are on Ukraine’s corn exports for animal feed and fertilizers from Russia and Belarus.

Therefore, EU countries are encouraged to become self-sufficient and begin to reduce the need for imports. The EU is also providing direct aid to EU farmers totaling €500.000.000 to tackle the rising costs of fuel and fertilizers needed for agriculture. In addition, EU also plans to finance Poland who is to provide 50.000 tons of fuel across the border to Ukrainian tractors to meet their weekly fuel needs. TWK/DBS