economy

It Is Essential To Make Serious Efforts To Reduce Dependence On Agricultural Imports

The government is deemed to need to undertake serious efforts to reduce its dependence on vital agricultural commodity imports, including soybeans and milk from the United States (US).

This statement was made by Eliza Mardian, a researcher from the Centre of Reform on Economics (CORE), when contacted by ANTARA in Jakarta on Friday, in response to the new trade agreement between Indonesia and the US.

Indonesia has agreed to purchase US agricultural products worth 4.5 billion US dollars as part of a 19 percent tariff agreement imposed by the US on Indonesia. Meanwhile, US products will enter Indonesia tariff-free or at zero percent.

Eliza cited that for corn commodities, Indonesia is actually in surplus; however, imports continue to be made, particularly for livestock feed needs.

The majority of farmers are located on the island of Java, while the primary centers for corn are predominantly outside of Java. Due to relatively high domestic logistics costs, the price of domestic corn is not competitive compared to imports," she explained.

As a result, farmers tend to opt for animal feed made from imported corn and imported soybean waste because it is cheaper.

A different situation exists for other commodities such as soybeans and milk.

She mentioned that domestic production for these two commodities has not yet been able to meet domestic demand, thus imports are necessary.

However, Eliza emphasized the importance of serious efforts from the government to reduce dependence on imports of these vital commodities.

"Are we going to continue to rely on imports?" she asked.

According to her, there have not been significant efforts to reduce dependence on imports of soybeans, corn, milk, and meat.

"If this requires R&D (research and development), and fair and certain pricing policies for farmers similar to the government's purchase policy for dry harvested grain (HPP) at Rp6,500 per kg," she stated.

"When the rice begins to show results," he said again.

According to the "2024 United States Agricultural Export Year Book" from the United States Department of Agriculture (USDA), total agricultural exports from the US to Indonesia in 2024 reached 2.9 billion US dollars, a decrease of four percent compared to the previous year.

The US ranks as the fourth largest supplier of agricultural products to Indonesia, following Brazil, China, and Australia.

Soybeans are the largest agricultural export commodity from the US to Indonesia, valued at 1.3 billion US dollars. Indonesia is the fourth largest importer of soybeans from the US, after China, the European Union, and Mexico.

In addition to soybeans, Indonesia also imports various other agricultural products from the US, including distillers grains for livestock feed, milk, wheat, cotton, as well as beef and its processed products.

Tag: Agricultural Imports Eliza Mardian Soybeans And Milk