Indonesia's poor suffering as high soy prices hit home
Fri, Feb 15, 2008

PANDEGLANG, INDONESIA - WITH high soybean prices signalling a possible end to cheap staple foods in Indonesia, the suicide of a food vendor has become a symbol of widespread hardship.

Mr Slamet, 49, was found hanging in his house on the morning of Jan 16, a day after he had made just 8,000 rupiah (S$1.22) at the local market in this town in the western Javanese province of Banten, his wife, Nuriah, said.

Spiralling prices for tofu and tempeh, a fermented soy cake, have prompted protests from sellers and panic among households in Indonesia, where there are fears a key source of protein is moving out of reach for millions of poor.

Days before his death, Mr Slamet appeared on television along with other local food sellers protesting the high soybean prices.

'He felt his objections focused on the government, that the government needed to pay attention to poor people like himself,' a tearful Nuriah says.

'Slamet said he was tired of a difficult life. He said he tried so hard in life, but there was never any change.' The crisis has highlighted Indonesia's reliance on imported soybeans, prices of which are surging along with other global commodities.

Soybean prices have risen drastically in the last year, in line with the trend of soaring commodities prices worldwide. In Indonesia today, a tonne of soybean costs US$610, when only a year ago it was US$332.

Indonesia imported 1.3 million tonnes of soybeans last year, 65 per cent of its total domestic consumption, according to the American Soybean Association.

But as prices have climbed, ordinary Indonesians have felt the pain.

In the face of the crisis, the Indonesian government has removed tariffs on imported soybeans, most of which come from the United States.

The government has also committed Indonesia to weaning itself off imports by 2011 in the hope of producing the two million tonnes the country needs each year for domestic consumption, The Jakarta Post reported last month.

According to economist and trade ministry advisor Chatib Basri, the way out of the crisis is for locally produced Indonesian soybeans to become competitive with foreign imports.

Struggle to convince farmers to grow soybeans again
The government should provide subsidies to prop up the floundering domestic industry at first, Mr Basri says, but local soybean production should be forced to stand on its own feet as soon as possible.

'History tells us that only industries under strong economic pressure will survive. If you protect them all the time they will never be ready,' he says.

'If (the government's) target is 2011, they still have a long way to go.

The solution is to increase productivity, provide better access to technology and financing.'

Any self-sufficiency plan will face problems starting from the ground up - with Indonesia's soil, says Mr Muhammed Jusuf, a researcher at the Bogor Agricultural University.

In much of the area outside of the fertile main island of Java, high acidity means soils fail to yield the kind of high-quality, high-yield soybeans needed to compete with larger imported varieties, Mr Jusuf says.

Global warming, water shortages and poor infastructure are also key challenges to be overcome, he says.

Mr Jusuf is working to develop a new variety of super-soybean that thrives in acidic conditions. With a dense population and expanding development crowding land in Java, his soybean could grow in other parts of the archepeligo, such as the more acidic Kalimantan and Sumatra islands.

Mr Jusuf also hopes the new bean could be the dangling carrot that convinces Indonesian farmers to begin growing soy again. According to the Indonesian Bureau of Statistics, soybean cultivation in Indonesia has decreased from over 808,000 tonnes in 2005 to 608,000 tonnes in 2007.

Given competition from abroad, Mr Jusuf says struggling farmers can make far more growing corn or rice than soybeans.

While the Indonesian government has now committed 1.2 trillion rupiah for soybean expansion outside Java, Mr Jusuf says he is yet to find the funding to conduct trials of his new soybean.

More needs to be done
He also says he's concerned that promising research projects like his own could become stuck in Indonesia's grinding bureaucracy.

'Maybe if we're lucky in one year it will be distributed to farmers,' a cautiously optimistic Mr Jusuf says.

But Mr Basri believes more needs to be done in the short term to alleviate pressure on families of tofu and tempeh sellers and producers like Slamet.

The US$17 billion Indonesia spends every year subsidising fuel - much of which is burned in the cars of the urban rich - could be used to support those working in the tempeh and tofu industry, he says. -- AFP


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