News / Asia

Indonesians Struggle with Rising Meat Prices

A woman buys meat at a market in Jakarta, Indonesia, Friday, Aug. 17, 2012. Today, a kilogram of beef can cost more than $13.
A woman buys meat at a market in Jakarta, Indonesia, Friday, Aug. 17, 2012. Today, a kilogram of beef can cost more than $13.
Kate Lamb
— Rising prices and corruption continue to plague Indonesia’s national goal to become self-sufficient in regards to producing staple foods.

The controversy over beef prices reached a new level in recent weeks when it was discovered that Bakso sellers, who serve a popular meatball soup, were mixing pork into the supposedly pure beef dish.

The news sparked a media scandal in the Muslim-majority country where pork is haram, or forbidden, for many.

Bakso sellers, usually street vendors with food carts, have been forced to cut costs, and corners, as beef prices skyrocket.

The price of beef doubled after Indonesia's president slashed the beef import quota by almost two-thirds last year. The government plans more cuts in imports later this year.

Thomas Sembiring, executive director of the Indonesian Meat Importers Association, says the main problem is the agriculture minister’s resolve to achieve self-sufficiency in key commodities such as rice, beef, sugar, soybean and corn, by 2014.

“The minister is too obsessed with self-sufficiency," Sembiring says. "Even the price of meat, the most expensive meat is now in Indonesia. You know what the minister recommends? If you cannot afford to buy meat, don’t eat meat.”

Sembiring says the government is denying market realities and its self-sufficiency dream is blinding it to the fact that many people now cannot afford to eat beef.

The rising prices have also led to scandals as some officials try to profit off the situation.

The latest fiasco involves the head of a conservative Islamic party who was arrested last week for allegedly accepting bribes from a beef importer.

These days, a kilogram of beef costs more than $13. This year, the government plans to further cut imports by 30 percent for cattle and six percent for beef, even as consumption rises 13 percent.

The government is defending its self-sufficiency target on the grounds of food security, but it is unclear whether domestic producers will be able to make up for the falling imports.

“There are two issues here," economist Fauzi Ichsan says. "Firstly, by imposing import tariffs on these commodities, then you risk higher inflation domestically. So there is an inflationary impact. Secondly, it is yet to be seen whether such policies would induce self-sufficiency, given the weak infrastructure. If you want to promote self sufficiency in a certain sector, you’ve got to ensure that there is supporting infrastructure to support that sector.”

Indonesia’s falling imports of animal products have also drawn the ire of the United States, which recently filed a complaint at the World Trade Organization complaining the country is restricting trade in plants and animals.

Sembiring, of the Indonesian Meat Importers Association, believes the government’s self-sufficiency dream is illogical and unattainable.

Cutting the import quota is questionable, according to Sembiring, because the domestic cattle population has continued to grow alongside the foreign imports.

Although trade policy and corruption stories have dominated headlines, the traditional street vendors and their customers may be the hardest hit.

Sukanto, a bakso seller in central Jakarta says rising prices are undercutting his meager income and it is harder to find beef at the market.

He says there are fewer and fewer bakso sellers around.

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