January 31, 2019 Print

Center for Indonesian Policy Studies (CIPS), attempts to tackle high maize prices. Their paper, “Reforming Trade Policy to Lower Maize Prices in Indonesia” shows how stifling regulations has contributed to high maize prices that negatively impact the nation’s poor.

“Our policy paper ‘Reforming Trade Policy to Lower Maize Prices’ in Indonesia is part of CIPS’ Affordable Food for the Poor project that advocates for free trade and open markets to allow for more affordable staple food to be available for Indonesians,” said Anthea Haryoko, head of external communications at CIPS. “Corn is of particular importance as not only is it for direct human consumption but corn also consists of more than half the ingredients in animal feed for poultry and cattle farms.”

Despite the importance of this crop, in 2016 the Indonesian government decided to pass a regulation requiring all maize imports to go through the National Logistics Agency, which is a government-owned company. Requiring all maize imports to go through a single organization reduced the availability of maize. Combined with other factors, such as production, this led to maize prices that exceed 2.5 times the international market price.

Additional regulations meant to simplify trade only resulted in contradictory rules that are difficult to navigate. CIPS proposed multiple solutions to this problem including simplifying the trade rules and reducing the contradictions in order to streamline the trade process. The rest of its suggestions are outlined in the report.

“CIPS' Affordable Food for the Poor set out to stop the likelihood of protectionism dominating political rhetoric,” continued Haryoko. “Food trade is a highly sensitive issue because the Indonesian public wrongly believes it protects the farmers. In 2014 Indonesian President Joko Widodo had won elections on the promise to restrict food imports. This project instead sought to convince President Widodo to abandon the costly policy without a public statement. Our aim was that he would simply not renew his protectionist pledge in his 2019 re-election campaign. This would mean a de-facto turnaround from his 2014 policy and would open up the space for trade liberalization after his re-election in 2019.”

“We've succeeded in rolling back protectionist rhetoric in the national leadership and Widodo’s official 2019 campaign contains no mention of a protectionist food self-sufficiency agenda,” continued Haryoko. “It appears that we are also a significant step closer to real food trade liberalization as there are considerations in his administration to review the national food law during his second term in office.”

Through reports like this one, CIPS is working to change the dialogue around food and ultimately provide better access to staple foods for Indonesians.

This isn’t the first time CIPS has tackled food trade. Last year, Atlas Network covered CIPS’ advocacy work on lowering food costs through trade.    

CIPS received grants from Atlas Network in support of its Affordable Food for the Poor project and its advocacy campaign.