JAKARTA (TheInsiderStories) - Ministry of Trade has issued a rule on the purchase of reference product prices for farmers as well as reference selling price at consumer level. The new ruling was issued by the Trade Ministry, Regulation No. 63 of 2016 which was signed few days ago.
Director General of Domestic Trade Okay Nurwan said reference prices will be set on regulated product prices, namely rice, maize, soybeans, sugar, chilli, onion and beef or buffalo.
The reference prices on seven food commodities will be set based several things including the production cost structure, as well as a reasonable profit margin earned by farmers.
Some commodities have already had benchmark prices set by the government, such as sugar at price of Rp 12,500 per kilogram (kg) at consumer level, and beef is set at Rp 80,000 per kg at the consumer level.
According to OK, the government will intervene in the prices at the farmers or the consumer level when the prices have exceeded the set limit. For initial phase, Jakarta will implement this scheme for sugar product at 41 markets.
So far, the greater Jakarta area (Jabotabke) has become main contributor to high inflation compared to other regions. With the success of this policy in Jakarta, it will be easily applied in other regions.
The pricing policy will be evaluated every four months. The evaluation is undertaken on the structure of production at the level of farmers and ranchers. Sanctions will be given if this policy is left to the respective regions. Trade Minister said it is optimistic the effectiveness of such policy will help stabilize inflation rate. (*)