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Tuesday, 20 March 2018 | 18:48
Bank Mandiri Customers Lost Rp150 Million Bank Mandiri President Director Kartika Wirjoatmodjo stated
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Breaking the Beef Mafia Chain  
Friday, 10 February, 2017 | 14:12 WIB
Breaking the Beef Mafia Chain  

TEMPO.CO, Jakarta - The arrest of beef trader Basuki Hariman by the Corruption Eradication Commission (KPK) serves as further confirmation that the beef mafia is still everywhere in this country. He is alleged to have paid a bribe to Supreme Court Justice Patrialis Akbar to have the zone-based trading rule regulation annulled.

The judicial review of Law No. 41/2014 on the Breeding and Health of Animals is closely linked to business interests. Since the government implemented the zone-based import system, the activities of the small number of businessmen who had dominated the supply of beef from Australia and New Zealand have been disrupted. The regulation opened the door to imports from countries not yet completely free of foot-and-mouth disease provided the beef is not from a zone or province where the disease is prevalent.

This zone-based import policy is right. It allows for imports from more nations. The national demand for beef should no longer rely on just one or two countries.

The greater range of import options will eventually mean lower prices for consumers. But this will only happen if there is no sharing of quotas. The implementation of the zone-based import system must be through open tenders with equal opportunities for all companies. Sharing out quotas behind closed doors would only put more money into the pockets of those rent-seekers who have access to information and power. In the end, consumers would lose out.

The concerns of consumers and local livestock farmers about infections from countries not yet completely free of disease are understandable. But this is no reason to reduce the choice of imports. The World Health Organization has even expressed support for the import of beef from India, Brazil and Argentina because not every region of those nations is afflicted by disease. Foot-and-mouth outbreaks can be anticipated with stringent oversight. The job of the Livestock Health Experts Commission is to ensure that frozen beef from India has been sterilized.

On the other hand, restricting imports from certain nations is a mistake. This policy results in prices and supplies being controlled by a small number of businessmen. This is why it is no surprise that the price of beef in Indonesia is higher than in other countries. And with this state of affairs, smugglers can import illegal beef and sell it at lower prices.

The government should not be averse to allowing imports in order to fulfill domestic demand. Two years ago, the demand was 653,980 tons. Imports supplied around 36 percent of this. Every year, demand rises by an average of 10 percent. Local cattle breeders are unable to meet this demand because the 10 million cattle they own, equivalent to 1.7 million tons, cannot be slaughtered all at once.

It is also not easy to develop large-scale cattle farms. Fattening cattle requires extensive areas of grass and plentiful water. One such area is East Nusa Tenggara. However, since Indonesia is a nation of islands, the cost of transporting cattle is high, over Rp100,000 per kilogram.

Despite high production costs, local cattle breeders need not worry that they will be undermined by imports from India. There is still a market because upper-middle class consumers prefer higher quality meatin the same way they like the local chickens known as ayam kampung. With a wider choice, consumers will be able to buy a range of quality beef at competitive prices. (*)


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