High security to protect Java's garlic fields of gold

Corruption and import restrictions in the name of food safety send prices of staple crops skyrocketing, hurting consumers

PUBLISHED : Monday, 15 April, 2013, 12:00am
UPDATED : Monday, 15 April, 2013, 3:50am

Central Java's farming villages are tight-knit and communal. But trust in one's neighbours has wavered over the past month as food prices have soared, turning crops like garlic and shallots into a small fortune.

"If the price of shallots becomes expensive, we have to watch for thieves," said Suripto, one of several farmers who participate in regular night patrols to guard their fields against looters. He says none of his precious shallots have been stolen yet. But the threat has stirred suspicions and put both police and farmers on alert.

During the past month, shallot prices in Indonesia have ballooned from around US$1.20 per kilogram to as much as US$7. Prices of garlic and beef have also increased because of government policies that restrict imports of certain fruits, vegetables, and animal products.

The increase has hit consumers in Indonesia, where spices like shallots and garlic are staples. It has also been a source of intrigue, with stories about price-fixing cartels and busts of illegal onion smuggling operations gracing the pages of local newspapers.

Analysts say the supply shortage stems from complex import licensing procedures and inexplicable limits on goods that Indonesia could never produce enough of on its own.

For instance, a horticultural import regulation that took effect in September requires all fruit and vegetable importers to obtain an import recommendation letter from Indonesia's Ministry of Agriculture, which sets import quotas. Only then can they apply for an import permit with the Ministry of Trade. The import quota system for beef is similar.

Officials say limits are needed to improve food safety and ensure higher incomes for farmers. But without measures in place to help farmers boost their production, development experts say import restrictions often have the opposite effect.

The restrictions also hurt consumers by driving up prices unnecessarily, economists say.

"What we're seeing is price spikes without credible evidence of adequate supply," says Sjamsu Rahardia, an economist at the World Bank. "This is not the best policy to achieve Indonesia's development objectives."

According to the trade ministry, Indonesia produces about 13,000 tonnes of garlic annually, compared with the 360,000 tonnes consumers eat. It must make up the difference through imports, 95 per cent of which come from China.

It blames the rising price of garlic on a lack of supply from China. And the government says the high price of shallots is the result of heavy rains that have reduced crop output.

On April 3, trade ministry officials said they would look at revising the licensing procedures to make them simpler, though restrictions would remain in place.

Analysts say the trade restrictions may actually be a way for certain government officials to fill their own pockets and fund future elections campaigns.

Recently the head of the political party whose members dominate the agriculture ministry was named a suspect for allegedly accepting bribes.

"The Ministry of Agriculture is using this function to raise money," said Yohanes Sulaiman of the Indonesian National Defence University.

And with elections set for 2014, he says, corruption and nationalist policy appeals are likely to increase - keeping people like Paniem, a woman whose husband participates in the night patrols in Bantul, ever mindful of their small fields of gold.

Four dollars a kilogram for shallots, she says with incredulity, nodding toward last week's price. "That is extraordinary."