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November 22, 2024 | 07:29 am
TEMPO.CO, Jakarta - The Director General of International Trade Negotiations of the Ministry of Trade (Kemendag), Djatmiko Bris Witjaksono, said the request to review the zero percent import duty for imported milk from Australia and New Zealand is illogical. According to him, an increase in tariffs will result in higher prices for raw materials and milk.
"If to review, it doesn't make sense. Why? If the review increases, the prices of raw materials needed domestically will also increase. Where does the cost come from? Why do we have a high-cost economy?" said Djatmiko to reporters at the Parliament Complex, Jakarta, Wednesday, November 20, 2024.
With the increasing cost of raw materials, Djatmiko said that milk will also become more expensive. He said that the people of Indonesia would find it increasingly difficult to consume milk.
According to Djatmiko, FTAs with Australia and New Zealand are useful not only in supporting the capabilities of domestic producers for export. This agreement also plays a role in supporting the needs of domestic industries, including providing raw materials.
Djatmiko revealed that not all domestic milk meets the standards, which is why it is not optimally absorbed. He said the milk processing industry needs to improve its quality. The demand for milk continues to increase beyond the amount produced by farmers.
Therefore, Djatmiko said that his institution is preparing a scheme to absorb local dairy milk. The Ministry of Trade will coordinate with the Ministry of Agriculture and the Ministry of Industry.
Meanwhile, the Minister of Trade Budi Santoso said that milk imports have been regulated in Minister of Trade Regulation (Permendag) Number 36 of 2023 junction Permendag Number 8 of 2024. That policy requires a recommendation from the technical ministry, namely the Ministry of Agriculture.
Therefore, Budi Santoso admitted to communicating with the Ministry of Agriculture regarding the regulations on milk imports. He is considering renewing the requirements so that imported recommendations require the industry to absorb local milk. According to him, this is the fastest step.
"If changes (in the agreement) take a long time, negotiating changes must be discussed. Just determining the schedule already takes a long time. We are looking for the fastest way," Budi Santoso told reporters at the Parliament Complex, Jakarta, Wednesday, November 20, 2024.
At present, the number of national dairy producer cooperatives reaches 59 units. In 2023, the population of cows in dairy producer cooperatives amounted to 227,615 heads. They produce 470 thousand tons of milk. Meanwhile, modern dairy farms with 32 thousand cows can produce 164 thousand tons of milk.
Minister of Cooperatives Budi Arie Setiadi said that to meet these needs, the government imports milk from abroad. The largest importer in Indonesia currently is New Zealand, with a milk production of 21.3 million tons. Together with Australia, New Zealand utilizes the FTA with Indonesia.
This agreement eliminates import duties on dairy products, making their products at least 5 percent cheaper than global dairy product exporters. According to Budi Arie, the geographical proximity of Australia and New Zealand to Indonesia makes their dairy products very competitive in price.
Budi Arie said that skim milk imports have made fresh milk prices cheaper. Fresh milk is currently priced at Rp 7,000. The price of fresh milk should reach Rp 9,000. "Dairy farmers are experiencing losses," said Budi Arie at the Ministry of Cooperatives office in Jakarta on Monday, November 11, 2024.
HAN REVANDA | RR ARIYANI
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