- Title: INDONESIA-CHILLI Indonesians battle hot inflation rate as chilli price spikes
- Date: 20th August 2015
- Summary: SUKABUMI, WEST JAVA PROVINCE, INDONESIA (RECENT - AUGUST 6, 2015) (REUTERS) CHILLI PLANTATION FARMER TENDING THE PLANTATION VARIOUS OF FARMER PICKING CHILLIES FARMER PUTTING CHILLIES INTO BASKET CHILLI FARMER, RAHMAT, TALKING TO REPORTER (SOUNDBITE) (Bahasa Indonesia) INDONESIAN CHILLI FARMER, RAHMAT SAYING: "Farming is like gambling, because when we plant those chillies today and harvest them in three months, we cannot predict the price. That's the challenge." CHILLI PLANTATION WIND BLOWING REEDS LOCAL CHILLI TRADER, YUDI FIRMANSYAH TALKING TO REPORTER (SOUNDBITE) (Bahasa Indonesia) LOCAL CHILLIS TRADER, YUDI FIRMANSYAH SAYING: "If the farmers deliver the chillies themselves, the cost would be three to four times more. Since we, the traders also give them (the farmers) loans to plant, they prefer to go through us." WORKER PACKING CHILLIES INTO BAG WORKER HOLDING CHILLIES CHILLIES IN PLASTIC BAG CHILLI FARMER AND HER CHILDREN JAKARTA, INDONESIA (RECENT - AUGUST 13, 2015) (REUTERS) EXTERIOR OF TRADITIONAL MARKET RED AND GREEN CHILLIES RED CHILLIES VARIOUS OF CHILLI SELLER, DEDI SUHENDI ARRANGING CHILLIES (SOUNDBITE) (Bahasa Indonesia) CHILLI PEPPERS SELLER, DEDI SUHENDI SAYING: "Sometimes, during the drought season, the harvest declines and therefore the price increases." JAKARTA, INDONESIA (RECENT - AUGUST 7, 2015) (REUTERS) NATIONAL DEVELOPMENT PLANNING MINISTER , SOFYAN DJALIL WALKING (SOUNDBITE) (English) NATIONAL DEVELOPMENT PLANNING MINISTER, SOFYAN DJALIL SAYING: "You know, if we need to import, we have to import, okay? Because you know, of inflation, and then of course El Nino, the inflation take place, it hurt very hard if you let the poorest of the poor of our society." JAKARTA, INDONESIA (RECENT - AUGUST 14, 2015) (REUTERS) LOCAL FOOD STALL FOOD STALL OWNER, ETI, PUTTING CHILLIES INTO PESTLE AND MORTAR ETI COOKING ETI MAKING SAMBAL WITH PESTLE AND MORTAR (SOUNDBITE) (Bahasa Indonesia) FOOD STALL COOK, ETI SAYING: "The current chilli price is expensive, but because we need it for our food stall so we have to buy it no matter what." SAMBAL IN MORTAR VARIOUS OF MAN EATING FOOD WITH SAMBAL ETI IN HER STALL
- Embargoed: 4th September 2015 13:00
- Location: Indonesia
- Country: Indonesia
- Topics: General
- Reuters ID: LVAE149QT38SY8Y0W2ORWR8IZ3ZX
- Aspect Ratio: 16:9
- Story Text: Poor infrastructure makes stable pricing difficult at the best of times in Indonesia, but the rural poor are increasingly pinning the blame for wild fluctuations in the price of staples on the policies and unmet promises of President Joko Widodo.
With Southeast Asia's biggest economy growing at its slowest pace in six years, and half its 250 million population living on less than $2 a day, price spikes on foods such as rice, sugar, beef and chillies can be devastating.
"Farming is like gambling, because when we plant those chillies today and harvest them in three months, we cannot predict the price. That's the challenge," said 32-year old Rahmat, who farms chillies on the foothills surrounding Mount Salak in West Java, about 115 km (70 miles) south of the capital, Jakarta.
Fresh red chillies are as common on Indonesian dinner tables as salt and pepper in some countries, but over the last 12 months, prices have fluctuated between around 20,000 ($1.44) and 80,000 rupiah ($5.78) per kg, though Rahmat says his production costs have remained at just 10,000 rupiah ($0.72) per kilogram.
Their journey to table explains much of the volatility. Rahmat's chillies are carried on rickety motorbikes across potholed dirt tracks, then loaded onto unrefrigerated flatbed trucks and bought and sold by up to six traders en route to Jakarta, where they can sit in the world's most congested traffic for hours.
Farmers use traders because of the loans and transport they offer, said Yudi Firmansyah, a chilli trader in Sukabumi who supplies vegetables to three regional markets on a rented truck.
"If the farmers deliver the chillies themselves, the cost would be three to four times more. Since we, the traders also give them (the farmers) loans to plant, they prefer to go through us," he said.
About 15 percent of chillies reach their destination spoilt or too dry for Indonesian tastes, according to the Association of Indonesian Chilli Agribusiness.
Spoilage rises to almost 40 percent of fresh fruit and vegetables, according to industry estimates.
At Jakarta's big Kramat Jati market, chilli sellers said prices can change by the hour, and the produce easily spoils without cold storage.
"Sometimes, during the drought season, the harvest declines and therefore the price increases," said vendor Dedi Suhendi.
President Widodo took office in October with promises to solve such problems with a massive infrastructure push, but so far his administration has failed to spend the $22 billion budgeted for such projects this year due to a lack of coordination among ministries.
Widodo, whose approval rating has slumped from 72 percent to just 41 percent in July, had promised to build more dams, modernise irrigation systems, increase planting areas for foods and provide easier access to credit for smallholder farmers.
Agriculture Minister Amran Sulaiman said 2 trillion rupiah ($145 million) had been allocated this year for dam building in dry areas and the work was ongoing.
But the farmers said they had yet to see any government help under Widodo.
To water their plants, farmers like Rahmat have to rely on rain or fill buckets and small plastic bottles at a nearby stream. It can take up to a week of one worker's labour to water a hectare of crops.
Indonesia was once self-sufficient in rice and sugar, but like many other food crops, output has fallen due to competition for farmland from either cash crops like palm oil or from industry and housing.
Since coming to power, Widodo has pursued ambitious self-sufficiency goals to protect domestic farmers.
This has included curbing or delaying imports of raw sugar, beef and cattle, corn and rice, which has resulted in shortages and price rises.
The government blames dry weather, food hoarding and speculators for the price swings, and has increasingly turned to state food buyer Bulog to limit price increases, buying from farmers and selling below market price.
"You know, if we need to import, we have to import, okay? Because you know, of inflation, and then of course El Nino, the inflation take place, it hurt very hard if you let the poorest of the poor of our society," said former Coordinating Economic Minister Sofyan Djalil days before he was appointed as the National Development Planning Minister.
As in most cases, the poor are the most vulnerable to feel the pinch.
"The current chilli price is expensive, but because we need it for our food stall so we have to buy it no matter what," said Eti, who runs a small Indonesian food stall in Jakarta.
Most of the food sold by Eti goes with homemade chilli paste, known locally as "sambal".
Instead of ad hoc imports to help control food prices, Widodo has signed a decree letting government cap prices of staples.
Regional auctions and markets that aim to reduce traders' involvement are also being planned by the government, but that won't address supply constraints.
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