Friday, January 18, 2008

The Politics of Soybean (1)

I'm no expert in soybean economics. I follow rice dynamics more diligently than that of soybean. The only research I have done regarding soybean is one in which we (Patunru, Trialdi and Havidz, 2005) looked closely into its price transmission across production and consumption centers (provincial levels with East Java being the reference market). The study found that prices across main provinces were in general weakly integrated, and some were not integrated at all in the long run. The study concluded that soybean price transmission (at least in 1993 to 2003) was constrained. In other words, the market was less than efficient.The possible causes of this were 1) weak marketing institutions, 2) poor infrastructure (esp. that to support distribution), and 3) inability of local farmers to match the international price. The latter came with qualification as the transmission from international to domestic price was also far from perfect.

Recently, there has been a big fuss over the increase of soybean price.

Kompas ran a couple of articles and op-eds. The tone, as you would have predicted, was of course to blame it on the government and liberalization. The observers cited there were both confused and confusing. Take this article for example. A parliamentarian reportedly said that the removal of import duty was absurd, because it "would not have any effect on price and the current shortage of soybean". He called it an "empty policy". But later in the article he was quoted as suggesting that the government should create incentive in the form of "high tariff when price is low and low or no tariff when price is high". That is exactly what the government just did (assuming of course that the "tariff" and "price" written by Kompas journalist mean import duty and world price, respectively).

The President, on the other hand, said that tempeh and tofu (both use soybeans as key ingredient) makers needed to adapt to the increased price. Sure. But then he went on with "the government will look for cheaper imports". His work would be much easier if he let the private sectors do the job. In fact, importation has been exclusive for only four big companies. Removing import duty might not be very efficient if the limited number of importers could collude to fix the price. The notion as said by one source that the "price crisis" is a result of "too much import" is foolish. The more you import the larger the quantity in the domestic market and the pressure to price is to take it down -- the magnitude of which depends on other things, e.g. distribution. The study on price transmission suggested that distribution is problematic, too.

So what's to do? In the short run, more, not less, import should be allowed. In the longer run, distribution and production problems are to be tackled. That includes improvement of road infrastructure and irrigation, as well as technology that leads to better varieties and farm management.

7 comments:

roby said...

I was waiting for this post. Thanks.

Aco said...

Thanks, Rob. Hopefully I can update it later

Anonymous said...

Sukamu Kolopot:

Aco, dalam situasi yang ideal, liberalisasi mestinya memberi manfaat bagi semua pihak. Khusus dalam hal pertanian, meskipun putaran demi putaran GATT sudah dilangsungkan puluhan kali, tetap saja tidak dicapai kesepakatan. Negara-negara maju tetap memberi subsidi kepada para petani misalnya untuk makanan sapi yang jumlahnya lebih besar dari makanan buat manusia di Afrika sana. Dalam kasus komoditas pertanian juga sama, mereka negara maju juga tetap keukeuh memberikan subsidi. Produk mereka bisa lebih kompetitif dan harga bisa jauh lebih murah. Padahal kesepakatannya setiap negara harus sportif. Banyak negara berkembang harus mematuhi aturan dengan tidak memberikan subdisi dan menurunkan tarif, sementara di lain pihak mereka tetap memberikan subsidi bagi petaninya.
Saya sepakat sudah seharusnya pemerintah memperbaiki supply side mulai dari infrastruktur, distribusi, akses dsb. Untyk hal ini, pemerintahan di era reformasi ini seharusnya meneruskan apa yang telah dilakukan oleh mantan Presiden Soeharto. Jangan seperti sekarang, tambal sulam dan reactive response saja dalam menangani situasi.

Aco said...

Pak Sukamu yang baik, saya ada beberapa kali menulis tentang GATT/WTO di blog ini juga. Pada intinya saya skeptik bahwa putaran Doha bisa sukses selama AS masih bersikap seperti sekarang. Tapi menunggu sampai AS mau menghapus subsidi pertanian mereka sebelum melakukan pembenahan di sini juga adalah hal yang kurang bijaksana. Karena terlepas dari apa yang dilakukan negara lain, mengurangi distorsi lebih banyak memberikan manfaat. Kita juga terkadang terlalu terburu-buru melakukan generalisasi. (Dalam soal beras misalnya, orang2 mengatakan bahwa beras kita dimainkan oleh AS. Itu tidak benar, karena beras di pasar AS adalah japonica, sementara kita indica).

Anonymous said...

Sir, you were right about the confusing part, Who vote for him anyway?
Pssst, let me tell you a big secreet: He is a Professor in Economics..
I won't attend his class if I were his student

Anonymous said...

Sukamu Kolopot:
Betul itu Pak Aco. Saya sepakat dengan anda bahwa seharusnya pembenahan demi pembenahan sektor pertanian kita seharusnya sudah dilakukan atau meneruskan kebijakan masa lampau yang sebetulnya sudah on the right track. Kepanikan atas turbulensi komoditas pangan akhir-akhir ini, menurut hemat saya, juga tak lepas dari ketiadaan kebijakan dan keberpihakan yang sungguh kepada para petani kita. Akhirnya ketika zaman sudah menuntut kompetisi dalam era liberalisasi, kita tak pernah siap. Impor selalu dijadikan exit policy untuk mengatasi kepanikan. Jadi, Indonesia sendiri yang sebenarnya menjadikan dirinya tak bisa bertanding dalam playing field liberalisasi. Kebijakan pemerintah kita terhadap petani tak ubahnya kebijakan penjajah kolonial dulu terhadap rakyat kita.

Pro Anonim: Hush..his daughter is studying in FEUI. Also, his daughter is actively in FEUI newbies led by Pak Aco student the so called Fik.

Aco said...

Anon dan Sukamu: lain kali tolong jangan menyerang pribadi-pribadi. Silakan menyerang argumentasi orang lain; bukan personal mereka. Thanks.