The Ministry of Agriculture: FARMERS GET ZEALOUS ABOUT PLANTING SOY

The soaring price of soy got tofu and tempe makers into trouble some were even on strike for lowered price by stopping to produce tofu and tempe, but the bliss behind the restless price of soy was that soy growers were getting zealous about planting soy.

The Ministry of Agriculture, Suswono in Jakarta on Monday (10/9) stated that the increased price of soy motivated farmers to grow soy, therefore the present farmers’ price of soy Rp 7,000/kg must be maintained.

Moreover in some production centers of soy like Kebumen, the potential of soy production was fairly good, i.e. 2.4 tons/ha. Survey data had it that the average productivity today was posted at 2.5 ton to 4 ton/ha; meaning plantation yields was fairly good, i.e. 1.3 – 1.4 tons/ha. “From research outcome it is visible that plantation yields of soy is potential enough for development” Suswono said.

Based on productivity calculation of at least 2 tons/ha alone and soy price at Rp 7,000/kg, farmers would receive earnings of Rp 14 million/ha. Meaning of production cost was Rp 2 million, growth could make profit of Rp 2 million/ha. “Hence, at the price of Rp 7,000/kg soy cultivation business would be competitive against corn” Minister Suswono was quoted as saying.

The Government was aware that soy business still had to compete with corn, because the two commodities were planted on the same land. Therefore, in order to be self-supporting in soy more space was needed. To procure more land, the Ministry had promised to procure extra land covering 500 thousand ha.

“With just two more years left we would maximize effort to meet the target of self supporting in soy. Moreover price of soy was sufficiently good and there was commitment from the Ministry of Forestry to procure land”.

Moreover Indonesia had the experience of self supporting in soy in 1992. At that time there was protection by the Government, i.e. price incentive by setting soy price at 1.5 times the price of soy. In addition to that the Government through Bulog acted as sustainer of farmer’s price of soy.

Ever since the incentive was non existent and price was no longer stimulating to farmers, production of soy dropped drastically from the previous 1.5 million tons to the present 800 thousand tons. “So one of the stimulators to increase production was attractive price”.

About the Government’s plan to apply Government’s Buying Price (HPP) for soy, the Government was still watching how things were going, at least if there was a HPP price of Rp 7,000/kg because if piece of soy at farmers level were favorable enough, they would be zealous about running soy business. “We are also considering other instruments like once again imposing import tax for soy. At the moment the Government was exempting tax on soy until December” Suswono concluded.

Business News - September 14, 2012