SOYBEAN PRODUCTION CONTINUES TO DECLINE

Ministry of Agriculture indicated that there are a number of factors that led to national soybean production to continue declining in the past five years. One of them is because the government was late in issuing regulations related to soybean trade system. Ministry of Agriculture reported that soybean production in the last 5 years continues to decline due to lack of regulations that guarantee price at farm level.

These conditions make soybean price became erratic. During that decade, the price of soybeans fluctuated and followed international prices. Moreover, during the golden harvest, the first of this commodity is pretty low. Thus, farmers are not eager to plant this commodity.

Maman Suherman, Director of Assorted Nuts and Bulbs, Ministry of Agriculture, in Jakarta (Tuesday, October 8), said that based on data of the Ministry of Agriculture, soybean production in 2008 totaled 775,710 tons from an area of 590,956 hectares. Soybean production once rose in 2009 to 974,512 tons. Maman said that the quite fantastic increase in production throughout 2008-2009 is because international soybean prices at the Chicago Board of Trade (CBOT) increased.

Maman admitted that Indonesia is still dependent on imported soybean. Of the total soybean requirement at 2.5 million tons/year, soybean production in the country could only suffice 700,000 – 800,000 tons/year. There are several factors that trigger the law soybean production in Indonesia. One of them is the lack of soybean plantations in the country. “Currently, the size of our soybean plantation is only 570,000 hectares. With the expansion, the size could reach 1 million acres so it could make our soy procurement position to shift”, he said.

In addition to land factor, Maman said, low productivity of local soybean is another factor. The Ministry of Agriculture seeks to improve the productivity of soybean plantation. On average, each hectare of soybean plantation in Indonesia is only capable of producing 1.5 tons of soybeans. Farmers prefer to plant rice or corn instead of soybean. To this end, Minister of Trade, Gita Wirjawan, issued a Government Purchase Price (HPP) policy for soybeans in 2013. The price set by the Ministry of Trade is Rp7,000/kg.

The government, he said, has opened soybean imports to meet domestic demand. This policy has a significant impact on local soybean because it must compete with imported soybeans from the United States. As long as importer is qualified to obtain Import Permit (SPI), import permit will be granted.

Meanwhile, Chairman of the National Soybean Board, Benny Kusbini, believed that it is easy to increase national soybean production provided that there is a willingness of the technical ministries. According to Benny, soybean plants are suitable for planting in Indonesia. But, the problem of the Ministry of Agriculture is the difficulty to find new soybean plantation area. He then asked the Minister of Agriculture not to complain much, just apply the stock management system then search for potential land for planting soybeans. The Ministry of Agriculture should learn what Indonesia did to achieve soybean self-sufficiency in 1992. 

Business News - October 11, 2013