Wednesday, 19 June 2013


Chairman of the Nation Economic Committee (KEN), Chairul Tanjung, agreed on increased of worker’s pay as long as it is accompanied with productivity increase. “The problem is not in the nominal value, but the productivity as pay should be based on output”, he said after the Economy Outlook 2013 event in Jakarta, Monday (12/10).

Chairul explained that currently there is an economic transformation process based on low-pay workers-based and natural resource-based economy to economy based on human resources with high productivity, processing skill including technology skill. “So, the problem is not the pay, but the productivity. People did not care if worker’s pay increase 40%, what they care is whether productivity could increase by more than 40%”, he said.

He took an example that a person is paid Rp 100 to make a pair of shoe. If this person could make 50 pairs, he is paid with Rp 5,000. “So, a person is paid based on productivity. Therefore there will be no problem”, Chairul said. He said that in this case there are no parties who force their intentions, whether the workers or the employers. Just find the best solution”, he said.

Business News - December 12, 2012


Commission IV of the House of Representatives urged the government so that Law No. 41/2009 on Sustainable Protection of Agricultural Land for Crop Farming could be implemented consistently. Therefore, agricultural land will not lessen due to shift of land function, so that food security will be maintained. We must be watchful over the highly rapid shift in land function. Regions which only pursue APBD (regional revenue) target have caused shift of land function becoming uncontrollable. This was stated by Vice Chairman of Commission IV of the House of Representatives, Firman Subagyo, when receiving delegates of Regional House of Representatives (DPRD) of Grobogan, Central Java, at the Parliament Building in Senayan, Jakarta.

Firman said that the House of Representatives highly supported consistent implementation of the Law as Central Java is a quite significant national food butter reaching 45%. Therefore, industrialization should not cause shift in agricultural land function.

Shift in agricultural land function reaches 120,000 hectare a year. While, size of agricultural land that can be opened is only 30,000 - 35,000 hectare.

The arrival of delegates of DPRD Grobogan led by Sutirto is in the framework of consultation on how to accelerate development, especially agricultural development, in Grobogan which is the second biggest area in Central Java after Cilacap. Some of the problems are many of younger generations are not interested in agriculture sector, lack of the role of Commission B of DPRD in the deliberation of Regional Budget (APBD) and agricultural facilities and infrastructures, and less supportive technology.

In response to this matter, Member of Commission IV of the House of Representatives, Djoko Udijanto, said that there are five variables implemented to increase welfare of poor farmers, namely correct input, capital assistance, preparation of adequate rural infrastructures, technology assistance, and marketing. If these two factors are realized, there will be development of agribusiness and increase of labor absorption that could prevent the younger generations from moving to the cities, and it will finally accelerate farmer’s welfare.

In the attempt to solve problems faced by the regions, Regent or Regional Head should have the initiative to work hard to develop his region and to increase farmer’s welfare. So, it is expected that members of DPRD of Grobogan wil make a program in the framework of improving farmer’s welfare, and the follow-up and budgeting will be assisted by Commission V of the House of Representatives.

In the State Budget (APBN) of 2013, there are regional transfer fund at Rp 528 trillion. This fund must reach the right beneficiary target, and DPR should participate in eliminating poverty.

Business News - December 12, 2012


For 2013, the Government sets target of beef import allocation at 80,000 ton. From this amount, 60% is in the form of feeder cattle or around 267,000 heads equivalent to 48,000 ton of meat. The remaining 40% or around 32,000 ton consists of fresh meat.

Total meat import quota for 2013 is lower that 2012 at 85,000 ton. This total volume consists of 283,000 heads of feeder cattle or equivalent to 51,000 ton and 34,000 ton of fresh meat. But, the governments once increase volume of meat import quota for industries by 8,500 ton so that total import in 2012 becomes 92,500 ton of meat equivalent. Therefore, quota of beef import for 2013 is 13.5% lower than in 2012.

In the past two years, the government has reduced quota of import of beef and feeder cattle. For example, in 2012, volume of beef import is at 120,000 ton, in 2011 declines to 100,000 ton, and in 2012 the it is reduced to 92,500 ton. Quota of feeder cattle import is also reduced from 645,000 heads in 2011 to 283,000 heads in 2012.

Directorate General of Animal Husbandry and Animal Health at the Agriculture Ministry said that it will not increase beef import quota in 2012. In December 2012, beef demand is estimated at around 17,306 ton, while beef availability is only at 17,976 ton or there is a 671 ton surplus. For January 2013, beef demand is estimated to reach around 15,306 ton, while beef availability is at 16,550 ton. Beef availability for December 2012 and January 2013 is planned to be fulfilled by imported meat at 7,083 ton, stock of ex-imported feeder cattle at 16,236 heads or equivalent to 5,271 ton of meat, and local meat at around 22,173 ton.

Increase in beef prices some time ago was due to increase of price of feeder cattle in Australia in October 2012 reaching USD 3.2/kg live weight plus. With 5% import duty and cost of quarantine check, upon arrival at the domestic cattle fattening company, the price becomes Rp. 32,000/kg live weight. After cattle had been fattened for 3 months, feeders cattle is sold at Rp 33,000/kg live weight, and upon arrival at consumers, the price becomes Rp 80,000 - 90,000/kg.

Available of meat stock to meet national consumption demand is derived from local cattle and buffalo slaughterhouses from main cattle production centers, like West Java, Banten, East Nusa Tenggara, West Nusa Tenggara, Bali, East Java, Central Java, Yogyakarta, Lampung, and South Sulawesi. And, the shortage will be fulfilled by import of feeder cattle from Australia, frozen meat from Australia and New Zealand. To accelerate entry of imported meat in 2013, it is expected that Import Approval Recommendation (RPP) for imported meat can be issued in December 2012.

Result of livestock Census of the National Bureau of Statistics (BPS) in 2011 recorded that domestic cattle population reaches 14.6 million heads. Actually, this amount could fulfill domestic meat consumption demand. But, from the total cattle population, not all cattle are ready to be butchered as their composition varies, starting from young calves, adult cattle, male cattle, and female cattle.

Cattle which are ready to be butchered are young male calves and adult male cattle of more than 2 years of age and unproductive female cattle of more than 8 years of age. 

Business News - December 14, 2012


Commission IV of House urged the Government that the Law no. 41/2009 on Sustainable Food Agricultural Land Protection be consistently exercised. Hence the area of agricultural land would not contract due to refunctioning of land so food resiliency could be well maintained. Fast refunctioning of land must be watched on. Provinces who were striving to pursue APBD target made land refunctioning from food gardens to other purposes out of control. This was stated by Chairman of Commission IV of House Firman Subagyo upon ediving DPRD delegation in Grobogan, Central Java, at the House of representatives in Senayan Jakarta.

Furthermore Firman stated that the Parliament was most supportive to consistent application of that Law because Central Java was the nation’s sizable food resource constituting nearly 45% therefore supposedly industrialization did not have to edge aside farm lands.

Refunctioning of land must be kept watched on as it reached 120 thousand ha of land each year, while the capacity to open agricultural areas was only around 30,000 - 354,000 hectares.

The arrival of Parliament (DPRD) of Grobogan led by Sutirto for consultation of how to exchange development especially agriculture in Grobogan where the area was the second widest in Central Java after Cilacap. Some hindrances were young people today being not interested in agriculture, lack of role of Commission B of House in Budget discussion and poor agricultural facilities and interior technology which were not supportive.

In response to that problem, member of Commission IV of House Djoko Udjianto said there were five variable ways to promote farmer’s welfare, i.e. the right input, capital aid, preparation of rural infra-structure, technological aid, and marketing efforts. When the five factors were realized, there would be agribusiness development and employment which would keep young people from moving to cities which would eventually promote farmer’s welfare.

In the effort to overcome problem in the regions, supposedly the Regent or Governor took the initiative to work hard to promote their regions including to promote farmer’s welfare. For that matter House members of Grobogan made a program in the effort to promote farmer’s welfare which soon would be followed up and have their budget be schemed up by Commission IV of House.

In APBN budget 2013 there was transfer fund for the region amounting to Rp 528 trillion. The financing must be right on target and House would be responsible in eliminating poverty.
Business News - December 14, 2012


In accordance with the Regulation of the Ministry of Trade no 54/2012, the Government made it compulsory for 26 wood based product types to pocket Certificate of wood Legality (SVLK) as per January 2013. The Ministerial Regulation only obliged 26 products types to pocket SLVK before exporting by January 1, 2013. Meanwhile 14 other wood based products were obliged to be legally certified by January 1, 2014. “The other 24 wood-based products are made by UKM small business and craters so we give them time to make adjustment before application” Bayu Krisnamurthi, Deputy Minister of Trade of the Ministry of Trade, disclosed in Jakarta on Monday (10/12/2012).

Of all the countries which were the export destination of Indonesia’s wood-based products, the market in Europe constituted 10% and Uni Europe were now strictly observing the arriving wood product. Bayu stated recently that he had exercised shipment test of exported legal wood. He explained that shipment test was a form of experiment in export procedures of goods accompanied by V-Legal document. This V-Legal Document was proof of wood legality as substitute to the endorsement mechanism carried out by The Forest Industry Revitalization Body (BRIK) as one of the required document for exported wood from Indonesia.

Through this experimental test, the Government and business people could make a review and to further improve so export of wood might run smoothly by the time the V-Legal Document mechanism was put in effect in January 1, 2013. This would show Indonesia’s readiness to export legal wood to the world’s wood market. Bayu explained that this shipment test would be exercised in 4 Indonesian harbors, i.e. the Belawan harbor in Medan, Tanjung Priok harbor in Jakarta, Tanjung Mas harbor in Semarang and Tanjung Perak harbor in Surabaya with export destinations in Uni Europe countries like England, Holland, France, Belgium, Denmark, Germany, Italy, Greece, and Cyprus.

The V-Legal Document as output of SLVK was effort of the Indonesian Government to protect the Indonesian wood industry from upstream to downstream whereby to penetrate the global market. By running shipment test it was expected that all factors which influenced export activities of SLVK-certified products could be monitored and anticipated. SLVK was expected to serve as strategic solution to step up comparative advantage of Indonesia’s wood products at the international market and as Indonesia’s contribution to environmental protection at global level. “We are optimistic that our export opportunity to Europe would be open wide” Bayu remarked.

Bayu mention that by 2009 the value of Indonesia’s wood export dropped but until 2011 export changed for the better because export of pulp was chalked up at USD 1.9 billion, paper USD 4.3 billion and wooden furniture USD 1.16 billion. By that advancement it was expected the next export value would increase even further. Increase of export value of 2011 jacked up the state’s return on sales. This was uplifted by Indonesia’s export of wood which was predicted at USD 10 billion.

In 2012 total export value of Indonesia’s wood products was still predicted to grow by around 5% - 6% compared to 2011. With the increasing export it was expected that farmers would continue to increasing their planting. In additional to that this increase motivated investors to increase their investment in reforestation. The increasing wood products Indonesia’s domestic products were being highly valued in the global market.  

Business News - December 14, 2012