Economist develops three-point strategy to manage soybean prices

Senin, 13 Agustus 2012 | 09:05

Suhardi, an economist from the University of Bangka Belitung, has suggested the use of three strategies that can be applied by the Indonesian government to stabilize soybean prices in the market."The first strategy involves using a soybean trade management system that helps prevent the creation of a monopoly, where traders cut soybean supplies to jack up prices," Suhardi said on Saturday.

The marketing system will be effective in ensuring an even distribution in the soybean market, which earlier might have been controlled by a person or a group of people.

"I do not know if such a monopoly run by a person or a group of people exists in the market, but I have approached the government through the relevant ministries and requested them to implement this system to immediately stabilize soybean prices in the market," he stated.

Outlining his second strategy, Suhardi said that the agricultural land used for soybean plantation needs to be revitalized for boosting future soybean production to meet domestic needs.

"The revitalization strategy needs to be adopted for the long term, so that a sliding domestic soybean production can be raised to meet the increasing demand at the national level."

Suhardi added that his land revitalization strategy requires the commitment of all decision-making bodies at the central and local government level.

Under the third strategy, the central and regional governments need to subsidize soybean farming and fix a minimum market price for farmers, which should encourage more of them to take up soybean farming.

"Farmers will then be able to sell their soybean produce at competitive market rates, as the government has already assured them of a minimum market price through its subsidy strategy," Suhardi said.

Current soybean prices have also been hurt by the short sighted nature of the government`s policies, which allow soybean imports for meeting the public and business lobby`s demands, as soon as domestic production falls, he added.

"I hope that the government is able to stabilize soybean production and prices through the implementation of these three strategies."