Indonesia Food Traders Must Report Stocks or Face Sanctions: Lawmaker

A new food law in Indonesia will require traders of food staples such as soybeans, sugar and rice to regularly report stock levels to the government or face sanctions for hoarding, an influential lawmaker said on Monday.

Late last year, Indonesia’s president signed a food law intended to speed up self-sufficiency targets but which critics say will lead to greater curbs on imports and exports of staples, hinder overseas investment and push up prices.

The law put domestic output and demand and the control of imports, exports and price-setting at the heart of self-sufficiency efforts, but it left many details undecided, causing concern among food producers, traders and investors.

Part of the new law prohibits “hoarding or storing staple food”, a clause that may create greater risk and uncertainty for commodity traders who stockpile, traders and analysts said.

“It is no problem for commodity traders to keep staple foods in their warehouses, but they will have to report to the government,” Herman Khaeron, vice chairman of the Indonesian parliamentary committee for agriculture, forestry, fisheries and maritime, told Reuters.

“If they don’t report, there will be sanctions or penalty of hoarding,” added Khaeron, whose committee sets budgets and drafts new legislation, including the new food law. “This is to prevent speculators playing their game for their own profits.”

He said a new food agency will determine the levels of stocks that would be allowed to be legally held by traders, consumers, agents, and distributors. Khaeron was not able to specify how frequent the reporting requirement would be.

Indonesia is struggling to meet demand from a rising population of 240 million and is currently the world’s top importer of raw sugar, Asia’s largest buyer of wheat, and a top importer of rice and corn.

Major food importers or traders include US giant Cargill for soybeans and Singapore’s Wilmar for sugar, as well as global commodities trader Louis Dreyfus Commodities.
A farmer sorts rice seedlings in Gowa district, in Indonesia
A farmer sorts rice seedlings in Gowa district, in Indonesia's South Sulawesi province on Feb. 4, 2013. A new food law in Indonesia will require traders of food staples such as soybeans, sugar and rice to regularly report stock levels to the government or face sanctions for hoarding, an influential lawmaker said on Monday. Late last year, Indonesia's president signed a food law intended to speed up self-sufficiency targets but which critics say will lead to greater curbs on imports and exports of staples, hinder overseas investment and push up prices.

Food and agriculture imports and export policies in the archipelago have been criticized by its international trading partners.

Most recently, the United States filed a complaint at the World Trade Organization challenging Indonesia’s rules for imports of horticultural products, animal products and animals.

Agriculture contributes about 15 percent to the GDP of Indonesia, Southeast Asia’s largest economy, employing about 42 million people.

The new food law covers staple foods that have yet to be decided but will likely include corn, soybeans, sugar, rice and beef, said Khaeron, who is a member of the ruling Democrat Party.

The creation of a new “super body” was also included in the new food law, and Khaeron said there were several options under consideration.

These include merging Indonesia’s current food security agency with state procurement agency Bulog, bolstering or revitalizing state procurement agency Bulog, or creating a new institution similar to a new ministry that would answer directly to the president, Khaeron added

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