Government policies have not yet fully supported farmers and livestock producers. Rather than implementing policies that promote welfare, the government has allowed imported milk to enter the market without tax.
Recently, Indonesia agreed to the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) trade agreement. This agreement allows imported cow’s milk to enter with a 0% tax rate.
Naturally, this agreement disadvantages local farmers and contradicts the goal of advancing domestic food commodities.
Government Cannot Confirm Changes to the Agreement
Local farmers are calling for the government to amend this trade agreement. However, the government has yet to confirm any potential changes to this policy.
Deputy Minister of Trade Dyah Roro Esti was unable to specify if Indonesia could ratify the trade agreement with New Zealand and Australia.
Indonesia is also in negotiations over trade agreements with other countries.
Losses and Frustration Among Local Farmers
Recently, dairy farmers in Central and East Java protested against the failure of milk processing industries to absorb their milk production.
Farmers staged protests by spilling and bathing in milk. The cause was the inability of local milk to compete with imported milk.
The entry of milk from Australia and New Zealand without customs duties makes it cheaper than milk from other countries.
This has further pushed local milk products out of the market. Farmers are incurring losses, prompting them to protest to the government.
