Alert! Food Security In Threat, Fertilizer Prices And Weather Factors Make Everything Expensive

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - The Central Statistics Agency (BPS) reported that there was an increase in domestic fertilizer prices.

This was conveyed by the Head of BPS Margo Yuwono in a presentation held yesterday at his office.

According to Margo, this condition has an impact on the increase in production costs that must be borne by farmers.

"The production cost index and the addition of farmers' capital goods have increased. The dominant commodities that affect production costs include the increase in the price of urea fertilizer, NPK fertilizer and gasoline," he said when giving a statement to reporters quoted on Friday, June 3.

The Ministry of Finance (Kemenkeu) also agrees that this situation cannot be separated from the restrictive policies of a number of countries in securing their national supplies first.

"The increase in fertilizer prices can push up general food prices in line with restrictions on food and fertilizer exports in 10 countries," said Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu.

In fact, the state financial management institution has carried out a further outlook by stating that natural factors will also contribute to price formation in the future.

"In the future, we need to watch out for the wet dry season, which will lead to a decrease in the productivity of various chili peppers," said Febrio in a press statement today.

Previously, the Minister of Finance (Menkeu) Sri Mulyani had included the issue of food as one of three important things to watch out for in the dynamics of the economy.

“Economic recovery is happening. However, everyone understands that the crisis due to the pandemic was then followed by geopolitics. The potential impact could lead to an energy crisis, food crisis, and financial crisis in various parts of the world," he said at the DPR Plenary Meeting on the agenda for the 2023 RAPBN discussion earlier this week.

Citing data reported by BPS, in 2020 Indonesia was recorded to have imported 6.2 million tons of fertilizer with an estimated value of US$1.3 billion.

This number is higher than the realization of imports in 2019 which was 6.1 million tons. The top four countries that supply fertilizer to Indonesia are China, Canada, Russia and Malaysia.

Meanwhile, the Ministry of Finance until April 2022 is known to have disbursed Rp1.8 trillion as a fertilizer subsidy budget for 3 million tons.