HET Policy which is Only a Formality and Increase in Food Prices

Jakarta, CNN Indonesia —

The government is asked to take responsibility for spikes in food prices that exceed the highest retail price (HET) or reference price, especially during the fasting month and Eid as it is today.

In fact, the HET policy has changed. Most recently, there is a National Food Agency Regulation (Perbadan) Number 11 of 2022 concerning Reference Purchase Prices at the Producer Level and Sales Reference Prices at the Consumer Level for Soybean, Shallot, Red Chili Chili, Curly Red Chili, Beef/Buffalo Meat, and Consumable Sugar .

In addition, there is Regulation No. 5 of 2022 concerning Reference Purchase Prices at the Producer Level and Sales Reference Prices at the Consumer Level for Commodities of Corn, Purebred Chicken Eggs, and Purebred Chicken Meat. This regulation was set on October 5, 2022.



The price of eggs at the consumer level is set at Rp. 27 thousand per kg at the most, in accordance with the Ordinance Number 5 of 2022. In fact, the price of eggs has exceeded Rp. 29 thousand to Rp. 31 thousand per kg at the Kemiri Muka Market and Depok Jaya Market, as of March 29, 2023.

Then the reference price for fresh beef is set at Rp. 140,000 per kg for the hamstrings. However, the price of beef in the market is still high, breaking Rp. 160 thousand per kg.

The most viral is Minyakita, which is cooking oil made by the government. Even though the HET is set at IDR 14,000 per liter and IDR 28,000 for the 2 liter size, traders sell it at IDR 16,000-IDR 17,000 per liter and IDR 31,000 for the 2-liter version.

Agricultural observer and chairman of the People’s Rice Industry Community (KIBAR) Syaiful Bahari asked the government to take responsibility for this phenomenon.

According to him, the government must have predicted the factors of rising costs in the upstream sector so that it can make the right policy.

“So far the government has only taken shortcuts to maintain the HET. From year to year the approach has not changed. In the case of rice, it has finally taken the import route,” he told CNNIndonesia.com, Wednesday (29/3).

Syaiful said the government should make strict licensing regulations in situations of commodity scarcity, such as setting import quotas. Moreover, there is the potential for monopoly and buying and selling of import quotas which are rife amidst high prices.

“Often the regulations made by the government actually make the HET not work. Such as regulations and a long bureaucracy for the procurement of food commodities, which hinders the supply of adequate commodities and supplies,” said Syaiful.

According to him, HET is an important instrument that is also used to control inflation. The main objective of HET is to prevent price play in order to take high profits, when supply and demand are running normally.

However, Syaiful said that the government often sets HET without looking at the reality on the ground. He detailed three factors that made the HET ineffective, resulting in a spike in food prices.

First, the availability of goods decreases when demand is constant or higher. Second, there are factors that disrupt the supply chain in the form of monopoly and hoarding when production and supply are sufficient. Third, the increase in production costs which affects market prices.

Regarding the sanctions for traders who sell basic commodities above the HET or reference price, Syaiful said that was the authority of the Food Task Force and law enforcement officers (APH). However, he considered it irrelevant if traders had to be punished for selling staple goods above the HET.

“Unless they are hoarding goods. Is the right way to criminalize them, while the government has never improved the balance of supply and demand in the market?” Syaiful asked skeptically.

He asked that the HET not only be seen from the government’s interest in controlling inflation, but also from the interests of all related parties, such as farmers, processing industries, traders and consumers.

In a similar vein, the National Coordinator of the People’s Coalition for Food Sovereignty (KRKP) Said Abdullah strongly criticized the effectiveness of the HET set by the government. According to him, aspects of supervision and enforcement of rules are important keys to the effectiveness of the HET policy.

He alluded to HET which cannot be applied uniformly in all parts of Indonesia which are islands. This is because scarcity often occurs in certain areas and causes price spikes.

Regarding punishment, Said said producers or traders are usually only subject to administrative sanctions if they sell basic commodities above the HET. He regretted this because it was only a light sentence.

“If there is enforcement, it is not impossible that there will be a deterrent effect. At a later stage, if it causes shocks to food stability, it can also be pursued through legislation so that the sanctions are not only administrative, but can also be criminal,” he said.

Said emphasized that the effectiveness of the HET is largely determined by the design of the HET made by the government and law enforcement. He suggested that the HET continue to be corrected as needed by taking into account market dynamics and between regions.

HET determination does not match reality


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