"So, we have to pay attention to this problem."
Jakarta (ANTARA News) - Chief Economic Minister Hatta Rajasa has asked the ministry of agriculture and the ministry of trade to improve a number of regulations on horticultural products, including onions in an effort to stabilize price fluctuations.

"I appeal to the agriculture and trade ministers to meet as soon as possible so that they could improve the agriculture and trade ministers` regulations, particularly with regard to garlic so that supply would meet demand," the coordinating minister for economic affairs said at the Presidential Office here on Wednesday.

Hatta said that import restriction on garlic was not at the correct time now because farmers at home could only supply about 5 percent of the domestic need.

"It is quite unreasonable if garlic price contributed 0.17-021 percent of the inflation in February which was 0.75 percent. We should therefore, overcome this problem through a bilateral meeting between the minister of agriculture and the minister of trade today," Hatta said.

The result of the bilateral meeting should be taken to the coordinating minister for economic affairs to be discussed. The essence is that supply in domestic market must be met, Hatta said.

He said that the policy to restrict import was not wrong but a policy should be taken by taking into account the existing conditions so that its impact would not cause market distortion.

"If market distortion takes place it will drive up prices and increasing prices will generate inflation. So, we have to pay attention to this problem," he said.

He said for now the market must be supplied and demand should be monitored so that it should not happen that the shortage of supply would generate inflation and lower the people`s purchasing power due to high inflation.

"This step should be taken without necessarily reducing the intention to achieve self-sufficiency goals and to empower our farmers," he said.

The government early this month was surprised by the rate of inflation in February which was quite high recorded at 0.75.

Hatta Rajasa said "I have predicted it would be quite high but it was beyond expectation that it reached 0.75 percent."

He said January to February is a scarcity season that always causes inflation but the inflation in February was not caused by a hike in the price of rice but the price of horticultural products.

"Usually the scarcity is connected with rice but this time the price of rice was stable. The inflation hike was caused more by horticultural products," he said.

He said the government would monitor the products` supply and demand and if the demand rose sharply he would increase supply. "This must be overcome quickly."

According to the Central Bureau of Statistics the February inflation was the highest in the same month in the past ten years.

The rate of inflation in January was recorded at 1.03 percent so to make the inflation in the calendar year at 1.79 percent.

One of the causes of the high inflation in February was the policy to limit imports of horticultural products.

The highest inflation in February was last recorded in 2002 at 1.5 percent.

After that it stood at an average of 0.3 percent. Even in 2012 the inflation was recorded at 0.05 percent.
(Uu.A014/B003)

Editor: Priyambodo RH
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