"The price incentives come in the form of the soybean purchasing price set by taking into consideration the soybean growers production costs, impact (of soybean price hike) on inflation rate, and the soybean growers profits," he told in a press statement released on Wednesday.
Under the Trade Ministrys Regulation No. 84/M-DAG/PER/12/2013, the soybean purchasing price is subject to a quarterly review.
The minister added that the policy was adopted to decrease the dependence on imported soybean by providing farmers with price incentives to boost domestic production.
"Through this incentive, the farmers will be encouraged to grow soybean, and thereby increase the domestic soybean production," he claimed.
He explained that currently, the nation relied on imports to fulfill 60 to 70 percent of its soybean requirements.
Under the regulation dated December 31, 2013, the price of soybean bought from farmers is set at Rp7.5 thousand per kg for the period of January-March 2014.
Director General of Domestic Trade Srie Agustina emphasized that the soybean purchasing price had been raised from Rp7.4 thousand to Rp7.5 thousand per kg, partially due to the rising prices of soybean seeds and fertilizers, and the increasing productivity of soybean fields.
Since the policy was implemented, there has been an increase in the yield of soybean fields, she added.
According to the Central Statistics Agency (BPS), the nationwide productivity of soybean fields from September to December 2013 increased to 1.569 tons/ha from 1.355 tons/ha in the May-August period, thereby showing a rise of 15.8 percent.
Indonesias soybean consumption reached 2.5 million tons during 2012, while its production stood at 700 thousand tons, thereby prompting the country to import 1.8 million tons.
Indonesia depends heavily on the US for its soybean needs. According to the data received from the BPS, the country bought around 987 thousand tons of soybeans from the US or equal to 89.73 percent of its overall imports, totaling 1.1 million tons, in the period from January to July 2012.(*)
Editor: Heru Purwanto
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