Jayanty Nada Shofa, Jakarta – The government's massive cuts to the beef import quota for private enterprises has sparked layoff concerns in the Indonesian meat industry.
The government initially let private enterprises to import 180,000 tons of beef this year. Indonesia later decided to reallocate 100,000 tons of the quota to the state-run enterprises. The abrupt transfer leaves private importers with just 80,000 tons or merely 44 percent of what was originally intended, according to the Indonesian Meat Traders and Processors Association (APPDI).
"This is such a huge decline. We have warned the government that not letting private enterprises to flourish would only lead to layoffs. With only around 40 percent of the original quota, there will be excess labor [at the meat companies] and of course, they might have to lay off some workers," APPDI's executive director Teguh Boediyana said at the Investor Market Today talk show aired by Beritasatu on Monday.
The job losses could further worsen the massive layoff problem that is spiraling across the country. Most recently, over 10,000 factory workers at the country's largest textile producer Sritex lost their jobs after the company ceased operations. Japanese electronics company Sanken Electric decided to shut down its Cikarang company, thus sending off over 450 workers to unemployment.
Teguh said: "We are supplying [meat] for hotels, restaurants, and catering.... Their business activities will certainly get interrupted. We hope that the government can review [the quota] policy."
World's largest Muslim majority nation Indonesia has entered Ramadan. The fasting month, alongside the upcoming Eid celebrations, are synonymous with higher consumption of beef due to specialties like the traditional spicy meat dish rendang. Teguh revealed some private enterprises had begun importing beef to secure supply for the Ramadan season, although he did not say how much of the foreign-grown meat had landed in Indonesia.
"But what will happen after June?... Reports claimed that the government would return the 100,000 ton quota back to private enterprises, a decision that businesses really welcome. But the government has not put those words into action to date," Teguh said.
"We want an equal treatment between the state-owned and private-run companies. They both contribute to the national economy.... A level playing field can lead to a better competition and eventually benefit the customers," he added.
The Central Statistics Agency (BPS) reported that the country's beef imports had totaled $61.2 million in January alone. About 73.5 percent of that imported cattle meat came from India, while Australia contributed to 15.7 percent of the imports. Aside from Ramadan, Indonesia's beef demand is on the rise as the rollout of the government-funded nutritious meals go on full swing.