Last week, the Indonesian parliament passed historic laws to liberate its agriculture market from excessive state control, opening up its food trade and increasing the role of private sector.
Rainer Huefers, who leads a think tank named Centre for Indonesian Policy Studies (CIPS) in Jakarta, has been part of the voices demanding these reforms. Some of the highlights of these changes, as reported by CIPS, are worth consideration by Pakistan’s policymakers as the country is reportedly going to face another wheat, and probably sugar, crisis in a matter of weeks.
Like Indonesia, Pakistan is a populous country and thus agricultural policies have serious implications for the productivity of farmers and food security for consumers. Here is one part of these reforms, which are directly relevant to us.
Just like Pakistan, previously, Indonesian laws only allowed considering imports when domestic supplies were insufficient. The new Indonesian law:
- Acknowledges imports as a legitimate source of food (but also seeks to protect farmers, fishermen and micro and small food actors through tariff and non-tariff trade measures).
- Drops import restrictions as a strategy to support farmers and plans to boost domestic agricultural growth instead.
- Removes penalties on imported agricultural commodities when national stocks are considered sufficient.
- Permits imports of horticulture, livestock and animal products.
It is expected that Indonesian consumers will be able to get cheaper and more nutritional food as a result of these changes. Furthermore, these laws will encourage international investors to return to Indonesia and as a result more jobs will be created for the Indonesians.
Pakistan should seriously study these changes in Indonesia and should conduct an extensive review of its laws. In fact, if such reviews have been made, which is likely the case, then there should be a public discourse leading to policy changes.
Indonesian case of reforms indicate, solutions lie in letting go of unnecessary controls, not increasing them.
The impending wheat crisis in Pakistan, as evident from recent price hike and shortage of wheat, is an opportune moment. Let us not allow another crisis. Instead of bureaucrats and politicians, let consumers and farmers make decisions.