ISSN : 2598-8166

The Proceeding of the International Conference and Call for Paper on Trade
A New Paradigm in Trade Governance

Strengthen Global Competitiveness

The Proceeding of The International Conference and
Call for Paper on Trade 5th - 6th September 2017

These are the proceedings of the 1st International Conference and Call for Paper on Trade

ISSN : 2598-8166

Trade Analysis and Development Agency

Ministry of Trade Republic of Indonesia
 THE INTERNATIONAL CONFERENCE AND CALL FOR PAPER ON TRADE
“A NEW PARADIGM IN TRADE GOVERNANCE TO INCREASE DOMESTIC
EFFICIENCY AND TO STRENGTHEN GLOBAL COMPETITIVENESS”

Jakarta, 5-6 September 2017

ORGANIZING COMMITTEE:
Dr. Kasan, Ministry of Trade, Indonesia
Supardjo, MM, Ministry of Trade, Indonesia
Puspita Dewi, MH, Ministry of Tade, Indonesia

SCIENTIFIC COMMITTEE:
Prof. Abuzar Asra, Statistic Indonesia, Indonesia
Prof. Achmad Suryana, Ministry of Agriculture, Indonesia
Prof. Rina Oktaviani, Bogor Agricultural University, Indonesia
Prof. Vu Minh Khuong, National University of Singapore, Singapore
Achmad Shauki, Ph.D, Australia Indonesia Partnership for Economic Governance, Australia
Arianto A. Patunru, Ph.D, Australian National University, Australia
Chedtha Intaravitak, Ph.D, Thailand Development Research Institute, Thailand
Ernawati Munadi, Ph.D, Australia Indonesia Partnership for Economic Governance, Australia
Feryanto, MSi, Bogor Agricultural University, Indonesia
Fithra Faisal Hastiadi, Ph.D, University of Indonesia, Indonesia
Kiki Verico Ph.D, University of Indonesia, Indonesia
Dr. Maddaremmeng A.P, University of Indonesia, Indonesia
Ngov Penghuy, Ph.D, Nagoya University, Japan
Novia Budi Parwanto, Ph.D, Statistic Indonesia, Indonesia
Ramonette B. Serafica, Ph.D, Philippine Institute for Development Studies, Philippine
Dr. Wayan R. Susila, APU, Center for Agriculture and People Support, Indonesia
Zamroni Salim, Ph.D, Indonesian Institute of Sciences, Indonesia

Trade Analysis and Development Agency

Ministry of Trade, Republic of Indonesia
2017

i
 TABLE OF CONTENTS

INVESTMENT POLICY REFORMS TO IMPROVE THE EFFICIENCY 1-18

OF INDONESIA’S TRADE LOGISTICS COST TO ASEAN REGION
Ari Mardiansyah

ANALYSIS OF THE EFFICIENCY OF PORT INFRASTRUCTURE 19-30

AGAINS INDONESIAN-APEC BILATERAL TRADE FLOW
Piety Yusyahbella, Arief Daryanto

IS INDONESIA IMPORT CHANNELING MANAGEMENT 31-42

APPROPRIATE?
Akhmad Firdiansyah, Ario Seno Nugroho

TOTAL FACTOR PRODUCTIVITY GROWTH (TFPG) OF INDONESIAN 43-64

MANUFACTURING INDUSTRY IN INDONESIAN PROVINCES: TIME-
VARYING TECHNICAL EFFICIENCY – STOCHASTIC FRONTIER
ANALYSIS
Dadang Ramdhan, Anil Mishra, Dilupa Nakandala

FOOD PRICE POLICY ON LIVESTOCK PRODUCT IN INDONESIA 65-78

Yati Nuryati, Avif Haryana

EVALUATION OF THE BENEFITS OF BONDED LOGISTIC CENTER 79-88

IN SUPPORTING INDUSTRY COMPETITIVENESS
A. Haryana, D.W Prabowo, Y. Nuryati, R.T Cahyono, R.B Setiawan

ANALYSIS OF LOCAL GOVERNMENT POLICY TO SUPPORT 89-100

SMALL-MEDIUM FARMERS ON POULTRY SECTOR
Rahayu Ningsih, Dwi Wahyuniarti Prabowo

NEXUS ON INDONESIAN COMMERCIAL DIPLOMACY:DEVELOPING 101-120

INDONESIAN SMEs THROUGH ASEAN VALUE CHAINS
Rio Nurhasdy, Rizki Rahmadini Nurika, Septian Nur Yekti

ASSESSING ROLE OF LOCAL GOVERNMENT IN BORDER 121-134

AREA TO FACILITATE SMEs EXPORT: CASE STUDY OF
TANJUNGPINANG CITY’S POLICY
Sayed Fauzan Riyadi

PATENT ANALYSIS ON CANNING TECHNOLOGY TO SUPPORT 135-150

DEVELOPMENT SMALL MEDIUM ENTERPRISES
Tommy Hendrix, Anang Hidayat

STRENGTHENING COMPETITIVE POWER TRADING THROUGH 151-160

IMPROVEMENT OF NATIONAL LOGISTICS TO SMEs EXPORTS IN
GLOBAL VALUE CHAIN
Haris Eka Sidharta, Zaidatun Nihaaiyyah

ii
THE IMPLEMENTATION OF CROWDFUNDING-BASED OVOB 161-172
PROGRAM: AN IMPROVEMENT EFFORT OF GLOBAL
COMPETITIVENESS IN MSME OF INDONESIA
Asep Setiawan, Rizki Hamdani

STRATEGY TO INCREASE THE COMPETITIVENESS OF SMEs AND 173-188

THEIR INTEGRATION INTO GLOBAL VALUE CHAIN
Restia Christianty, Ratnaningsih Hidayati

ECO-FRIENDLY GLOBAL VALUE CHAIN: HOW INDONESIAN SMEs 189-206

EXPAND THEIR BUSINESS WHILE MAINTAINING SUSTAINABLE
DEVELOPMENT
Rizki Rahmadini Nurika, Ridha Amaliyah

THE EFFECT OF INDONESIA SMEs PARTICIPATION IN GLOBAL 207-238

VALUE CHAIN TO ENHANCE COMPETITIVENESS
Anang Hidayat, Mauludin Hidayat, Tommy Hendrix

IMPACT OF ONLINE TRANSPORTATION PHENOMENA AGAINST 239-256

THE TRADE MOBILITY EFFICIENCY IN JAKARTA
Adhitya Saputra Subargung

STUDY ON THE IMPACT OF ICT DEVELOPMENT AND 257-272

GOVERNMENT EXPENDITURE FOR ICT ON INDONESIAN
ECONOMIC GROWTH
Neli Agustina, Setia Pramana

SECURE E-COMMERCE (SEC) TRUSTMARK CERTIFICATION 273-292

TO IMPROVE CUSTOMER’S TRUST ON ONLINE SHOPPING IN
INDONESIA
Ika Yuni Wulansari

INFORMATION AND COMMUNICATION TECHNOLOGIES FOR 293-306

WOMEN’S BUSINESS: PROSPECT AND POTENTIAL IN INDONESIA
Isyfi’afiani

FACEBOOK ADS AS PROMOTIONAL TOOLS FOR MICRO, SMALL, 307-322

MEDIUM ENTERPRISE
Wicaksono Febriantoro

CONSTRUCTION OF NON-PENAL EFFORTS TO PREVENT CYBER 323-332

CRIME ON E-COMMERCE
Nikmah Rosidah, Chaidir Ali

INTEGRATED INFORMATION SYSTEM TO INCREASE 333-348

EFFICIENCY AND COMPETITIVENESS SMALL AND MEDIUM–
SIZEDENTERPRISES (SMEs)
Dwi Ismiyaningsih, Eva Violeta

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DOES INTELLECTUAL PROPERTY CONTRIBUTE IN ECONOMIC 349-358
PERSPECTIVE OF TECHNOLOGY TRANSFER?
Y. Isnasari, V.S. Susirani

OPENING A NEW TRADE DEALS THROUGH MULTILATERAL

COOPERATION TO ACHIEVE TRANSCENDED BOUNDARIES ON 359-380
MOVEMENT OF PEOPLE AND GOODS
Edy Santoso

THE ROLE OF INFORMATION AND COMMUNICATION 381-400

TECHNOLOGY (ICT) ON THE ORGANISATION OF ISLAMIC
COOPERATION (OIC) COUNTRIES’ TRADE DEVELOPMENT
Aditya Rangga Yogatama

POTENTIAL COST AND BENEFIT ON ASIA PACIFIC FREE TRADE 401-412

AGREEMENT (FTA-AP) FOR INDONESIA
Aziza Rahmaniar Salam, Ridho Meyrandoyo Hastjarjo

ANALYSIS OF PRIORITY COUNTRIES AND PRODUCTS FOR 413-430

INDONESIAN EXPORT DIVERSIFICATION IN LATIN AMERICA
Febria Ramana, Lili Retnosari

THE EFFECT OF AUSTRALIA’S NON-TARIFF MEASURE ON 431-444

INDONESIA’S EXPORT
Endah Ayu Ningsih, Palupi Lilindiasari S

THE EFFECT OF TRADE ON INEQUALITY AND POVERTY 445-466

ALLEVIATION
Ade Marsinta Arsani, Pardomuan Robinson Sihombing

ANALYSIS OF COMPETITIVENESS AND DETERMINANTS OF 467-476

EXPORTS OF INDONESIA’S LEADING COMMODITIES TO THE
AFRICAN REGION
Reza Imam Prakoso, Rina Oktaviani

POSSIBILITY AND THE IMPACTS OF BILATERAL TRADE 477-496

AGREEMENT BETWEEN INDONESIA-SOUTH AFRICA AS NEW
STRATEGIC TRADE PARTNER
Agung Romy Hasiholan, Siti Rizki Ashfina R.S, Winda Khairani Ningtyas

HOW INDONESIA GETTING BETTER ACCESS IN CANADIAN 497-506

MARKET: CASE OF FISH AND PROCESSED FISH PRODUCTS
Rahayu Ningsih

REPEALING CIRCUMVENTION AGAINST ANTI-DUMPING ACTIONS 507-518

IN INDONESIA: CASE STUDY OF EXISTING CONDITION IN
SELECTED STEEL SECTORS AND BENCHMARKING FROM WTO
MEMBERS’ BEST PRACTICES
A.P. Alhayat, A. Muslim

iv
THE IMPACTS OF CRUDE PALM OIL AS ONE OF DEVELOPMENT 519-532
PRODUCTS ON TRADE AND INVESTMENT
Widyastutik, Oktaviani R, Syaukat Y, Puspitawati E, Panjaitan D,
Amaliah S, Probokawuryan M

EXPORT PERFORMANCE ANALYSIS OF INDONESIA’S MAIN 533-546

COMMODITY TO MIDDLE EAST IN THE PERIOD OF 2010-2014
Didit Prasetya, Rina Oktaviani

THE EFFECT OF IMPORTED RAW MATERIAL ON FIRM TO EXPORT 547-556

(CASE OF FOOD PROCESSING SECTOR)
Amzul Rifin

STRATEGY OF INDONESIAN RUBBER DEVELOPMENT TO 557-574

INCREASE EXPORTS: SWOT ANALYSIS
Dian Dwi Laksani, Kumara Jati

THE POTENTIAL OF TRADE COOPERATION BETWEEN INDONESIA 575-586

AND SOUTH AFRICA
Wibowo Kurniawan

COMPETITIVENESS ANALYSIS OF COCOA AND THE AFFECTING 587-618

FACTORS OF INDONESIAN COCOA EXPORTS IN MAIN EXPORT
DESTINATION COUNTRIES
Ervina Novia Sari

THE INCREASING OF INDONESIAN MARKET ACCESS THROUGH 619-636

BILATERAL TRADE COOPERATION
Winda Edelwis Zedilla

DOES TRADE OPENNESS JEOPARDIZE LOCAL INDUSTRY? 637-648

Ario Seno Nugroho, Mohammad Fachrudin, Fardhani Hamiputri Akhzan

THE IMPACT OF MULTILATERAL TRADE AGREEMENTS TO THE 649-662

COMMODITY TRADE FLOWS (CASE STUDY : INTERNATIONAL
PALM OIL TRADE)
Riska Pujiati

ANALYZING AVAILABILITY AND COMPETENCY OF ACCREDITED 663-682

TESTING LABORATORIES FOR IMPROVING COMPETITIVENESS
OF INDONESIAN EXPORT CASE STUDY: NUTMEG
Moh. Teguh Eko Yuli Setiya, Ima M. Zainuddin, Endang Sukara

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 FOOD PRICE POLICY ON LIVESTOCK PRODUCT IN INDONESIA

Yati Nuryati, Avif Haryana

Trade Research and Development Agency, Ministry of Trade, Jl MI Ridwan Rais No.5 Jakarta Pusat
10110, Indonesia, y_nuryati@yahoo.com ; vifhary@gmail.com

Abstract
Price stabilization of food policy is one of the issues in government policy. Various
regulations emerged that the essence was to keep the price increases manageable and
stable and have minimal impact on inflation. Similarly, for pricing policies related to livestock-
based food commodities. This paper aims to analyze the possibility of applying pricing
policies on basic commodities in Indonesia for livestock-based food products. The method
used is descriptive quantitative to study (producer side): profitability of farming and
production growth; (consumer side): the role (share) of public spending on commodities,
commodity share on inflation and price variations at the consumer level. The results of
analysis show that not all food commodities get the same pricing policy and need to look at
strategic aspects of the commodity such as its role to inflation, the large share of public
expenditure on food and the fluctuation of commodity prices. The price policy on livestock-
based food commodities is precisely on the commodity of beef reference price at farmer and
consumer level; The policy of reference prices on the chicken and chicken egg commodities
specified is the reference price at the producer level by improving the market structure
through market segmentation and institutional improvement as well as special pricing
policies for livestock products. Meanwhile, special price policies are applied to beef, chicken
meat and eggs only at the time of and during National Religion Celebrate (HBKN).
Therefore, it is necessary to have an institution that plays a role in monitoring and evaluation
and enforcement of legal sanctions explicitly written in a technical regulation at the ministry
level to reduce speculation actions that can create inefficiency in the market.
Keywords: Food Policy, Livestock Product, Price Fluctuation
JEL Classification: E31, Q13, Q18

INTRODUCTION that has high protein content and is

Livestock sector is one of strategic widely consumed by the community.
sectors in Indonesia as its contribution Currently, the affordability of public
to household income is about 50% access to these products is disrupted
(FAO, 2011 in Soedjana, 2013). One of due to high prices. According to
the main issues on livestock products is Soedjana (2013) that consumption
high and unstable prices, especially participation rates for livestock products
during the National Religion Celebration in 2011 were beef by 15.24%; chicken
(HBKN). The increase in food prices meat (48%) and chicken eggs (52-75%).
before fasting and Eid is on average Due to this factor, price
between 10-15%. Livestock products stabilization has become priority to
(e.g.: beef, chicken meet and chicken government's policy agenda. A stable
eggs) are part of a staple food product and controlable price will have positive

65
contribution to manage inflation as well country under control and stable and
as national economy. According to contribute to small inflation. Price of
Ilham (2006) and Besanko & policy has been regulated by UU No.
Braeutigam (2011) there is several 7/2014 about Trading and Presidential
factors that need to be considered in Regulation No. 71/2015 about definition
determining the pricing policy. There and storage of staple goods and
are the selection of priority commodities, necessary goods. Beside that, there is
supporting policies (buffer stock, market regulation on the livestock sector has
operations and export/import), and also been issued for example the
institutional. Currently, an increasingly regulation of the Minister of Trade,
open world on food trading system has Permendag No.59/M-DAG/8/2016 about
caused domestic food products to be the provision of export and import of
difficult to manage as a result of the animals and animal products. This
transmission of international price regulation has aims to price stabilizarion
situations, such that also happen on in domestic market. How are the
livestock products. Various problems regulation can be implemented to
that occurs in the country such as manage food price. Therefore, this
production and distribution problem has paper aims to (a) analyze the
also caused food prices, in particular application of price policies on livestock
staple food such as beef, chicken meat products and (b) formulate the price
and chicken eggs become unstable. In policy that can be proposed on livestock
addition, the annual occasion of products.
National Religion Celebration (HBKN) METHODS
raises the price speculation that causes
This paper utilises descriptive
the price of livestock products every
quantitative analysis to assess the
year tend to rise. Theoretically, food
profitability of farming and production
prices including the price of livestock
growth; the role (share) of public
products are determined by supply
spending on commodities, the share of
(local and/or imported), demand, price
commodities on inflation and variations
situation in the international market.
in commodity prices at the consumer
In recent years, various
level. The analysis is conducted
regulations had been issued in
simultaneously because this research is
Indonesia to keep food prices within the

66
closely related to social dynamics such analysis is conducted to calculate price
as policy and dynamics of numerical fluctuations. Volatility/Fluctuation is a
variables such as price development, temporal variation. One of the simplest,
the share of public expenditure for food, but commonly used quantitative
the share of food inflation, price measures, is the standard deviation and
fluctuations and fluctuations in coefficient of variation.
production. The standard deviation formulations are:
In theory pricing policy needs to
Standard deviation is:
pay attention to the interests of 2
n
 n 
n Pt 2    Pt 
producers and consumers. The t1  , .....................(1)
STDEV
 t 1

n  n  1
selection of commodities also need to
considere both producers and n : Number of observations

consumers perspective. The selection of While the coefficient of variation (CV) is:
STDEV ...................….....……. (2)
commodities according to producer side CV 
Mean
need to consider farming profitability,
Then the volatility / price fluctuations
price fluctuations at the producer level
can be calculated as follows:
and production growth. Selection of
Price volatility ( )
commodities from the consumer side by
..............(3)
considering the share of public
Where:
expenditure, contribution to inflation,
: average rate of price
price fluctuations at the consumer level
volatility in n years
and government policy (publication).
unit (%)
Considering the completeness of the
: number of years from
data required and its urgency, this paper
up to
mainly focuses only on selection of
: Coefficient of variation
commodities from the consumer
= (standard deviation /
perspective. There for, the required
average)
variables are the expenditure share as
Selection of commodity priorities
well as the share of staple food
use a matrix to map the commodity
commodity on the inflation which are
base on same variables and then
available in the publication of BPS. The
identified priority of commodi

67
Table 1. Commodity Identification Matrix

No. Commodity Score Rank

...... ...... ...... ......
1 A (ranking: ...) (ranking: ...) (ranking: ...) (ranking: ...)
...... ...... ...... ......
2 B (ranking: ...) (ranking: ...) (ranking: ...) (ranking: ...)
...... ...... ...... ......
... ... (ranking: ...) (ranking: ...) (ranking: ...) (ranking: ...)
...... ...... ...... ......
(ranking: ...) (ranking: ...) (ranking: ...) (ranking: ...)
N N

The next stage is determining and cost structures. Livestock

the type of price policy on these
commodities using both fundamental
and price approach. Fundamental
approach aims to calculate
fluctuation of production, while price
approach aims to calculate the price
fluctuations of each commodity.
Data
This paper uses secondary time
series data for period of 2009-2016.
The data is obtained by Statistics
Indonesia (BPS), Ministry
Agriculture, Ministry of Trade and other
literature sources. The data includes
price of livestock product, the share of
livestock product to inflation (BPS
publication), the share of household
expenditure (rural and urban) which
devided into low-income households
(40%), moderate (40%), high (20%)
(Susenas, 2012), livestock production
commodities refer to the commodities
listed under the Presidential
Regulation No. 71/2015 on staple food
the which covers beef, chicken meat, and
chicken eggs.
RESULTS AND DISCUSSION
Characteristic of Livestock Product
Consumption to Food expenditure
Livestock product commodity
generally is a staple food of society. As
a staple food, this commodity certainly
has an important role especially for the
of
intake of animal protein. Therefore, the
consumption patterns replace each
other when one of them experienced a
high enough price increase, such as
beef replaced with chicken meat and
or chicken eggs. In certain conditions,
there was an increase in consumption
was quite high, especially before the
fasting and Eid month.

68
 Consumption (Kg per capita/years)
Kg-LHS Kg-RHS
0.50 35.00
0.45
30.00
0.40
0.35 25.00

0.30
20.00
0.25
15.00
0.20
0.15 10.00
0.10
5.00
0.05
0.00 0.00
2009 2010 2011 2012 2013 2014 2015

Beef -LHS Chicken -RHS Egg -RHS

Figure 1. Consumption per Capita for Livestock Product

Source: Susenas-BPS (2016), Processed

The pattern of public income group 1-4, the share of food

consumption of livestock products expenditure increased from 2002 to
would affect the amount of public 2012. Meanwhile, people with income
spending on food. Within 10 years, in groups of 5-8 (middle income) and
there was a change in the groups of 9-10 (high income) share of
characteristics of food consumption to food expenditure decreased and
expenditure as reflected in the share of Switch on non food. The implication,
public expenditure on food. There was the price of livestock commodity
an increase in the percentage of public products that continue to increase
expenditure on food both villages and would have an impact on the
cities from 66.06% (2002) to 68.04% community, especially income groups
(2012). People with income in the category 1-4 (low income).

69
Table 2. Share Household Expenditure of Food Base on Income groups
Group of 2002 2012
Income Urban Rural Total Urban Rural Total
1 61.30 67.40 66.06 62.18 68.73 68.04
2 60.31 67.33 65.48 62.69 69.67 67.75
3 59.41 66.97 64.7 61.08 70.11 66.08
4 58.42 66.47 63.59 59.09 67.06 63.76
5 57.19 65.69 62.4 57.13 64.93 61.80
6 55.68 64.67 60.92 54.58 63.1 60.04
7 53.73 63.27 58.96 52.32 61.53 57.89
8 50.88 61.37 56.52 49.61 59.9 55.40
9 46.78 58.69 52.25 45.22 57.55 50.84
10 30.79 43.94 35.31 30.69 43.29 34.95
Sources: Susenas-BPS (2012), processed

Performance and Price Stability (Figure 3). In general, the factors that
Livestock Product influence the price increase on the

Price is one of the factors that commodity are due to lack of supply.

influence the society osdalam doing In beef, price increases are due to (i)
beef self - sufficiency programs
food consumption (livestock product).
Livestock products (beef, chicken and established since 2010 are considered

egg) are substituted or even unsuccessful and (ii) the acceleration

complementary food. During 2009- of slaughter of ready-to-cut cattle

2016, commodity prices of livestock resulting in scarcity. This condition

products at retail level tend to be encourages the importation of cattle

and beef continues to increase. In
positive trend. In the beef, since mid-
chicken meat and eggs, the price
2012 prices began to rise and continue
increase due to lack of supply is
to increase until now. Price increases
caused by (i) the production of chicken
in beef will certainly have an impact on
meat and eggs many, but many are
the demand for beef and eggs are also
dominated by big companies (from the
high, because these two commodities
as a substitute for animal protein from upstream side) which tend to oligopoly
while the cultivation is mostly done by
beef. Psychologically, the high
demand on chicken meat and eggs small farmers, (Ii) rising food prices

causes prices to rise too. The pattern due to the scarcity of corn raw
materials, and (iii) limited land
of price movement in chicken meat
resources in the development of
and chicken eggs is slightly different
poultry. In addition to the factors
from the price movement in beef

70
mentioned above, the dynamics of
prices in international markets and
government regulations also affect the
instability of the price of livestock
products. According to Boussard, et al.
(2006), the factors affecting price
instability can be factors derived from
the endogenous instability associated
with the excessive expectations of
commodity market participants.

120,000
IDR/kg

100,000

80,000

60,000

40,000

20,000

0
2009 2010 2011 2012 2013 2014 2015 2016

BEEF CHICKEN EGG

Figure 2. Livestock Product Price Development

Source: BPS, processed
In the current conditions, unstable price stability. The movement of price

price can not be avoided. The fluctuations of basic food commodities

stable/controlable price and the between time during the year 2011-

relatively cheap price level become the 2016 looks smaller, but still at a high

ideals of government, business actors price level. In certain period of

and society. According to Byaerlee, et movement of price fluctuation of

al. (2005); Boussard, et al. (2006) and livestock product is high enough that
during year 2013 and beginning and
Boussard, (1996), pricing factors as
middle of 2015, beginning of year 2016
well as international issues and market
expectations beyond government price fluctuation start to shrink.

control often indirectly affect domestic

71
 16
MA-CV (%)
14

12

10

0
2011 2012 2013 2014 2015 2016

BEEF CHICKEN EGG

Figure 3. Movement of Food Commodity Price Fluctuation

Source: BPS, processed

Determination of Livestock Product expenditure as a combination factor to

Price Policy
describe the level of people's
Food price policies based on
purchasing power.
livestock products could be determined
Table 3. Inflation Contribution,
by considering the interests of
Coefficient of Variation and
consumers and the interests of
Share of Household
producers. Consideration of consumer
Expenditure on Livestock
interest in principle to maintain the
Products, 2009-2016
purchasing power of consumers, while
Share to Coefisien of Share to
the consideration of the interests of Commodity Inflation Variation Household
(%) (%) Expenditure(%)
producers associated with maintaining Beef 0.08 4.14 0.76
profitability of farming/livestock so as Chicken meat 0.10 8.00 2.23
Chicken Egg 0.04 5.77 2.35
to remain farming/livestock. In
Source: BPS, processed
determining commodities based on the An important source of animal
interests of consumers there are three protein commodities for consumers is
things that need to be considered, chicken meat. In terms of inflation
namely the share of inflation, share, its value was greatest after
coefficient of variation in commodity beef, even the price fluctuation rate
prices at the consumer level and share was quite high. While from the share of
of household expenditure. Inflation household expenditure, relatively high
share and share of household level of both livestock products. When

72
compared with the share of and chicken eggs during fasting and
expenditure for chicken eggs did not Eid will increase about 20-25%
vary much and with higher beef. The (Gapuspindo, 2016)
condition showed the commodity of High price fluctuations,
chicken meat had the urgency to get especially in the price of chicken meat
attention in price stability, then chicken and chicken eggs, caused by the
egg and beef. pattern of production and stock of the
During 2009-2016, the share of commodity that fluctuates. In addition,
food-based livestock food production and consumption centers
commodities, especially beef, chicken were also a factor in the distribution of
and chicken eggs were quite high. This these commodities. The sharp inter-
commodity was part of volatile food in season production and supply
national inflation grouping. Price fluctuations due to the less-distributed
fluctuations of the commodity with production centers spread across the
substantial share means that it should region and the high consumption of
be kept so high that price control chicken and chicken eggs is one of the
policies were important in order to substitutes of animal protein intake at
minimize their impact on national a time when the price of beef was
inflation. One of the roles of price more expensive. It could be seen from
stabilization policy was the controlled the share of expenditure and the share
commodity prices and the smooth of inflation for chicken meat and
supply and distribution channels. chicken eggs was quite high (Table 3).
Fluctuations in food commodity The more fundamental issues are
prices were influenced by increased actually on the production side,
consumption/demand patterns especially those associated with the
especially on religious holidays, culture very low incentives experienced by
in the community as well as small independent farmers. This was
production/supply quantities. The related to the price of feed that
effect of increased demand on increased significantly, while the
National Religion Celebrate (HBKN) selling price of its products did not
was more dominant in the prices of increase significantly because the
livestock products, especially beef. increase in price of chicken meat at
The demand for beef, chicken meat the retail level was not transmitted

73
properly to the price of chicken in the the institutional aspect by encouraging
level of small farmers (farm gate large scale farmers to play more in the
price). export market. While independent
The control of commodity prices small-scale farmers needed a policy
means that to minimize the fluctuation that allowed the development of
of the price that occurs at a certain breakthroughs to be able to reduce the
tolerance limit that did not harm cost of procurement of feeds through
consumers or producers and keeps the utilization of local resources.
fluctuating all the time. Price of The policy for beef commodities
commodity that controlable had an that must be taken was the
effect on the intermediate price determination of the right price level as
changes between time being minimal a reference in determining the import
and contribute to low inflation. The and the highest retail price at the
fluctuation of commodity prices could consumer level, especially in the lead
be minimized through the regulation of up to the National Religion Celebrate
production and the time of imports in (HBKN). In line with the policy, the
meeting the demand that the numbers existence of a conducive policy in
tend to increase, in the medium and encouraging people's consumption
long term could reduce the role of pattern from fresh beef to frozen beef.
these commodities in inflation. The Table 4. Implementation of Special
supply of beef commodities in the Price Policy at HBKN
country still needs additional supply Commodity of
Presidential
No Regulation No.
Control Law Enforcement Explanation

from imports so that the timing of

71/2015
√ X X
The commodities It is Difficult Because: Generally traders in the Sanctions

imports was very important to maintain Tradition

traded are diverse,
including food items
The number of traders in the
market people are very much.
market people do not have a
business license, making it
not settle
yet.
in accordance with Traders are worried about not difficult to apply sanctions.
al Presidential getting special pricing
domestic price fluctuations, especially Market Regulation No.
71/2015
information

to keep supplies during fasting and Eid

√ √ √

period. Modern
The commodities
traded are diverse,
Special pricing information
can be conducted in all region
in Indonesia
Has a business license that is
a modern retail business
license (Ijin Usaha Ritel
Market including food items
Modern/IUTM).

Based on the results of analysis

in accordance with
Presidential
Easier application of
Regulation No.
sanctions, such as revocation
71/2015
of business permits.
from the producers and consumers
Sources: Discussion Result
side, it was found that the policy of
According to Tabel 4, show that
chicken and chicken egg prices was
the special price should be
more on the reference price policy at
implemented in modern retail/modern
the farmer level by taking into account

74
market. It is easier to monitoring than accompanied by an adequate
traditional market. institutional system, therefore the
Price control by the government impact of the policy was short term
had been done by many countries in
order to maintain the availability of
important food and prevent price
fluctuations in the shortage
(Thuraisingham, 2010). Developed
and developing countries had laws and
regulations concerning price
regulation. Malaysia had the Price
Control Act 1946 and the Control of
Supplies Act 1961; The Philippines Figure 4. The Role of Institution in
had The Price Act (Republic Act 7851); Food Price Policy
Singapore with the Price Control Act,
only. According to Ostrom (2011) in
Chap 244; Thailand the Price Fixing
the implementation of price policy has
and Anti Monopoly Act 1979 and the
at least an institutional function of
'Price Lists' of the Ministry of
policy formulation, monitoring,
Commerce and Internal Trade
coaching, data processing & the
Departments; Bangladesh with The
implementation of food information.
Essential Articles Act 1953. Price
The most important function was the
control in Indonesia refers to under
monitoring function. The function of
regulation UU No. 7/2014 about
monitoring had an important role in the
Trading and Presidential Regulation
implementation of policy. Next, is the
No. 71/2015 about definition and
function of coaching and function of
storage of staple goods and necessary
policy was makers. These functions
goods.
are inter-related and require solid
Institution refered to in this
coordination in building a more
research was from the aspect of the
implementative policy. Discussion
rules of game. Institutional was a
results showed that the
factor supporting the effectiveness of a
implementation of price policy was still
pricing policy. In previous experience,
weak because it had not been
the pricing policy had not been

75
supported by monitoring function, special price policy are can be applied
coaching and policy formulation. Price to the beef, meat and chicken eggs.
policy also needed to be supported by The implementation of this policy
accurate data and food information during National Religion Celebration
and function of the implementer. It also (HBKN). The price policy of livestock
needed to be supported by law products also needs to be supported
enforcement from the side of the rules by monitoring functions, coaching and
enforced by the government in written policy formulation. Therefore, it is
technical regulations. necessary to monitor price periodically
to provide market information system /
CONCLUSION AND POLICY
price, market operation and
RECOMMENDATION
enforcement of legal sanction by
Price policy can reduce
clarifying the rules of game from
fluctuations in the price of high animal
existing regulations.
products. Considering the some
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