Ir Ujang Sehabudin, MSi Lecturer of IPB University from the Department of Resource and Environmental Economics (ESL), Faculty of Economics and Management (FEM) also explained related to the turmoil of the increase in soybeans in the market that is troubling micro, small and medium enterprises (MSMEs) producers tofu and tempeh.

Ujang said that in terms of world soybean production, there is actually no production turmoil, but in terms of demand there is a considerable increase in demand (shock), especially from China as the largest importer of soybeans due to the impact of China’s recovery from the COVID-19 pandemic. With these conditions, coupled with low national soybean productivity, Indonesia is heavily dependent on imports because domestic production is unable to meet domestic demand.  In theory, if there is excess demand, then the price will increase, especially if the excesses are not able to be met from imports.

“The rising price of soybeans certainly hit the tempeh-tofu industry which is generally MSMEs as the main users of soybeans, which has an impact on the increasing cost of production.  To cover the rising cost of production, of course the selling price of the product (tempe-tahu) must be increased.  But it is not so easy to increase the price, because it is related to the purchasing power of the community especially during the COVID-19 pandemic where the community economy is experiencing a great decline.  Whereas all this time tempeh tofu is identical to cheap food. So, if the price is increased it will be counter-productive and it is proven that MSMEs tempeh producers know it is better to stop production for a while while waiting for the condition of soybean prices to fall again,” he said.

Therefore, efforts can be made to overcome the turmoil (rising) soybean prices can be done from two sides, the supply side and the demand side, both short and long term. In the short term, there needs to be a subsidy (government) to soybean importers such as import transportation cost subsidies, so that the price of soybeans in the domestic market can fall. But does the government have enough budget, and whether it is more priority than other subsidies, especially during the COVID-19 pandemic.

In the long run, it is necessary to encourage national production through intensification programs (productivity improvement). For example, the use of superior varieties, cultivation technology and efficacy (expansion / opening of new acreage). However, this expansion effort should be directed to abandoned land that has not been utilized instead of productive land such as rice fields.

Another policy is to subsidize the price (selling) of soybeans to farmers who produce soybeans. This is because the price of local soybeans is more expensive than imported soybeans, so local soybeans are difficult to compete with imported soybeans.

“A few years ago IPB University and the Ministry of Agriculture had developed a water saturated cultivation program (BJA) for soybean commodities in tidal areas in several provinces. In terms of production, it is quite successful even in Jambi Province to achieve the best productionivity of about 4 tons / hectare (national productivity ranges from 1-1.5 tons / hectare). At that time the government set the reference price of local soybeans Rp 7,700/kg, but in reality the price at the farmer level (middleman) is only Rp 6000-6500/kg, so the price is not profitable for farmers,” he explained.

The next policy is to find and develop alternative soybean substitution commodities, such as koro beans. This needs to be done in order to reduce dependence on imported soybeans, as well as develop locally typical commodities that are certainly more effective and have comparative advantages over imported soybeans.

“In addition, so that the volatility of increasing soybean prices can be resolved, in the meantime we can reduce the consumption of tofu-tempeh and replace it with products that are nutritionally equivalent,” he added. (IAAS/NAS)