Jump in World Food Prices Disrupts Price Stabilization Program
Wednesday, 27 February, 2008 | 17:30 WIB

TEMPO Interactive, Jakarta: The government has acknowledged that the food price stabilization policy cannot return prices to their previous levels.

This is because recent crude oil price increases have also lifted food commodity prices that cannot be lowered only by fiscal policies.

Therefore, the government is focusing on helping people on low incomes.

One way is by allocating budget funds through a cheap cooking oil market for the next six months starting this March.

“The government will continue to analyze policies. We'll do anything in order to lower the burden on low-income people,” said Trade Minister Mari Elka Pangestu, Wednesday (27/2) after watching the sales of cheap cooking oil in Kalianyar Subdistrict, West Jakarta.

As already reported, early this month the government issued a package of food price stabilization policies.

This included warranting value-added tax on packaged cooking oil and wheat flour as well as exempting soybean from import duty.

Mari said the potential losses of state revenue due to the fiscal relaxation were not automatically comparable to the high food prices as an indicator of the price stabilization program's success.

ARIYANI