Government Mandates Dairy Processing Industry to Absorb All Milk from Local Farmers
Minister of Agriculture Andi Amran Sulaiman successfully facilitated a meeting between dairy farmers, collectors, and the dairy processing industry, resulting in a government mandate requiring the industry to absorb all milk produced by local farmers.
“We have gathered the industry, farmers, and collectors. Everyone has agreed to work together,” said Minister Amran at a press conference held after the meeting at the Ministry of Agriculture headquarters in Jakarta on Monday, November 11, 2024.
The Ministry of Agriculture will adjust regulations to make it mandatory for the dairy industry to purchase milk from local farmers.
“All dairy industries must absorb milk from local farmers. We have agreed, signed, and sent notices to provincial and district livestock agencies for follow-up,” Minister Amran stated.
With this policy, the national dairy processing industry is required to purchase all milk from farmers, except for spoiled products. Minister Amran believes this policy will boost dairy farmers’ enthusiasm and productivity.
“We hope the industry, together with the government, will help support dairy farmers and improve the quality of domestic milk. This aligns with President Prabowo Subianto’s vision for the government to foster a partnership between the industry and farmers,” said Minister Amran.
Minister Amran emphasized that the Ministry of Agriculture will closely evaluate the policy’s implementation. Currently, import licenses for five dairy processing companies are being held until they fulfill their obligations to purchase milk from local farmers.
“I am confident that the industry will comply with our policy. However, if they refuse, we will permanently revoke their import licenses. This is our commitment to protecting farmers,” Minister Amran firmly stated.
This Ministry of Agriculture policy will soon be followed by a Presidential Regulation (Perpres) mandating the industry to absorb domestic milk production. The new regulation aims to reverse policies that have been in place since the 1997-1998 economic crisis. During that period, Presidential Instruction No. 2 of 1985, concerning the Coordination of National Dairy Development, was repealed in early 1998 in line with a letter of intent between the Indonesian government and the IMF. Since then, dependency on imported dairy products has sharply increased from 40 percent in 1997 to 80 percent today.
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