Legislator Criticizes Tax-Free Policy on Milk Imports
The tax-free import policy on milk has sparked protests among local dairy farmers, who feel the policy favors imported milk over domestic production. Daniel Johan, a member of Indonesia’s House of Representatives Commission IV, has criticized the policy, urging the government to prioritize the interests of local dairy farmers.
Across Indonesia, dairy farmers have protested the Milk Processing Industry (IPS) quota restrictions, accusing IPS of choosing imported milk over local milk. Johan highlights the lack of government control over milk imports, which enter the country without tax. This situation enables exporters from countries like New Zealand and Australia to leverage free trade agreements (FTAs) that make imported milk up to 5% cheaper than local milk.
Johan noted that Ministry of Agriculture Regulation No. 33 of 2018 mandates milk processors to partner with local dairy cooperatives to source milk domestically. However, fewer than 20% of milk processing companies collaborate with local farmers. Johan urges the government to reevaluate the tax and duty exemption policy on milk imports, emphasizing the need to protect Indonesia’s dairy industry.
“The government must protect local farmers by implementing policies that are fair and support national growth,” Johan stated.
As Indonesian dairy farmers demand fair treatment, the government faces increased pressure to review its tax-free import policy and create a more supportive environment for local milk producers.
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