Ahead of the final debate before the election, Dr Asep Suryahadi assesses the key economic…
It is now Ramadan — the holy month for Indonesia’s Muslim majority — and, as happens every year, news about soaring food prices is dominating headlines. A hot topic during the election campaigns, food prices will soon be a real battle for the government. And while price hikes before the holy month are viewed as an annual occurrence, the presidential candidates’ promises are still very fresh in people’s memories. The reputation of the newly elected government is now at stake.
Food prices matter
In general, commodity prices in Indonesia are decreasing, though there have been persistent fluctuations over the last decade. Of all commodities, food has been the most volatile. In fact, fluctuations in the price of foodstuffs like rice, meat, fish, chilies, tomatoes and other basic items have been greater than for all prepared food items, like instant noodles or cooked meals.
Figure 1. Development of Food and General Inflation Rates (year on year)
For most Indonesian households, the greatest portion of their expenditure is on food. On average, about 56 per cent of household spending is on food, according to data from Statistics Indonesia. The proportion is even greater in poor households, with food making up 64 per cent of their total spending in 2018. For poor and near-poor households, changes in food prices can therefore greatly affect their welfare, as well as their food security. As such, fluctuations in food prices are common sources of anxiety, especially among poor customers and small traders or food vendors. Public complaints about uncertainty in food price were a frequent finding in research conducted by SMERU together with IDS and Oxfam between 2012 and 2014. These complaints continued right up to the presidential race in April.
Cook or not to cook—and what to cook?
Because households spend so much of their income on food, changes in food prices greatly affect patterns of consumption.
A 40-year old housewife from Bekasi, Ibu R, told us her experience of a typical day in the life of a poor Indonesian housewife. As the one responsible for buying and cooking food, she said she often had to juggle fluctuating food prices to balance the family budget.
In the event of a food price hike or income shortage, she said she copes by swapping some household staples for instant noodles and other cheaper foods, and pays for all her groceries with credit. Her decisions are made on a day-to-day basis, depending on how much money she has. While planning her shopping and cooking ahead of time would be more cost-efficient, she rarely has the funds to make this a viable strategy.
Fluctuations in food prices also shape poor people’s food preparation habits. For the poor, cooking is often seen as an expensive activity, as it involves spending time and money on a series of activities, such as grocery shopping, transportation to and from the market, dishwashing, and — in some areas — fetching water from a great distance. The time expended could otherwise be spent making money — going to work, seeking additional income, or trading. Buying prepared food therefore becomes a preferable option, at least for part of the daily diet — usually breakfast.
For those who do decide to cook, they will often try to save costs by buying instant food, using instant seasoning, buying lower quality food, cutting back on animal protein and vegetable consumption, cooking with low variation, or substituting ingredients with cheaper options or with produce gathered from their surroundings. Some households mix regular rice with subsidised rice, or borrow ingredients from relatives or neighbours.
There are also adjustments in the way people cook, such as switching to a cheaper cooking method — like using firewood and a gas stove interchangeably, boiling rather than frying, or cooking jointly with relatives. Some poorer people in our research were found to reduce their meal frequencies or even ignore food restrictions.
As Ibu R told us: “For breakfast, I like to buy porridge, which costs me Rp 7,000 [AU$0.7] per bowl. I usually buy only two bowls of porridge, for my son and husband. I do not usually eat breakfast.”
A way forward
As it is hard for the poor to cook decent meals, it is also hard for them to eat well. Being in an economically precarious condition over the long term ends up affecting poor people’s eating habits, and ultimately their health.
Mitigating the impact of unhealthy eating habits should be a top priority, especially when Indonesia is struggling with a ‘double burden’ of malnutrition, signalled by the coexistence of stunting and obesity, and its associated health risks, such as cardiovascular disease and diabetes. Efforts by the government to develop people’s knowledge of food and nutrition are unlikely to have an impact if the government cannot first establish an enabling environment of stable, affordable food prices.