No. 26/172/DKom
Efforts to control inflation by Bank Indonesia in synergy with the Government continue to face various challenges, which include increasing land conversion, weather anomalies due to La Niña, supply chain disparity and various global risks. In response, Bank Indonesia in conjunction with the (central and regional) Government implemented the National Movement for Food Inflation Control (GNPIP) in the Java region with a focus in 2024 on digitalisation as the flagship regional inflation control program in the form of the SENOPATI application (food supply and price monitoring system) and a financial transaction management system dashboard for farmer/municipally-owned enterprises (BUMP/BUMD) known as SEMAR. The SENOPATI application intends to build data and information connectivity to monitor food production and prices in real time. Meanwhile, the SEMAR application seeks to optimise farm financial management and supply chain effectiveness for food commodities. Both applications are expected to strengthen farm business management at BUMP/BUMD as well as optimise inter-regional cooperation (KAD) and food downstreaming. The flagship program was launched at the GNPIP meeting for the Java region, entitled Strengthening Inflation Control Synergy to Support Quality Economic Growth, today (14/08/24) in Semarang.
Bank Indonesia Deputy Governor, Doni P. Joewono, represented by the Head of the Bank Indonesia Regional Department, Arief Hartawan, took the opportunity to describe Java's strategic role as a national food production hub for rice, various chili varieties and shallots. Annual inflation in the Java region in July 2024 was recorded at 2.10% (yoy), which is below the national rate of 2.13% (yoy) and within the 2.5%±1% target corridor. The challenges of declining arable land and weather anomalies in the region, however, continue to demand vigilance. Based on data published by BPS-Statistics Indonesia, arable land in Indonesia has declined to approximately 238,000 ha, with around 60% of the decline observed in the Java region. This emphasises the importance of synergy and utilising integrated data, such as that produced by the SENOPTI and SEMAR applications, to map potential land, formulate strategies to strengthen downstreaming and balance supply in order to maintain sustainable food resilience. Bank Indonesia is confident that synergy and collaboration among all adaptive and innovative Regional Government Inflation Control Teams (TPID) in the Java region and nationally will maintain stable inflation within the 2.5%±1% target corridor.
Echoing those sentiments, the Deputy Minister for Macroeconomics and Financial Coordination of the Coordinating Ministry for Economic Affairs, Ferry Irawan, expressed his appreciation for the synergy and collaboration among TPID teams in the Java region that focuses on controlling food inflation. Notwithstanding, intertemporal and interregional supply availability remains the most binding constraint to food price stabilisation measures. Productivity must be optimised through several quick wins, such as the IP300 program for rice, as well as the use of Proliga cultivation technology and high yielding varieties, and True Shallot Seed (TTS) to mitigate the impact of weather anomalies on supply availability. At the event, acting Governor of Central Java, represented by the Regional Secretary, Sumarno, said that the GNPIP movement is a form of TPID commitment and display of seriousness at the provincial and regency/city administrative levels in the Java region to control regional inflation. The TPID team for Java province will act on the recommendations of the TPID-TPIP coordination meeting through synergy within an end-to-end integration program. To that end, the TPID-TPIP coordination meeting for the Java region today (14/08/24) agreed three strategic measures, namely: (i) increasing food productivity to overcome weather anomalies, including the application of innovative cultivation technologies, (ii) strengthening production amid increasing arable land conversion, and (iii) strengthening the integrated food ecosystem.
Several other programs to strengthen food productivity were also agreed at the GNPIP event for the Java region, which include facilitating infrastructure assistance for 28 farmer groups/business players in the Java region along with financing support programs. In addition, 13 new KAD cooperation programs within the Java region were also confirmed by increasing the role of BUMP/BUMD. In turn, BUMP/BUMD are expected to increase the value-added of food commodities through downstream programs. BUMP/BUMD optimisation in the first semester of 2024 was also achieved by increasing the number of TPID kiosks significantly from 147 to 924 throughout the Java region.
Jakarta, 14th August 2024
Communication Department
Erwin Haryono
Assistant Governor
