Analysts want govt to ease rice control<\/p>\n
JAKARTA (JP): The skyrocketing prices of rice in the past two
\nmonths should be enough justification for the government to end
\nthe State Logistics Agency's (Bulog) active role in rice trading,
\nexperts say.<\/p>\n
They also called on the government to end its policy of
\nkeeping the prices of rice low through subsidies as it
\ndiscouraged production and spurred on consumption at the expense
\nof food diversification.<\/p>\n
Agriculture analyst Bungaran Saragih of the Bogor Institute of
\nAgriculture said Bulog should be returned to its original
\nfunction as a logistics agency for the government and supply rice
\nonly to civil servants and Armed Forces personnel.<\/p>\n
\"Bulog should quit its role as a player in rice trading and
\nbecome a referee which only supervises trading and supplies data
\nto market players. If the referee is also a player, we cannot
\nguarantee a fair game,\" he said yesterday.<\/p>\n
The government would not be able to stabilize the rice price
\nin the short term due to a poor harvest this year, inefficient
\ndistribution of fertilizer and seeds, and ineffective marketing
\nof imported rice, he said.<\/p>\n
\"There's no magic solution to lowering prices in the short
\nterm other than increasing supply and improving distribution.
\nReplacing Bulog's chief will not lower the prices if the agency
\nis still run the same way,\" Bungaran told The Jakarta Post.<\/p>\n
In a surprise move, President B.J. Habibie removed Beddu
\nAmang, a long-time Bulog insider, from the agency and appointed
\nMinister of Industry and Trade Rahardi Ramelan to run the agency,
\ntogether with Minister of Cooperatives, Small and Medium
\nEnterprises Adi Sasono and State Minister of Food and
\nHorticulture A.M. Saefuddin.<\/p>\n
Market players suspect that Beddu's dismissal was strongly
\nrelated to Bulog's inability to arrest the increasing prices of
\nbasic commodities, especially rice and cooking oil.<\/p>\n
Local rice prices rose to as high as Rp 3,000 (4.1 U.S. cents)
\nper kilogram) over the last few days, well above the government's
\ntarget price (for low quality) of between Rp 1,750 and Rp 2,000
\nper kilogram. High-quality rice such as Cianjur Kepala and
\nRojolele sold for almost Rp 5,000 per kilogram.<\/p>\n
H.S. Dillon, executive director of the Center for Agriculture
\nPolicy Studies, suggested that if Bulog was still mandated to
\nstabilize rice prices, it should streamline the intricate
\ndistribution network.<\/p>\n
\"It should bypass the current distribution system because it
\ncauses a vast disparity between the official price and the market
\nprice.<\/p>\n
\"In addition, Bulog's market operation must be guaranteed so
\nthat rice goes directly to consumers,\" Dillon told the Post.<\/p>\n
Bulog's market operation has allowed speculators to buy
\nsubsidized rice and retail it at higher prices, he said.<\/p>\n
Basically, rice distribution should be very simple: farmers
\nsell their rice to cooperatives or distributors who sell it to
\nconsumers.<\/p>\n
But the current distribution system is very protracted.
\nFarmers sell rice to small traders who resell it to larger
\ntraders. The larger traders sell the rice to medium-scale
\ndistributors, who then resell it to small-scale distributors,
\nretailers and supermarkets before the rice finally reaches
\nconsumers.<\/p>\n
\"There are too many players in the rice distribution system
\nwho take a large profit margin and cause soaring prices,\" Dillon
\nsaid.<\/p>\n
Dillon noted that rice smuggling to neighboring countries was
\nanother way for people to make big profit from the price
\ndisparity.<\/p>\n
\"That's why I don't like the subsidy system because it could
\nencourage people to smuggle and stockpile the subsidized
\ncommodity,\" he said.<\/p>\n
The country is projected to consume around 29 million tons of
\nrice this year. However, because of failed harvests in some parts
\nof the country, the government plans to import 4.1 million metric
\ntons of rice, of which about 3.6 million tons have arrived.<\/p>\n
Saefuddin estimated that the rice price would begin to
\ndecrease in October, but Minister of Agriculture Soleh Solahuddin
\nsaid it was likely to remain volatile until the next major
\nharvest in April.<\/p>\n
Soleh argued that between 50 percent and 60 percent of annual
\nrice production was harvested around April. (gis)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/analysts-want-govt-to-ease-rice-control-1447893297",
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