Expert warns against rice import duty<\/p>\n
JAKARTA (JP): The government's plan to reimpose an import duty
\non rice would only pamper local farmers, not solve the country's
\nrice supply problem, an agricultural expert Bungaran Saragih said
\nhere on Wednesday.<\/p>\n
\"I don't think that an import duty on rice is necessary, even
\nif it is only for a short-term period. Local farmers should
\nneither be spoiled nor overprotected,\" Bungaran told Antara.<\/p>\n
Bungaran was commenting on a proposal for the reintroduction
\nof an import tariff on rice in a bid to narrow the price gap
\nbetween imported and locally produced rice.<\/p>\n
The price of imported rice has declined sharply due to the
\nstrengthening of the rupiah against the U.S. dollar. The
\navailability of cheap imported rice has severely hurt prospects
\nof local farmers.<\/p>\n
Minister of Industry and Trade Yusuf Kalla recently said the
\ngovernment was considering imposing a 30 percent to 35 percent
\nimport duty on rice in part of its next letter of intent to the
\nInternational Monetary Fund (IMF).<\/p>\n
Kalla said the rice tax was one of several options being
\nconsidered to cut the price gap between local and imported rice.<\/p>\n
Separately, Minister of Agriculture M. Prakosa recommended the
\ngovernment establish an import duty on rice of between 55 percent
\nand 78 percent.<\/p>\n
The government lifted import tariffs last year as part of a
\nreform package agreed with the IMF, which is providing US$40
\nbillion in bailout funds to help Indonesia cope with the economic
\ncrisis.<\/p>\n
Bungaran said the wide price gap between imported and local
\nrise was not necessarily due to the influx of imported rice in
\nthe country.<\/p>\n
He said the fact that imported rice was sold at lower prices
\nto local rice only reflected the uncompetitiveness of local
\nproducts.<\/p>\n
He said locally produced rice was of better quality than rice
\nimported from Thailand, Vietnam or the Philippines.<\/p>\n
\"The problem here is not the import duty, but the inability of
\nour farmers to compete... The inefficiency of rice management by
\ngovernment institutions,\" he said.<\/p>\n
Bungaran said in order to promote the competitiveness of local
\nrice the government should reform the marketing and distribution
\nof rice on the domestic market, establish a special financial
\nagency to foster the development of the agriculture sector and
\nboost the promotion of Indonesian agriculture products on
\noverseas markets.<\/p>\n
He welcomed a recent statement from IMF director for Asia
\nPacific Hubert Neiss, who said the IMF would increase its aid for
\nthe agriculture sector in its next Letter of Intent with
\nIndonesia.<\/p>\n
He said IMF assistance should be used to develop systems and
\nfacilities, such as irrigation, road access in villages,
\ntechnology, financial agencies and education and marketing to
\nboost farmers' capabilities.<\/p>\n
Indonesia's rice imports are estimated to reach 1.5 million
\ntons this year, far below last year's figure of 4.8 million tons.<\/p>\n
The country imported 4.8 million tons of rice in the 1998\/1999
\nfiscal year ending March 31 because of a series of harvest
\nfailures largely attributed to bad weather.<\/p>\n
The country's annual rice demand is estimated to be 32 million
\ntons, including 27 million tons for consumption, three million
\ntons for industrial use and two million tons as a reserve for the
\nState Logistics Agency. (cst)<\/p>",
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