HKTI backs 25% hike in rice price<\/p>\n
YOGYAKARTA (JP): The Association of Indonesian Farmers (HKTI)
\nurged the government on Monday to increase the price of rice by
\nat least 25 percent from about Rp 2,400 per kilogram.<\/p>\n
HKTI chairman Siswono Yudhohusodo said the price hike was
\nneeded to offset farmers' higher spending on fertilizer.<\/p>\n
The increase in the price of the fertilizer, particularly
\nsince the government lifted the subsidy on fertilizer sales late
\nlast year, made the current rice price unrealistically low, he
\nsaid.<\/p>\n
\"With a higher price of rice, farmers will be able to earn a
\nbetter margin and get a better living, too,\" he said on the
\nsidelines of a seminar on traditional farming held by Gajah Mada
\nUniversity.<\/p>\n
The rice price is determined by the market but the government
\nsets the floor price for the State Logistics Agency (Bulog) to
\npurchase unhusked rice from farmers.<\/p>\n
Siswono, the owner of a real estate developer and former
\nminister of transmigration in the Soeharto administration, said
\nthe current rice price of Rp 2,400 (about 35 U.S. cents) per
\nkilogram was so low that farmers could not get a sufficient
\nmargin.<\/p>\n
Based on an assumption of the country's total rice production
\nof 30 million tons, the 25 percent hike, or about Rp 600 per
\nkilogram, would enable local farmers to increase their total
\nincome to up to Rp 18 trillion, Siswono said.<\/p>\n
HKTI also sent a letter to the government asking for the
\napplication of a 50 percent import duty on rice.<\/p>\n
Siswono said the import duty was needed to narrow the price
\ngap between local and imported rice.<\/p>\n
He said imported rice, about 100,000 tons of which are shipped
\nin from Vietnam and Thailand each month, sold for cheaper prices
\nand consequently hurt local farmers' income.<\/p>\n
\"I believe President Abdurrahman Wahid can understand the
\nproblems encountered by local farmers, some of whom are actually
\nmembers of the President's organization Nahdlatul Ulama,\" he
\nsaid.<\/p>\n
Newly appointed Minister of Industry and Trade Yusuf Kalla
\nsaid last week the government was considering imposing a 30
\npercent to 35 percent import duty on rice as part of its next
\nletter of intent to the International Monetary Fund (IMF).<\/p>\n
The tax is one of several options being considered to cut the
\nprice gap between local and imported rice.<\/p>\n
The government liberalized rice imports in September last year
\nto counter surging rice prices in the local market as part of its
\nagreement with the IMF.<\/p>\n
However, the recent strengthening of the rupiah made imported
\nrice cheaper than local products.<\/p>\n
Under the regulation, private companies are permitted to
\nimport rice without having to pay import duties.<\/p>\n
The country's imports of rice are estimated to reach 1.5
\nmillion tons this year, far below last year's figure of 4.8
\nmillion tons.<\/p>\n
It imported 4.8 million tons of rice in the 1998\/1999 fiscal
\nyear ending March 31 because of a series of harvest failures
\nwhich were largely attributed to bad weather.<\/p>\n
The country's annual rice demand was estimated to be 32
\nmillion tons, including 27 million tons for consumption, three
\nmillion tons for industrial use and two million tons as a reserve
\nfor Bulog.(44\/cst)<\/p>",
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