New rule needed to protect staple markets<\/p>\n
JAKARTA (JP): The chairman of the State Logistics Agency
\n(Bulog) Beddu Amang said yesterday that the government should
\nissue a ruling to prevent private companies from controlling the
\nmarket of staple products such as wheat.<\/p>\n
He said he feared that without such a ruling, the government's
\nplan to scrap next year the agency's monopoly on the staple
\nproducts of wheat, wheat flour, garlic and soybeans would benefit
\nonly a few big businesses.<\/p>\n
\"If Bulog still maintained its monopoly, we could assure that
\ncommodity prices would be stable,\" he said. \"But if Bulog's
\nmonopoly privileges are abolished, we need a ruling to safeguard
\npublic interest,\" he told the House members.<\/p>\n
According to him, if there is no \"safety ruling\", the
\nscrapping of Bulog's monopoly would only mean the transfer of its
\nmonopoly to big companies.<\/p>\n
The government announced early this month to abolish Bulog's
\ntrading monopoly on soybeans, garlic, wheat and wheat flour
\nstarting Jan. 1, but would maintain the agency's monopoly on rice
\nand sugar.<\/p>\n
According to Ministry of Industry and Trade Decree No.
\n407\/MPP\/Kep\/11\/97, Bulog will still be the exclusive sole
\ndistributor of wheat flour in the domestic market for the next
\nthree to five years to help stabilize its price.<\/p>\n
Beddu said that under the decree, consumers would still
\nreceive a government subsidy during the transition period, but
\nprivate companies were allowed to directly import wheat flour.<\/p>\n
Beddu added that the government subsidy for wheat flour was
\nthe biggest compared to other subsidized commodities, but he
\ndeclined to give details on the amount of the subsidy.<\/p>\n
He said that with the abolishment of Bulog's monopoly, the
\nprice of wheat flour was expected to rise soon.<\/p>\n
Previously, Bulog periodically raised the price of wheat flour
\nevery four months.<\/p>\n
Analysts said the government's move to end Bulog's monopoly,
\nwhich has been in existence for over 25 years, was a little late
\nin coming because any newcomers would find it extremely difficult
\nto make inroads in the wheat flour industry which has been
\ndominated by Bogasari.<\/p>\n
Bogasari Flour Mills, a subsidiary of the Salim Group, has
\nbeen holding the exclusive rights to mill Bulog's wheat into
\nflour for decades.<\/p>\n
But analysts also welcomed the move saying that Bulog should
\nconcentrate on maintaining a stable price for rice.<\/p>\n
At the hearing, Beddu also briefed the House members about
\nrice stocks.<\/p>\n
He said Bulog currently had around 2.2 million tons of rice in
\nits storehouses across the country.<\/p>\n
He hoped that the agency's existing rice stocks, which dropped
\nfrom 2.7 million tons last month, were sufficient enough to
\noffset a possible drop in rice production.<\/p>\n
He said that Bulog would supply around one million tons of
\nrice in its market operation, which would be performed soon in
\npreparing for the increase in food demand over Christmas and the
\nIdul Fitri festivities.<\/p>\n
\"We will see the result of our market operation in the next
\nfew weeks. If demand reaches over one and a half million tons, we
\nmay import rice,\" he said.<\/p>\n
Indonesia's rice production is expected to drop by 4 percent
\nto around 49 million tons from 52 million tons set by the
\ngovernment before the prolonged dry season. (08)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-rule-needed-to-protect-staple-markets-1447893297",
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