Rizal wants to revive Bulog's rice monopoly<\/p>\n
JAKARTA (JP): Newly-appointed chief of the State Logistics
\nAgency (Bulog) Rizal Ramli said on Friday that the agency needed
\ngreater "authority and resources" to resolve the national rice
\nproblem.<\/p>\n
Rizal said that the country's drive toward economic
\nliberalization had gone too far by ending Bulog's monopoly to
\nimport and distribute rice.<\/p>\n
"We must reevaluate the role of Bulog. The current (rice)
\nproblem has emerged because Bulog no longer has sufficient
\nauthority and resources," he told a group of protesting farmers
\nand non-governmental organizations (NGOs) during a dialog.<\/p>\n
"Bulog must be given greater authority and resources
\nespecially to deal with rice ... We can't just leave it to the
\nprivate sector because it turns out that many of them are not
\nperforming well," Rizal said.<\/p>\n
Under pressure from the International Monetary Fund, the
\nprevious government of president B.J. Habibie in 1998 ended the
\n20-year exclusive right of Bulog to import and distribute basic
\ncommodities, including rice, soybeans, sugar, wheat and cooking
\noil.<\/p>\n
The agency's only role now is to import rice, although the
\ngovernment also allows the private sector to do the same. Bulog
\nis also charged with helping stabilize the domestic price of
\nunhusked rice to protect farmers.<\/p>\n
But Rizal said that Bulog was no longer able to purchase the
\noversupply of unhusked rice to stabilize the price because the
\nagency did not have the necessary funds.<\/p>\n
He pointed out that under the new central banking law, the
\nindependent Bank Indonesia could no longer provide special
\nliquidity assistance to Bulog to make the purchases.<\/p>\n
He added that the state banks that should have assumed BI's
\nrole were still reluctant to make new loans.<\/p>\n
He said that previously, Bulog purchased up to 10 percent of
\nnational rice production during peak harvest season to help
\nstabilize prices.<\/p>\n
Farmers have protested the current low price of unhusked rice,
\neven lower than the minimum price level of Rp 1,020 per kilogram
\nset by the government.<\/p>\n
Farmers and NGOs have blamed the government for allowing too
\nmuch imported rice.<\/p>\n
NGO activist Wardah Hafidz said that the government should
\nhave stopped rice imports because national unhusked rice
\nproduction last year was around 60 million tons, equal to about
\n30 million tons of husked rice, roughly the same as domestic
\ndemand.<\/p>\n
But Wardah said Indonesia imported some 6 million tons of rice
\nlast year despite sufficient domestic production, causing a fall
\nin domestic prices.<\/p>\n
Rizal insisted that the rice import policy must be maintained
\nto protect against times when domestic rice production dropped
\nbelow demand.<\/p>\n
But he admitted that the agency lacks a credible data base to
\ndesign an effective rice import policy. He said that so far,
\nBulog used data from the Central Bureau of Statistics (BPS).<\/p>\n
He suggested the National Development Planning Agency
\n(Bappenas) sponsor research to be conducted by BPS and NGOs to
\nget the real picture of national rice production and consumption
\nlevels.<\/p>\n
Rizal also suggested the government implement a rice import
\ntariff of 90 percent to 125 percent to protect local farmers.<\/p>\n
He said that this was the maximum tariff allowed under
\nguidelines of the World Trade Organization (WTO).<\/p>\n
He said that a 90 percent import tariff should be applied when
\nrice imports were less than 70,000 tons, and a maximum 125
\npercent tariff when rice imports exceeded 70,000 tons.<\/p>\n
But he acknowledged he had no authority to make policy,
\npointing out that this was the authority of the Coordinating
\nMinister for Economy, Finance and Industry Kwik Kian Gie.<\/p>\n
The current rice import tariff is 30 percent as agreed by the
\ngovernment and the IMF in January.<\/p>\n
Rizal appealed to senior government officials to protect the
\nnational interest in designing economic policy, not the interest
\nof the IMF.<\/p>\n
"I want to see our senior government officials act like their
\nJapanese or Chinese counterparts who fight for their national
\ninterest at the international forum. Not the opposite. It seems
\nmany of our officials fight for the interest of the IMF," he
\nsaid.<\/p>\n
Separately, World Bank senior economist Bert Hofman said on
\nFriday that imposing higher import tariffs would not necessarily
\nprotect poor farmers because they are not net sellers of rice,
\nbut net buyers of rice.<\/p>\n
Hofman suggested instead, that the government provide better
\ninfrastructure, including irrigation.(rei\/rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/rizal-wants-to-revive-bulogs-rice-monopoly-1447893297",
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