'Subsidies given occasionally to flour industry'<\/p>\n
JAKARTA (JP): A former chief of the National Logistics Agency
\n(Bulog), backing his successor, affirmed yesterday that subsidies
\nto the flour industry were given only on an occasional basis.<\/p>\n
\"A subsidy for the flour industry is necessary only when wheat
\nprices on the international market are high,\" said Bustanil
\nArifin, who headed the agency from 1983 to 1993.<\/p>\n
Bustanil, who spoke to reporters after the launching of new
\nlow-cost apartments for fishermen in Muara Angke, North Jakarta,
\nadded that if international prices were low, no subsidy would be
\ngiven.<\/p>\n
A research recently accused Bulog of subsidizing the flour
\nindustry -- currently dominated by the Salim Group which owns
\nupstream and downstream industrial plants -- by up to Rp 760
\nbillion (US$341 million) last year.<\/p>\n
The research calculated that Bulog imports wheat at Rp 418 per
\nkg but sells it at only Rp 141 per kg to PT Bogasari (controlled
\nby the Salim Group), which -- together with the Berdikari Group
\n-- has been appointed to process the grain into flour.<\/p>\n
Flour produced by Bogasari is then bought by Bulog at a
\nfactory price of Rp 616 before being distributed to biscuit,
\nnoodle and other flour-based manufacturers, of which the Salim
\nGroup is also a major part of.<\/p>\n
Price<\/p>\n
Following the allegations, the head of Bulog, Beddu Amang,
\ndenied that the government had been subsidizing the industry,
\nsaying that there were \"subsidy funds\" collected from
\ndistributors and down-stream consumers which covered any price
\nfluctuations that may occur on the international market.<\/p>\n
Bustanil said yesterday that the price of imported wheat Bulog
\ncharges PT Bogarsari's flour mill, which currently stands at Rp
\n141 per kilogram, has long been stipulated.<\/p>\n
\"Apart from that, there are also the subsidy funds which I
\nformulated. At first, the funds were Rp 10 per kg but then they
\nincreased to Rp 20 per kg and they are now more than Rp 200 per
\nkg,\" he said.<\/p>\n
According to Beddu earlier this month, the amount of subsidy
\nfunds are currently Rp 256 per kg.<\/p>\n
Bustanil said that due to high wheat prices on the
\ninternational market -- caused by long droughts -- the country
\ncurrently has to subsidize the flour industry.<\/p>\n
\"But Indonesia's flour prices will not follow the
\nfluctuation,\" he said.<\/p>\n
Ever since the controversy was sparked, legislators and
\neconomists have called for more transparency in Bulog and the
\nflour industry.<\/p>\n
Legislators have also called on the government to allow more
\ninvestors to enter the flour industry and boost healthy
\ncompetition. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/subsidies-given-occasionally-to-flour-industry-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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