A replacement for Bulog

State Minister of Food and Horticulture A.M. Saefuddin has announced that the government is planning to have the State Logistics Agency (Bulog) replaced by another agency -- at the end of this year at the latest -- in order to improve the distribution and price stability of food and other essential commodities. According to Saefuddin, the new agency will be noncommercial and financed with funds provided by the state and other sources.

According to Law No.7/1996, the government's role is to distribute food and stabilize food prices and assure that stocks are sufficient, that commodities are easily available and that they are affordable to all. During the past New Order regime, however, Bulog's duties were so expansive that these functions often became blurred.

What could be wrong with Bulog?

Under the agreement reached between Indonesia and the International Monetary Fund (IMF), Bulog will by the end of 1999 be entrusted only with overseeing the trade of rice. Trade in other commodities, such as sugar, flour, soybeans and cooking oil, will be made free (of subsidies), and actually already has been freed.

As far as the public is concerned, it matters little what the name of the new agency will be. What is important is that rice will always be available in sufficient quantities and at an affordable price. If Bulog is to be "reformed", therefore, the improvement must be complete. If this is to be achieved, Bulog's policies must be assured to correspond to the government's national food policies. If we want rice to be available in sufficient quantities, incentives must be given to rice producers. During the New Order regime the purchasing power of farmers underwent a steady decline due to inappropriate policies.

-- Bisnis Indonesia, Jakarta