Bulog chief defends price-stability policy

Bulog chief defends price-stability policy

JAKARTA (JP): National Logistics Agency (Bulog) chief Beddu
Amang yesterday lashed out at members of the World Trade
Organization (WTO) who link price-stabilization policies with
protectionism, saying the two are "fundamentally distinct
concepts".

Speaking at the Asia International Rice Conference in
Singapore, Beddu said the benefits of price stability,
particularly for food, were important.

"Unfortunately, in my opinion, many member nations of the WTO
seem to equate stabilization with protection. As a result,
stabilization instruments, such as variable import levies, have
been declared illegal," he said in his speech, also sent to The
Jakarta Post.

He acknowledged that although protection and stabilization
sometimes went hand in hand, the two were fundamentally
different.

He said Bulog's price-stabilization program had shielded
Indonesia's economy from much of the instability on the world
rice market without systematically protecting consumers or
producers.

In times of high international prices, he said, Bulog's market
operations had helped protect consumers, and that farmers were
protected when prices went down.

Defending Bulog's role in Indonesia's economy, Beddu said its
operations did not represent continual changes in government
policy or the strength of interest groups.

"Instead, this pattern reflects a consistent long-term vision
that we have successfully implemented for more than 25 years,"
Beddu said.

WTO Deputy Director General Anwarul Hoda acknowledged at an
Asia Pacific senior officials meeting here last month that
commodity trading by state agencies was being criticized by
several WTO members for causing trade distortions.

Some countries had expressed concern over the problems of
state trading and proposed that it be "looked into in greater
detail in the next round of agricultural negotiations in 1999 or
earlier," Hoda said.

Bulog, established in 1967, controls the distribution of
several important commodities to assure food security.

The government designated the agency as the sole importer and
distributor of rice, sugar, wheat and corn and other commodities.

The media scrutinized the agency last year after a harsh
drought in 1994 cut Indonesia's rice production by 4 percent to
46.40 million tons of unhusked rice, forcing Indonesia to import
rice.

Many analysts believe the role of Bulog will decline over the
next five to 10 years, and is likely to be restricted to managing
rice stocks for poverty alleviation.

Other analysts, although questioning Bulog's closed financial
management, agree that the price-stabilization policy was
fruitful in the 1980s, evidenced by the realization of domestic
rice self-sufficiency in 1983.

In terms of assets, Bulog is believed to be one of the
country's richest state enterprises. (pwn)