Bulog considers nontariff barrier to curb rice imports
JAKARTA (JP): The State Logistics Agency (Bulog) is considering imposing nontariff barriers on rice imports in a bid to protect local farmers, according to Bulog chief Widjanarko Puspoyo.
Widjanarko said on Thursday that although the current 30 percent import tariff was still effective, nontariff measures must also be designed.
"It (the plan) is still being discussed, and we'll proposed it to the Ministry of Industry and Trade, and the Ministry of Finance," the new Bulog chief told reporters.
"However it may be, we must show our commitment to the farmers concretely and clearly," the former top legislator added.
Widjanarko said that the nontariff barriers might include prohibiting rice imports in rice-producing regions including Java, South Sulawesi and parts of Sumatra; and during the harvest season, particularly in the peak period of April and May.
Bulog is responsible for the price stabilization of unhusked rice and the distribution of rice.
Rice farmers have blamed a recent easing of domestic prices on the inflow of cheap rice imports.
But the new move may irritate the International Monetary Fund, a champion of free trade. The IMF is providing the country with a multibillion dollar bailout loan.
Indonesia is traditionally one of the world's largest rice buyers, importing between 3.5 million and five million tons of rice per year. Last year, however, the country only imported around 2.5 million tons.
Widjanarko also made a controversial statement in March upon his installation as the new Bulog chief, by announcing that he would ask the government to allow the agency to resume trading in commodities, which had been halted at the request of the IMF.
When first established in the late 1960s, Bulog held the monopoly on the importation of rice, wheat, sugar, soybeans and several other basic commodities.
However, this exclusive right was brought to an end by the government in early 1998 following the IMF's request.
Elsewhere, Widjanarko announced that according to an audit by international accounting firm Arthur Andersen, various inefficiencies at Bulog in the past had cost the agency around Rp 6.1 trillion.
He said that the auditor had recommended several corrective measures to improve efficiency, including turning the agency into a profit-oriented state company as well as other internal restructuring measures.
The audit on Bulog is part of a government program to introduce good corporate governance at state institutions.
Coordinating Minister for the Economy Rizal Ramli said last year that he planned to turn Bulog into a profit-oriented company by this year.
In the past, Bulog was treated as a cash cow of authoritarian former president Soeharto and his cronies.
Meanwhile, the Ministry of Forestry announced that according to an audit by international accounting firm Ernst & Young, inefficiencies in the collection of reforestation funds amounted to $4.17 million during the 1993-1998 period, while inefficiencies in the use of acquired reforestation funds totaled more than $1 billion.
The ministry said that various corrective measures included curbing illegal logging activities, improving the monitoring and reporting system as well the accounting system.
The reforestation fund had also been the target of abuse by corrupt government officials and businessmen in the past. (rei)