Bulog considers nontariff barrier to curb rice imports
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)