Bulog suffer a deficit of Rp 115 billion

Bulog suffer a deficit of Rp 115 billion

JAKARTA (JP): The National Logistics Agency (Bulog), which
controls domestic trade of various agricultural commodities,
suffered a deficit of Rp 115 billion (US$52.3 million) in 1993-
94.

Chatim Baidaie of the Government Audit Agency (BPKP) said
Bulog's 1993-94 financial statement shows that the deficit was
partly caused by Bulog's inconsistency in adopting standardized
auditing principles.

Bulog also failed last year to carry out effective
distribution of commodities which it controlled, he said last
week.

However, Bulog won unqualified support from BPKP, he said.

Chatim explained that from qualified rice sales alone, Bulog
suffered loses of up to Rp 18 billion last year because the
quality of its rice was decreasing.

Commenting on the audit results, Bulog's chief Beddu Amang
argued that it was very hard for Bulog to avoid a deficit while
carrying out massive market operations in rice during the 1993-94
fiscal year.

"It's normal for Bulog to enjoy an operational surplus or
suffer a deficit because its mechanism is already clear. The
deficit for that fiscal year was mainly caused by our rice market
operations," said Beddu, who was installed as Bulog's chief last
month to replace State Minister of Food Ibrahim Hasan.

Ibrahim headed Bulog since March 1993.

The government separated the function of Bulog from the office
of the state minister of food amid growing concern over its
decreasing rice stocks, which reached its lowest level -- less
than 200,000 tons -- in 15 years.

Beddu said Bulog's 1993-94 deficit was still lower than its
1986-87 deficit of Rp 178 billion, which was "also caused by
massive market operations in rice."

Subsidy

Despite the 1993-94 deficit, Beddu said that Bulog no longer
relies on government subsidies to carry out its mission to secure
food supplies.

Beddu noted that Bulog's 1993-94 deficit could be offset by
its 1992-93 surplus, which reached almost Rp 1 trillion.

Bulog, set up in 1967 by the Soeharto administration, is the
sole authority in the importation and distribution of rice and
agricultural products like sugar, wheat, corn and soybean.

Bulog's policy of controlling rice supplies has been
worthwhile, evidenced by Indonesia's success in reaching self-
sufficiency in rice in 1984.

However, the World Bank blatantly criticized Bulog's policies
on sugar, soybean and wheat in its annual country report last
year.

Analysts say the burden of Bulog's monopoly tends to fall on
the consumers, while the benefits fall on a small group of
producers, including PT Bogasari Flour Mills, Indonesia's only
flour plant.

BPKP also scrutinized Bulog deals with Bogasari. Bogasari
receives its wheat from Bulog but pays for it after the products
are marketed. BPKP said that Bogasari still owed Bulog Rp 135
billion for the 1993-94 fiscal year.

When asked, Beddu explained last week that out of the Rp 135
billion, only Rp 35 billion can be considered as Bogasari's debt
to Bulog. "I think it has been paid," he said.

The rest (Rp 100 billion), Beddu said, is not a real debt
because it is in the form of wheat stocks. "It's because we
cannot sell wheat for cash."

Sudwikatmono, a top executive of the Salim Group which
controls Bogasari, said recently that Bogasari owed Rp 94 billion
to the logistics agency in the form of wheat stocks. (rid)9