Bulog to raise rice price by 10 percent next year

JAKARTA (JP): The chairman of the State Logistics Agency (Bulog) Beddu Amang said yesterday that the government planned to increase the floor price of rice early next year by about 10 percent.

Beddu said that the increase would be made to reflect the expected rise in the inflation rate.

"I hope the increase can be carried out before the early main harvest next year," he said.

He said that the adjustment would help the farmers to receive more suitable prices for their rice products due to the increase in their production costs.

"The government will discuss the plan early next year, but I think the rise in the price will help farmers," he said.

In January, last year, Bulog raised the floor price of the rice it procured from village cooperatives by 16 percent from Rp 738 to Rp 856 per kg. The price of its rice procured from non- village cooperatives was increased by 16 percent from Rp 730 to Rp 848 per kg.

However, the price of rice in Jakarta is now hovering between Rp 1,200 to Rp 1,500 per kilogram, far higher than official prices.

Beddu admitted that farmers had raised the price of rice and other commodities due to the drought and failed crops in several areas.

But the price increase was still within the acceptable level of two percent, he said.

"We think the increase in rice prices of between two percent and three percent is still reasonable," he said.

Bulog was set up by the government in 1967 to control the distribution and importation of several basic foodstuffs -- including rice, sugar, wheat, corn and soybean -- to ensure national food security and reasonable incomes for farmers.

Beddu also said that the agency, which has been granted a monopoly over rice imports as part of its function to stabilize domestic food prices, currently had around 2.4 million tons of rice in its storehouses across the country.

He said that the agency's current stocks, which dropped from 2.7 million last month, were sufficient enough to offset the possible drop in rice production.

"I hope the existing rice stock will be enough to face the dry season until next April," he said.

Minister of Agriculture Sjarifudin Baharsjah said last month that the prolonged drought could reduce rice output by four percent to around 49 million tons from 52 million tons set by the government before. (08)