Bulog urges govt to halt rice imports

The Jakarta Post, Jakarta

The State Logistics Agency (Bulog) urged the Ministry of Industry and Trade to impose a temporary ban on all rice imports until at least September to protect domestic producers against lower priced imported rice, thereby pushing the price that consumers pay up by as much as 25 percent.

Bulog president Widjanarko Puspoyo said that without the ban there would be an oversupply in the local market amid the current harvest season.

"I have proposed (this measure) to the minister (of industry and trade) and it seems there's a green light from her (Minister Rini Soewandi)," Widjanarko was quoted by Antara as saying on Wednesday.

He was speaking to reporters after being inaugurated as the first president of Bulog, whose status has just changed from a non-profit state institution into a profit-oriented state-owned company.

Widjanarko said that the main reason for the current drop in the market price was the large quantities of imported rice which is being sold to local residents at around Rp 2,200 per kilogram (kg), compared to the price that domestic producers offer, between Rp 2,700 and Rp 3,000 per kg.

Previously, the Ministry of Agriculture and the Indonesian Farmers Association (HKTI) proposed a higher import tariff on rice (from the current Rp 430 per kg) to artificially keep the prices higher so domestic growers could compete.

But Widjanarko said that raising the import tariff would not be enough to make the domestic agriculture industry competitive.

He said that Bulog had so far purchased some 1.4 million tons of rice from the domestic farmers but the price continued to decline.

He added that Bulog had a limitation in purchasing the local rice due to the limited space of its warehouses.

"It must be a complete ban on imports," he said.

Bulog was originally set up to stabilize the price of rice at home both to protect farmers and consumers by purchasing or unloading its reserves to affect prices.

Although the change in status will force Bulog to operate on a commercial basis as it would no longer be entitled to government subsidies, Widjanarko said that Bulog would still retain its price stabilization mission.

He said that in addition to rice, Bulog would also expand its operations into other strategic commodities such as sugar, soybeans and corn.

Following the late 1990s economic crisis, the International Monetary Fund has been forcing the government to cut the monopoly role of Bulog in the marketing of these commodities domestically.