Bulog urges govt to halt rice imports
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.