Bulog wants more money for controversial program

Bulog wants more money for controversial program

Fitri Wulandari, The Jakarta Post, Jakarta

Commodity regulator, the State Logistics Agency (Bulog), has
proposed a higher budget next year to provide a greater amount of
inexpensive rice for tens of millions of poor families
nationwide.

Bulog chairman Widjanarko Puspoyo said that the agency wanted
to increase the amount to Rp 5.61 trillion (US$623 million) in
2005 to distribute around 2.2 million tons of rice to low-income
households.

In comparison, the current budget for the rice for the poor
program (locally known as raskin ) is around Rp 5.25 trillion.

He said at a hearing on Wednesday with the House of
Representatives Commission III that despite the declining trend
in the number of poor in the country over the past five years,
the budget for the raskin program should be increased because the
current budget appropriation was not sufficient.

The raskin program was introduced three years ago to provide
subsidized rice for poor families, in a bid to compensate them
for the rising fuel prices as the government decided to cut fuel
subsidies.

However, the demand for a higher budget allocation, was looked
upon with suspicion as there have been allegations that the
raskin program has been manipulated by some of the officials in
charge.

Under the program, the rice is sold at Rp 1,000 per kilogram
(much lower than the market price). Each family deemed low-income
is entitled to 20 kilograms of rice per month.

Widjanarko acknowledged that the raskin program had not been
able to reach all 15.7 million poor families in the country.

The budget allocated for this year, for example, is only
enough to distribute the subsidized rice to around 8.6 million
families.

Widjanarko said that was due to limited funding.

According to the agency's data, of the families involved in
the program, on average they only received 13.3 kg of rice per
month.

eyebox

Ministry of Defense may stop buying rice from Bulog

The Ministry of Defense plans to stop buying rice for the
TNI/Police and civil servants from Bulog, which would force the
agency to buy less unhusked rice and rice from farmers.

Bulog's director Widjanarko Puspoyo said the TNI plans to
substitute rice allowances with cash for TNI and civilian
officials within the Ministry of Defense and TNI starting in July
2004.

Widjanarko said Bulog sells 200,000 tons of rice worth Rp 600
billion each year to the TNI/Police and the Ministry of Defense.

"We had planned to buy 2 million tons of unhusked rice and
50,000 tons of rice from the farmers this year. If we don't have
the market, how can we buy from the farmers?" Widjanarko wondered
on the sidelines of a hearing with legislators.

Widjanarko did not say the reason for the TNI's change. But
many said it was because Bulog provided rice of lower quality for
the soldiers.

He added that Bulog had sent a letter to President Megawati
Soekarnoputri and related ministers for them to consider the
policy which has been in place for nearly 35 years. He added that
since 1999 storing and procuring rice had been financed by
commercial funds. It has meant a large expenditure for managing
stock, securing the floor price and distributing rice for people
in the low-income bracket due to high interest rates.

Bulog's benchmark rice prices are increasing to compensate for
the high interest rate, Widjanarko said.

"The financing for our buffer stock should be put in the state
budget. Using commercial funds to finance rice buffer has proven
inefficient. High prices, above the market price, is deemed an
inefficiency within the agency, " Widjanarko said.

Bulog's proposed budget for the national buffer stock totals
Rp 3.55 trillion to be financed by 2004 State Budget.