Bulog wants quotas imposed on rice imports

Bulog wants quotas imposed on rice imports

JAKARTA (JP): The State Logistics Agency (Bulog) is seeking
support from the House of Representatives to impose quotas on
rice imports in an attempt to protect local farmers.

Bulog chief Widjanarko Puspoyo said here on Thursday that
imposing nontariff barriers such as by setting quotas on rice
imports would be more effective than raising import duties.

"The government has raised import duties as high as 30 percent
to curb rice imports but it is not effective due to the rampant
smuggling activities," he said in a hearing with House Commission
III in charge of agriculture and food affairs.

He said that he had formally sent a proposal on nontariff
barriers to Coordinating Minister for the Economy Rizal Ramli and
Vice President Megawati Soekarnoputri.

At the hearing, he also asked House members to support the
proposal.

Widjanarko was one of the representatives of the Indonesian
Democratic Party of Struggle (PDI Perjuangan) at the House before
being appointed as Bulog's chairman in March.

According to him, the rice farmers should be protected from
the influx of cheap rice from other countries, otherwise they
would switch to other crops.

Other alternatives proposed to the government include setting
up a ceiling price on imported rice and applying a special
customs inspection, he said.

He said imposing the import tariff of 30 percent on rice
imports was no longer effective because of rampant smuggling.

"We found that the volume of rice imports reported by sellers,
far exceeded those reported by importers to the customs and
excise authority," he said.

Indonesia is traditionally one of the world's largest rice
buyers, importing between 3.5 million and five million tons of
rice per year. Last year, the country, however, only imported
around 2.5 million tons.

Indonesia slapped a 30 percent import duty on rice in January
last year to protect local farmers from cheap imports.

Despite the tariff barrier, the private sector brought in 65
percent of the country's 1.5 million tons of rice imported last
year, he said.

At the hearing, Widjarnako also sought the support from the
House to regain its monopoly in the importation of rice, which
was removed in early 1998 as part of the government's commitment
to the International Monetary Fund (IMF) as a precondition for
its loans.

Imam Churmain, deputy chairman of House Commission III
rejected Widjanarko's proposal to reimpose its exclusive rights,
saying that the monopoly would only hurt the farmers and could
cause a burden on the state budget.

However, the House agreed to support the agency's efforts to
curb rice imports. (03)