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)