Calls for tariff hike mount as harvest begins

Calls for tariff hike mount as harvest begins

Adianto P. Simamora, The Jakarta Post, Jakarta

The Ministry of Agriculture said on Wednesday that import tariffs
on rice must be increased to help keep away cheap imports as
harvest season begins at home.

Ministry community empowerment for food security director
general Ahmad Suryana said the massive inflow of cheap rice would
cause the price of the commodity to fall and hurt local farmers.

"Everybody knows the current tariff is still very low. We need
to raise the tariff," he said at a seminar on food security
policy held by the Indonesian Farmers Association (HKTI).

The current import tariff on rice is set at Rp 430 per
kilogram, which is equal to around 30 percent.

The ministry has previously proposed increasing the tariff to
Rp 753 per kg.

But HKTI has been demanding a tariff of around Rp 850 per kg.

HKTI chairman Siswono Yudohusodo said a tariff hike would not
cause a rice shortage at home because the current harvest, which
starts in May and ends in July, was sufficient to meet local
demand.

He said President Megawati Soekarnoputri had agreed to
increase tariffs but Minister of Finance Boediono had yet to
endorse the proposal.

Rice is a strategic commodity in the country because it is the
main staple of Indonesia's about 220 million people.

Siswono said that in order to ensure food security for the
country, farmers must be given incentives, including in the form
of import tariffs to keep them planting rice.

He said it would be politically and economically risky for the
country to continue to rely on foreign countries for food.

Siswono said that Indonesia was one of the world's biggest
importers of rice, while imposing the lowest import tariffs.

He said other countries had higher import tariffs on rice,
including China with 150 percent, Thailand 90 percent, Pakistan
120 percent and Vietnam 70 percent.

He said the country imported about 2 million tons of rice
annually, mainly from Thailand.