Cooperatives land loans for rice buys

JAKARTA (JP): The government is to disburse Rp 778 billion (about US$91 million) in cheap loans to village cooperatives and non-governmental organizations for use in procuring rice from local farmers, Agriculture Minister Soleh Solahuddin said on Friday.

Soleh said Bank Indonesia (BI), the central bank, would disburse the loans through the state Bank Rakyat Indonesia beginning next week.

"BRI is expected to receive the money from BI next Monday or Tuesday. The loans are expected to reach the cooperatives and non-governmental organizations within one week, he said.

The minister said the loans are necessary for the cooperatives to buy rice from farmers in order to protect them from the current fall in the price of unhusked rice, he said after his meeting with President B.J. Habibie.

The loans will be distributed to around 5,000 cooperatives and several non-governmental organizations nationwide to procure around one million tons of unhusked rice, he said.

Soleh said that BI has disbursed around Rp 45.6 billion of the loans this week to village cooperatives in Java through BRI, in order to stabilize rice prices there.

He said that the loans should have been distributed early January when farmers started to harvest their crops, but disbursement was delayed because of the financial bureaucracy and problems between BRI and the non-governmental organizations that had to be settled first.

"The delay in credit disbursement has resulted in the sharp fall in the price of unhusked rice during the current harvest season," he said.

In several rice-producing areas in Java, farmers have had to sell unhusked rice at around Rp 1,000 per kilogram, below the floor price of between Rp 1,400 and Rp 1,500 per kilogram set by the government in December, he said.

"That's why BRI immediately disbursed the Rp 45 billion in arranged loans after getting BI's approval, because we have to immediately start helping farmers by buying their rice at floor prices," he said.

Meanwhile, State Minister of Food Affairs and Horticulture A.M Saefuddin said earlier this week that the government has also allocated another Rp 1.5 trillion in BI liquidity credits to be used by the State Logistics Agency (Bulog) to buy one million tons of unhusked rice from local farmers in order to stabilize prices.

But he said, the amount would not be enough to help farmers because 20 million tons of unhusked rice would be produced during the current harvest which will last until May. (gis/prb)