Cooperatives land loans for rice buys

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)