Curb rice imports, raise prices: Experts

Curb rice imports, raise prices: Experts

Moch. N. Kurniawan, The Jakarta Post, Jakarta

If the government wants to achieve self sufficiency in rice, it should pursue it from two fronts: curbing rice imports and boosting the floor price of rice, according to one legislator.

Legislator Imam Churmen of the National Awakening faction said the government must curb rice imports, contending the huge amount of imported rice did not reflect the country's rice demand and only benefited importers.

"If we look at our rice demand and domestic rice output, you can see that those millions of tons of imported rice are not necessary," he told The Jakarta Post on the sideline of a meeting at Commission III overseeing agriculture and food affairs.

Indonesia, once self-sufficient in rice, has been importing more and more rice over the past decade, from less than 500,000 tons in 1989 to an average of 3.7 million tons in the past three years.

Indonesia's rice imports account for 10 percent of the world's rice trade, and this is sustainable for Indonesia's food security in the long term, experts said.

However, reducing rice imports without boosting domestic rice output would not solve the problem. Farmers must be enticed into producing rice.

To attract farmers into producing more rice, Bunasor Sanim, professor at the Bogor Institute of Agriculture (IPB), urged the government to increase the floor price of rice.

Bunasor suggested the government assign corrupt-ridden State Logistics Agency (Bulog) to buy farmers' rice at the stated floor price.

"This will also encourage farmers to plant paddy so they will be certain of rice buyers and will eventually earn better incomes," Bunasor told the Post.

The government has set the floor price of unhusked rice at Rp 1,519 (17 U.S. cents), which is quite high for most rice farmers in the country.

In reality, however, the market price for unhusked rice remains far below the floor price, especially during the harvest period, and Bulog claim to have no money to buy rice at the floor price.

However, requiring Bulog to buy more rice from Indonesian farmers would require more funds from the state budget to finance the purchase of rice by Bulog.

Imam said the House of Representatives (DPR) and the government had agreed to raise next year's budget for Bulog to buy rice from farmers from 8 percent to 10 percent of the total domestic rice production.

Domestic rice production is expected to reach 30,892,021 tons this year, and 31,200,941 tons next year, according to the Ministry of Agriculture.

Bunasor said the two measures -- curbing rice imports and rising rice floor prices -- should be pursued at the same time to create a more tangible impact on domestic rice output.

"Those two short-term measures must be carried out simultaneously to encourage farmers to grow paddy. Otherwise, the move will not be effective," Bunasor told The Jakarta Post.

For the long-term, he added, the government must introduce incentives to farmers, among others, cheap fertilizers, good seeds, reduced transportation costs and good storage facilities.

If those measures are pursued -- with sufficient subsidies -- the country would again achieve self-sufficiency in rice, he said.

Indonesia achieved self-sufficiency in rice in 1984, following a set of measures to boost domestic rice output, including subsidizing fertilizers and pesticides.

As the level of subsidies was reduced, combined with the increasing number of converted paddy fields, Indonesia could no longer maintain self-sufficiency in rice.

The Ministry of Agriculture has actually prepared a program to boost domestic rice output, including a plan to open 100,000 hectares of paddy fields per annum. The program, however, has yet be approved by the Cabinet.

The ministry has also proposed to the Cabinet to raise rice import duties to an unspecified level from the current level of 30 percent, which is much lower than tariffs set by other rice- producing countries such as Thailand and India.