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.