Economists warn govt against irregulaties in rice program

Adianto P. Simamora, The Jakarta Post, Jakarta

The government should implement properly the distribution system of the "rice for the poor program" so that the heavily subsidized rice can reach really needy families, prominent agricultural economists said on Monday.

H.S. Dillon, executive director of the Center for Agriculture Policy Studies, said that local administrations at community level should disclose the names of recipients to the public to help avoid irregularities.

"Basically, the direct distribution system is good but this may also create some irregularities in the field if the public does not know the names of the recipients," he told The Jakarta Post.

The State Logistics Agency (Bulog) said on Sunday that it would distribute a total of 2.35 million tons of low-priced rice to 9.79 million poor households this year to help mitigate for the poor the impact of a planned increase in the price of fuel. The government recently increased electricity prices.

In the past, such programs were the target of massive corruption, including that by politicians seeking funds to finance their campaigns in general elections.

Suhardo, a spokesman for Bulog told the Post that the agency would implement a direct distribution system for this program to ensure that the rice would reach its target.

Under the system, each poor family would receive a special coupon that could be exchanged for 20 kilograms (kg) of rice per month.

He said that Bulog would directly distribute the rice to each subdistrict in the country.

"We hope this kind of distribution will help prevent irregularities," he said.

The rice would be sold at Rp 1,000 (10.45 U.S. cents) per kilogram (kg), compared with the current market price of around Rp 3,000 per kg.

He said that Bulog was expected to distribute about 200,000 tons of rice this month.

Suhardo said that the agency would allocate some Rp 4.67 trillion to fund this program.

"Bulog will use the social compensation fund of about Rp 500 billion to finance this program, while the remainder will be financed from the government's subsidy program," he said.

Meanwhile, agriculture expert at the Center for Social and Economic Research Pantjar Situmorang said that administrations at subdistrict level had to involve the local communities, including nongovernmental organizations (NGOs), to oversee the program.

"It is important to involve them (local communities/NGOs), to avoid irregularities," he said, adding that the price differential tempted people to try and make a profit by abusing the program.

According to Suhardo, the change in the name of the program from "market operation program (OPK)" to "rice for the poor program" was aimed at making it clear that the program was aimed only at the poor.

The government introduced the OPK program in 1998, in the wake of the economic crisis, to help poor families.

He said that the agency would use both locally produced and imported rice in this program.

In the past, many parties, including poor families, repeatedly complained that the agency had distributed low-quality rice.

Elsewhere, Dillon said that the most critical matter now was not to distribute low-priced rice but how to improve the economic power of the poor.

He cited that as an example the government should provide incentives to farmers to boost their productivity.