Economists warn govt against irregulaties in rice program

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.