Government to review rice import tariffs regularly

Government to review rice import tariffs regularly

JAKARTA (JP): The government will review rice import tariffs
once every six months to protect local farmers from stiff
international competition, Minister of Agriculture Muhammad
Prakosa said on Tuesday.

He said a tariff team at the finance ministry would regularly
review rice duties based on rice production and prices both in
the domestic and international markets.

In addition, the level of the rupiah's exchange rate against
the U.S. dollar would also be considered.

"International rice prices fluctuate, as does the rupiah's
value against the dollar. We will monitor those variables and
adjust the tariffs so it will not hurt local farmers," Prakosa
told a media briefing.

Last year, the government, with the agreement of the
International Monetary Fund (IMF), lifted import tariffs on rice
which exposed local farmers to free market competition with other
producers from various countries.

The policy discouraged local farmers from continuing their
activities because their production was less competitive in terms
of quality and price than imported rice.

Because of the change in administration and protests from
farmers, the government, again with consent from the IMF, will
reimpose a 30 percent tariff on rice to protect local farmers.

"The purpose of imposing import tariffs is to close the gap
between the world and domestic prices of rice," Prakosa said.

However, he noted that the government would keep the rice
tariffs at a certain level which would keep a 10 percent price
gap between local and imported rice.

"The figure was chosen to provide potential importers
incentives to import rice," he said, adding that imported rice
was still required to meet national demand.

He explained that the 10 percent difference would enable
businessmen to import rice when local production was low. On the
other hand, it would make imported rice more expensive when local
production was good.

Indonesia's rice production this year is expected to reach
49.9 million metric tons of unhusked rice, an increase of 1.3
percent on last year's 49.3 million tons.

Prakosa projected that rice production should improve to 51
million tons of unhusked rice next year, thanks to good weather
as well as the government's commitment to secure food sufficiency
and boost agribusiness.

National corn production, meanwhile, is expected to reach 9.5
million tons this year and 10.5 million tons next year. Soybean
output would be 1.4 million tons this year and 1.5 million tons
in 2000.

The fishery industry is projected to produce 5.7 million tons
of fish and fishery products this year and 6.59 million tons next
year. Exports of fishery products are projected to reach 808,000
tons this year worth US$2.44 billion and 1.05 million tons next
year worth $3.7 billion.

The country's livestock population is projected to reach 12.18
million this year and 12.5 million next year. (06)