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)