Government's rice policy hurts farmers: Study

Government's rice policy hurts farmers: Study

JAKARTA (JP): A recent study carried out by a government
official states that the government's policy on rice, in which
the price and importation of the staple are tightly controlled,
have hurt the country's rice farmers.

"The government's grip on rice tends to disadvantage rice
farmers since their profits have been reduced and the added value
of their production has been discounted," Johnny Walker
Situmorang, a staff researcher at the Ministry of Cooperatives
and Small Enterprises, said while presenting his doctoral thesis
at the Bogor Institute of Agriculture.

Situmorang's thesis, called Levels of Protection and the
Economic Cost of Indonesia's Rice Policies 1979-1991, was
reported by Antara as receiving a "very satisfactory" grade from
the institute's senior lecturers.

Regulations stipulate that only the National Logistics Agency
can import rice. The agency procures a portion of the country's
annual harvest to stabilize market prices and create a buffer
stock.

The average increase in the price of rice over the last ten
years has been lower than the rate of inflation.

Analysts argue that such policies allowed Indonesia to become
self-sufficient in rice in 1984. The country was formerly the
world's biggest rice importer.

Despite past success, some observers, including the World
Bank, say that Indonesia should gradually liberate its rice trade
by shifting the marketing of rice to the private sector.

"On a national scale, the negative impact of the rice policy
has been tremendous," Situmorang said. (hdj)