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)