Govt must take measures to keep rice prices intact

Govt must take measures to keep rice prices intact

JAKARTA (JP): The government must make an all-out effort to keep rice prices from falling below the official floor price so farmers are protected against unfavorable market conditions, an agricultural economist says.

Bungaran Saragih, the director for the Bogor Agricultural University's Center for Development Studies, said the National Logistic Agency (Bulog) has committed itself to stabilizing rice prices and this should be done so at all costs.

"This is an promise the government must keep. There should be no excuse, such as lack of funds, for them not to do it. That's only fair," he told The Jakarta Post over the weekend.

Saragih acknowledged that although the present situation was good for the country's rice stock, it is bad for farmers if it means they receive extremely low prices for their rice.

The Ministry of Agriculture's Director General of Food Crops and Horticulture, Amrin Kahar, said last week that national rice production from the 1995-1996 planting seasons was estimated to exceed the targeted 51.1 million tons of unhusked rice.

Until the end of last year, production had already reached 49.8 million tons.

The Central Bureau of Statistics had earlier predicted rice production for the current planting season to grow by 3.89 percent from the previous year's 46.5 million tons.

But until last year, the Agricultural Ministry had already recorded an increase of up to 6.9 percent.

Amrin said some seven million hectares of rice fields were ready to be harvested later this month and the yield was expected to exceed the amount targeted for the country's rice stock.

Head of Bulog Beddu Amang said earlier last week that Bulog's warehouses were ready to accommodate all the rice it had bought from farmers that was needed to keep prices stable.

Nervous

Saragih said Bulog seemed "nervous" this year, after having failed three years ago to procur enough rice for the national stockpile (two million tons).

In 1993, Indonesia lost the self-sufficiency in rice it had enjoyed since 1984, because rice production dropped due to floods, droughts and diseases. Since then, Indonesia has had to rely partly on imports.

In an attempt to establish a buffer stock to bring down prices, Bulog was forced last year to relax quality standards for rice bought from farmers.

Bulog's imports of rice for the current planting season, according to sources, has so far reached some 3.6 million tons. Beddu said imports of foodstuff, based on contracts signed last year, would continue arriving until around April.

Saragih said the huge imports, which arrived together with this year's massive rice production were a consequence of "inaccurate predictions".

"There is nothing much we can do. The fact is that the climate has been good for rice. Now the government must not let prices go into freefall," he said.

Observers are skeptical whether the government can keep its promise to buy and store all the rice from farmers. Others say Bulog will probably just tighten quality requirements for the rice it buys from farmers.

"A lot of money will be needed this year for rice procurement and I am sure it will be a very tough job for the government," he said.

"But it's good that we have so much rice, especially since we will soon be having general elections," Saragih added. (pwn)