Govt officially extends rice import ban until December

Zakki P. Hakim, The Jakarta Post, Jakarta

The government has officially extended the rice import ban until the end of this year, following a confirmation from the Ministry of Agriculture that the country's rice stocks will be sufficient to meet national demand.

Minister of Trade Mari E. Pangestu said she had signed an order on the ban's extension last week.

"Rice imports will continue to be banned until Dec. 31, 2005," she told The Jakarta Post over the phone while on an official trip to Beijing.

Her trip to Beijing, she said, was part of the preparations for President Susilo Bambang Yudhoyono's visit to China in mid- July.

Coordinating Minister for the Economy Aburizal Bakrie and Indonesian Chamber of Commerce and Industry (Kadin) chairman Mohamad S. Hidayat were also taking part in the trip.

Mari said the rice import ban would be lifted if the average price of medium-quality rice exceeded Rp 3,500 (36 U.S. cents) and the State Logistic Agency (Bulog)'s rice stock declined to below one million metric tons.

Earlier reports said that the national rice stock as of June 20 totaled 1.8 million tons, while the current average price of medium-quality rice was Rp 2,750/kg.

Dow Jones Newswires quoted Minister of Agriculture Anton A. Apriyantono last week as saying that Indonesia would have a rice stock of 4.2 million tons by the end of this year.

The government initially imposed the ban from January 2004 to July 2004, then extended it in August last year until the end of 2004 on the back of expectations of robust domestic output.

In December 2004, the government extended the ban to June 2005 due to a sufficient rice stock and good harvest.

The ban applies only to indigenous rice varieties and does not block imports of rice strains that are not locally produced.

The ban's extension will likely disappoint Thailand and Vietnam, which have traditionally provided the bulk of Indonesia's rice imports.

The government's decision reflects its efforts to boost incomes in the agricultural sector, which is dominated by smallholder subsistence farmers.

The government has said that the country's agricultural sector will need fresh investment of up to Rp 77.07 trillion over the next five years for the sector to expand by 3.58 percent in 2009, with about half of the money to be allocated for the development of the food crop sector, including rice.

The plan sets a rice production target of 37.51 million tons for 2009, compared to this year's forecast production of 35.77 million tons.

Anton said the money would be allocated to maintain and develop rural infrastructure, as well as efforts to provide financing schemes for farmers.

He said the country badly needed to improve its agricultural infrastructure, especially its irrigation systems, of which 40 percent were estimated to be in poor repair due to lack of maintenance.

The fresh investment would also be used for optimizing land use, developing rural infrastructure, and ensuring better post- harvest systems.