Govt raises budget for Bulog amid drought

Govt raises budget for Bulog amid drought

JAKARTA (JP): Indonesia, hard hit after a long drought last year, has decided to increase the budget of the National Logistics Agency (Bulog) to secure grain, a minister says.

"The Minister of Finance has agreed to add Rp 457 billion (US$207.72 million) to our budget because by December we had spent Rp 3.45 trillion out of the total budget of Rp 4.4 trillion for fiscal 1994-95," said State Minister of Food Ibrahim Hasan, concurrently chairman of Bulog, during a hearing with Commission V of the House of Representatives yesterday.

The increase is required to secure food supplies this year, Ibrahim said.

Indonesia experienced a harsh drought last year, cutting unpolished rice production by almost four percent from 1993's production level of 46.40 million tons.

Indonesia, formerly the biggest rice importer in the world, became self-sufficient in 1984. Rice is the main staple of the population, currently about 189 million.

"The drought last year led to a situation where rice supply amounted to 938,000 tons only, the lowest level in 15 years," Ibrahim said.

The minister added that the shortage forced Bulog to release about 800,000 tons of its rice reserve into the market to push prices down last year.

At present, he added, Bulog has about 850,000 tons of rice in reserve which should be adequate for a six-month period providing the agency is not forced to release any more of it.

"If we have to sell some more, the reserve will be adequate for only three months," he said.

Ibrahim said that depending on the climate this year, there are three possible harvest amounts in 1995 -- up to 1.6 million, 1.8 million or 2.0 million tons.

The Ministry of Agriculture has projected that rice production will grow by eight percent this year.

The government said recently that it expects to have imported about 900,000 tons of rice since last year up to March this year. (hdj)