Govt raises rice and fertilizer prices

Govt raises rice and fertilizer prices

JAKARTA (JP): The government yesterday increased the producer
price (floor price) of unhusked rice by 16.6 percent and
fertilizers by an average of 21 percent to increase farmers'
income and cut back on fertilizer subsidies.

After meeting with President Soeharto at Merdeka Palace
yesterday, Minister of Agriculture Sjarifudin Baharsjah said the
floor price of unhusked rice would be propped up from Rp 450
(19.5 U.S. cents) to Rp 525 per kilogram.

Sjarifudin, accompanied by State Minister of Food Ibrahim
Hasan and head of the National Logistics Agency (Bulog) Beddu
Amang, said the price of unhusked rice procured by Bulog from
village cooperatives was also increased 16 percent from Rp 466 to
Rp 541 per kg.

Unhusked rice procured by Bulog from parties other than
village cooperatives was increased 16.3 percent from Rp 460 to Rp
535 per kg.

Meanwhile, rice procured by Bulog from village cooperatives
increased 16 percent from Rp 738 to Rp 856 per kg and from non-
village cooperatives by 16 percent from Rp 730 to Rp 848 per kg.

Bulog was set up by the government in 1967 to control
distribution and importation of several basic foodstuffs --
including rice, sugar, wheat, corn and soybean -- to ensure
national food security and reasonable incomes for farmers.

Sjarifudin said urea fertilizer prices were increased by 21
percent from Rp 330 to Rp 400 per kg, ZA fertilizer by 27 percent
from Rp 355 to Rp 450 per kg and superphosphate-36 (SP-36)
fertilizer by 14 percent from Rp 525 to Rp 600 per kg.

Sjarifudin said the price increases of unhusked rice, rice and
fertilizers were expected to contribute 1.09 percent to the
annual inflation rate.

The inflation rate dropped to 6.47 percent last year from 8.64
percent in 1995.

He said in real terms the increase in urea prices could give
farmers a 16 percent increase in their income.

Last year, the rice floor price was raised 12.5 percent, when
adjusted for 8.65 percent inflation in 1995 gave a real rise of
only 3.85 percent.

But the increase did not stop the erosion of rice farmers'
terms of trade because the price of granular urea rose 27 percent
and that of urea tablets rose 11 percent in February last year.

Sjarifudin said earlier this week the main objective of the
rice price increase was to further improve the real incomes of
rice growers.

The agriculture ministry estimated that 51 million tons of
unhusked rice or the equivalent of around 33.15 million tons of
milled rice were produced domestically last year. This
represented a mere 2.6 percent increase on the 49.74 million tons
harvested in 1995.

The ministry estimates per capita rice consumption this year
at 130 kg, or 25.9 million tons for the population.

Indonesia, formerly the biggest rice importer in the world,
became self sufficient in 1984. In 1994 however, unfavorable
climates and plant diseases forced the country to revert to
imports.

According to the Central Bureau of Statistics, production in
Indonesia fell by 3.2 percent to 46.6 million tons of unhusked
rice in 1994 -- the lowest level in 15 years -- from 48.2 million
tons in 1993.

Rice is currently the staple diet of nearly 90 percent of
Indonesia's 190 million people. (pwn)