Govt raises rice price, maintains urea subsidy
Govt raises rice price, maintains urea subsidy
JAKARTA (JP): The government decided on Saturday to raise the
floor price of rice, while maintaining its subsidy for the
domestic sale of urea fertilizer in a bid to increase farmers'
income.
"However, the government decided to abolish the subsidy for
the sales of ZA and TSP fertilizers, whose utilization is very
limited, by increasing their prices as of today," Minister of
Information Harmoko said after a cabinet meeting at the Bina
Graha presidential office on Saturday.
The meeting, chaired by President Soeharto, was attended by
Vice President Try Sutrisno, economic ministers and first echelon
officials.
Harmoko said the floor price of unhusked rice paid by the
National Logistics Agency (Bulog) to village cooperatives will be
raised by 11.11 percent to Rp 400 (18.32 U.S. cents) per
kilogram, and husked rice by 11 percent to Rp 657 beginning Jan.
1, 1995.
The price of ZA fertilizer was raised by 13.46 percent to Rp
295 per kilogram and TSP fertilizer by 41.18 percent to Rp 480 as
of Saturday, while the urea price is being maintained at Rp 260,
he said.
He said increasing the rice price, coupled with maintaining
the urea price, will help increase the income of farmers by 7.77
percent and raise the index of their real income to 104.67 from
99.3 at present. "This is expected to encourage farmers to
increase the country's rice production by three percent next
year," he said.
However, he noted, the rice and fertilizer price hikes will
likely raise inflation by 0.65 percent.
Harmoko said the government has also introduced four new
varieties of rice whose plants will be more resistant towards
droughts and adaptable to red soil.
The new varieties, called Gajah Mungkur, Kalimutu, Jatiluhur
and Way Raren, are produced from combinations of seeds from
Indonesia and other countries, including Kenya and Nigeria.
Export
Harmoko said the cabinet meeting also discussed the country's
exports, which reached $3.5 billion in July, consisting of $821
million in oil and gas exports and $2.68 billion in non-oil
exports.
Because the country's July imports reached $2.62 billion, it
enjoyed a trade surplus of $884.6 million in that month, he said.
He said Indonesia's cumulative exports during the first seven
months of this year were recorded at 21.91 billion and its
imports at $17.37 billion, thereby resulting in a trade surplus
of $4.54 billion.
The January-July exports consisted of $5.36 billion in oil and
gas exports and $16.55 in non-oil exports, he said.
The minister said the extension of banking credits as of the
end of July reached Rp 167.7 trillion ($76.8 billion), 12.8
percent higher than the Rp 148.56 trillion as of the end of last
year.
He said the money supply increased by 12.3 percent to Rp 41.59
trillion as of the end of August from Rp 37.03 trillion as of the
end of last year.
Harmoko said the cabinet meeting also discussed the 17.4
percent increase in tourist arrivals to 2.16 million --
generating $2.53 billion in foreign exchange revenues for the
country -- during the first eight months of this year over the
same period last year. (riz)
Editorial -- Page 4