Govt raises rice price to increase farmers' income

JAKARTA (JP): The government announced yesterday a 17 percent increase in the producer floor price of unhusked rice to Rp 700 (about 8 U.S. cents) per kilogram from Rp 600 to increase farmers' incomes.

Chairman of the State Logistics Agency (Bulog) Beddu Amang said the increase, effective last Wednesday, was the second raise in three months and was expected to further encourage farmers to boost rice production.

"The main objective of the rice price increase is to improve the real incomes of the farmers," Beddu said in a news briefing.

Beddu said the government also raised the price of unhusked rice procured by Bulog from village cooperatives by 16.2 percent to Rp 716 from Rp 616 per kg.

The price of unhusked rice procured by Bulog from parties other than village cooperatives was increased by 16.4 percent to Rp 710 from Rp 610 per kg.

The price of milled rice procured by Bulog from village cooperatives increased 15.8 percent to Rp 1,125 from Rp 971 per kg and from nonvillage cooperatives by 16 percent to Rp 1,115 from Rp 961 per kg.

The government raised the producer floor price of unhusked rice and husked rice by between 13 percent and 14.5 percent in January.

Beddu said that Bulog expected to purchase about two million tons of rice from local rice growers for the 1998/1999 fiscal year.

Last fiscal year, he said, Bulog, which bought rice from farmers through cooperatives, procured about 1.95 million tons.

Beddu said that Indonesia's rice stocks currently stood at 2.2 million tons, which are sufficient for market operations to stabilize the price until the end of this calendar year.

"Our rice stocks are enough until the end of this year. Our stocks currently total 2.2 million tons and we are still receiving rice aid from other countries," he said.

He noted that the Japanese government had pledged to donate 500,000 tons of unhusked rice and Thailand also agreed to grant 5,000 tons of rice. In addition, Taiwan would give 200,000 tons while Vietnam would give 10,000 tons as a loan.

Beddu admitted that the delay in rice harvesting by about 1.5 months had resulted in the sharp decline in Bulog's local procurement.

"Rice procured by Bulog in the January to March period this year was only 200 tons, down sharply from 581,000 tons in the same period last year," he said.

He said that about 50 tons of the rice were procured in Aceh while the remaining 150 tons came from East Java. Other provinces, he said, had not begun harvesting rice due to delayed planting.

Beddu declined to say how much rice needed to be imported, saying it depended on the coming harvest. He added that the amount would be decided after August.

The Ministry of Agriculture said last month that the delay in rice planting had adversely affected rice production this year. This year's harvest was estimated at 45 million tons of unhusked rice.

Most of the country's farmers usually begin rice planting about October -- the start of the rainy season -- and begin harvesting in February. Due to the prolonged dry season last year, many farmers began planting rice only in December.

Beddu said that Bulog still maintained its market operation, selling approximately 17,000 tons per day. (gis)