Govt seeks to postpone new rice imports

KARAWANG, West Java (JP): The National Logistics Agency (Bulog) will ask for a delay in the shipment of 175,000 tons of rice imports until July in order to shore up prices in the local market.

Bulog chairman Rizal Ramli told reporters on Wednesday that he would renegotiate the date of shipments from existing deals.

The rice was bought from importers at an open tender in February for Chinese and Pakistani rice, and was paid by loans from the Islamic Development Bank in Kuala Lumpur. The loans were to be used by May.

"We will negotiate with the bank to extend the loan and delay the shipments," Rizal said after a visit to the rice-producing area of Karawang, West Java.

Bulog would also ask for a postponement on the shipment of 17,000 tons of rice from the United Nations' World Food Program, he said.

Rizal, a government critic who was given the Bulog post by President Abdurrahman Wahid this week, blamed the plunge in local rice prices on large amounts of imports by Bulog and private traders as well as on a good harvest.

The price of locally produced unhusked rice fell as low as Rp 700 a kilogram, compared to the government's targeted floor-price of Rp 1,020.

Imports continued to flow in spite of a 30 percent tariff imposed at the start of the year, reaching 42,000 in January and 38,000 in February.

"We cannot ban private sectors from importing rice," Rizal said.

Rizal believed that the tariff would be effective if enforced properly, adding that he had heard rumors of smuggling going on.

To ensure the effectiveness of the tariff, Bulog has asked surveyor company Sucofindo and the Directorate General of Customs and Excise to help verify the quality and quantity of imported rice, either by private importers or by the agency, starting this month.

A report will be made regularly to the Director General of International Trade and to Bulog, Rizal said.

"This program is not permanent and will be reviewed every six months," he said.

The agency also plans to buy unhusked rice extensively from farmers through village cooperatives, he said.

The government has extended a loan through state owned Bank Rakyat Indonesia (BRI) of Rp 500 billion to help cooperatives with the purchase.

The fund, categorized under the "credit for food procurement", had been due at the end of March, but BRI branches have not begun disbursing it because many cooperatives still owed them money from special government loans for farmers.

"BRI has treated the less-than-one-percent risk of the food procurement credit with the farmers credit scheme, which has an 80 percent risk," Rizal said. "This is wrong and I will settle this problem with the bank as soon as possible."

Of the Rp 8 trillion farmers credit scheme extended by BRI, less than Rp 2 trillion had been returned, according to Rizal.

"We would like to remind BRI that Bulog is dealing in 'big' business. If the bank will not help, we will not hesitate to take our business elsewhere," he warned. (10)