Govt urged to give income supplement
JAKARTA (JP): The government should provide an income supplement to the needy, instead of subsidized food staple, in a bid to encourage diversification of staple foods, agriculture analysts suggested on Sunday.
Bungaran Saragih from the Bogor Institute of Agriculture said the current policy of a price subsidy hampered food diversification efforts, especially for rice, because it kept prices of rice relatively cheap compared to other foodstuffs.
"Because the government subsidized rice prices, people rely more and more on rice. If they get the income subsidy, I believe many of them will substitute the rice with locally based foodstuffs such as cassava, corn and sago.
"The same problem has also occurred for wheat flour," he said in a seminar on the food crisis held by the Association of Indonesian Catholic Intellectuals.
He recommended the income supplement because it had more likelihood of assisting the target of poor consumers.
The price subsidy often fails to reach those in need, he argued, because traders and distributors gained most from the subsidies.
"But the distribution of this income subsidy will need tight supervision, which will have to involve public and non- governmental organizations. It should be transparent, too," he said.
Center of Agriculture Policy Studies' executive director H.S. Dillon, who also spoke at the same seminar, added that the government's subsidies on fertilizers was flawed and should be discontinued.
Dillon said the high disparity between the subsidized prices of fertilizers domestically and their international market prices had encouraged many parties to misuse them for their own benefit.
He said that the subsidy often did not reach the targeted recipients of small farmers.
Much of the urea fertilizer was exported while the subsidized Kalium Chloride (KCl) fertilizers were sold to plantation firms instead of the farmers, he said.
"I don't understand why the government still maintains its subsidy on input such as fertilizers while the price of rice, the output is currently released under the market mechanism," Dillon told The Jakarta Post.
Bungaran said that the country's food crisis had resulted from the problems in food availability and the declining purchasing power of consumers.
"The government should focus its efforts on improving consumers' purchasing power by providing them with jobs. The jobs should be a real and sustainable work, not only ones from the several temporary labor intensive projects."
Meanwhile, Dillon questioned the government's projection on domestic rice production of 46.29 million metric tons for 1998/1999 fiscal year, saying that it was impossible to forecast now as the crop had yet to be planted.
"How can we make a projection on the production while we haven't started the planting season yet. We do not even know how much is the country's rice planting area this year. The estimation is nonsense.
"The government's recent statement that we will flood the market with rice in harvest time in January and February was also baseless."
Minister of Agriculture Soleh Solahuddin said last month that the country would produce up to 48 million tons of rice this fiscal year due to his ministry's special efforts. (gis)