Govt won't up floor price of rice

Govt won't up floor price of rice

Adianto P. Simamora, The Jakarta Post, Jakarta

The government will not raise the floor price of unhusked rice
despite calls from agriculture experts and legislators, arguing
that the current price of Rp 1,500 (about 16 U.S. cents) per
kilogram is more than sufficient to cover farmers' production
costs of between Rp 700 and Rp 800 per kilogram.

"At the moment, we (the Ministry of Agriculture) do not intend
to hike the floor price of unhusked rice," Tjuk Eko Hari Basuki,
secretary of the ministry's Community Development and Food
Security Agency told The Jakarta Post on Tuesday.

A number of agriculture experts and legislators had earlier
called on the government to hike the floor price of unhusked rice
on the grounds that input costs, including labor, fertilizer and
pesticides had already increased. They said that without an
increase in the two-year-old floor rice, farmers would be
discouraged from planting rice, which could pose a threat to the
country's rice reserves.

Rice is an important commodity because it is the main staple
of the country's more than 200 million population

Basuki, however, admitted that in reality many rice farmers
received lower prices for their output.

He said that instead of raising the floor price, his agency
would rather focus on how to ensure that farmers got a fair price
for their rice.

He said that his agency was preparing several measures
including launching a campaign for farmers to maintain stocks
during the current harvest season, and improving the quality of
the unhusked rice by providing direct consultations.

He said that many farmers had often rushed to sell their
output during the harvest period, which had caused pressure on
the price.

The floor price, set by the Ministry of Agriculture, is the
price used for procurements by the state logistics agency
(Bulog).

Earlier, legislators had also asked Bulog to raise its
procurement target for this year from 6 percent to 8 percent of
national production to 10 percent in a bid to help increase the
price of unhusked rice.

Bulog, which buys rice from the farmers as part of its rice
reserves program, has yet to respond.

The country's unhusked rice output this year is projected to
reach 52 million tons.