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.