HKTI asks Megawati to raise rice import tariff

Fabiola Desy Unidjaja, The Jakarta Post, Jakarta

The Indonesian Farmers Association (HKTI) asked President Megawati Soekarnoputri on Wednesday to raise import tariffs on rice in a bid to help protect local farmers.

HKTI chairman Siswono Yudohusodo said that the tariff should be increased to 65 percent from the current 30 percent to prevent the domestic market from being flooded with cheaper imported rice.

Speaking to reporters following a meeting with Megawati, he said that HKTI was very concerned about the trend toward increased rice imports.

He said that Indonesia was now considered the largest rice importer in the world, buying the product from Vietnam, Thailand, China and the United States.

"Last year, we imported around 1.2 million tons of rice, of which 63 percent was imported by private companies, and the remainder by Bulog," he said, referring to the state logistics agency, which has a mandate to maintain the domestic supply of rice at affordable prices.

He added that since 1998 there had been excessive imports of rice into the country.

Indonesian farmers have long demanded the government take measures to deal with the strong influx of imported rice, including by boosting the import duty.

Analysts have said that although raising rice import duty to 65 percent is not against the World Trade Organization's rules, the government has been reluctant to do so due to pressure from the International Monetary Fund, which is providing a multibillion dollar bailout loan to the country.

Experts have also said that other developed nations have adopted protectionist policies to protect their farmers.

The government previously said that it would maintain the current 30 percent rice import tariff at least until next year.

The Ministry of Agriculture's rice policy study agency has been assigned to evaluate various measures to protect rice farmers.

Opponents of higher rice import tariffs have argued that such a policy move would not necessarily provide benefit to the country's farmers as they are net rice consumers.

Imposing a high import tariff would cause the price of rice to soar, which would hurt poor families.

Indonesia's domestic rice production is projected to grow by 2.5 percent to 32.67 million tons of milled rice next year, due to the government's efforts to intensify rice planting and the distribution of seed, fertilizer and pesticide.

Elsewhere, Siswono said that HKTI also protested plans by the Ministry of Industry and Trade to allow the import of chicken thighs from the U.S. at a price of 30 U.S. cents per kilogram.

He said that this policy would threaten some 80,000 poultry breeders.