HKTI asks Megawati to raise rice import tariff

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.