House members concerned over low rice prices

JAKARTA (JP): House of Representatives members voiced their concern yesterday with the low prices that the National Logistics Agency (Bulog) pays to farmers for their rice.

Mrs. Bambang Sigit from the House Commission IV overseeing agricultural and forestry affairs, said in a hearing with Director General for Food Crops and Horticulture Amrin Kahar that farmers in Nganjuk of East Java, for example, claim that they can sell their rice to private vendors at prices of up to Rp 750 per kilo (34 U.S. cents), far higher than the Rp 657 offered by Bulog through village cooperatives.

"When I heard this from the farmers, I told them to sell to private vendors. I didn't know if this was right, but I did it only out of concern for their welfare," she said.

She said that the low prices may be the reason that farmers are reluctant to sell rice to Bulog. "Perhaps, that is why Bulog's stocks of rice remain low," she said.

Bulog, which was set up to manage the distribution of basic food commodities and maintain their prices at a reasonable level through market operations, has lately been criticized for not being able to keep staple food prices at a minimum level.

Prices of staple food, especially rice, have been soaring lately and added significantly to the country's high inflation rate.

Amrin acknowledged that many factors influenced the production level of rice, including unfavorable weather and the decline in irrigated land in Java due to industrial and housing developments.

The total area of rice fields in the country, he said, dropped from 16.7 million hectares in 1983, of which 5.5 million were in Java alone, to only 15.9 million hectares in 1993, of which 4.6 million hectares were in Java.

Outside Java, where soil is less favorable, the area of rice fields increased at a slow rate from 11.2 million hectares in 1983 to 11.3 million hectares in 1993.

Although rice productivity has been increasing at a rate of three percent from 1988 to 1993, it dropped by 3.2 percent to 46.6 million tons last year. Compared to 1993, rice fields have also decreased by 2.5 percent to 10.7 million hectares last year and productivity by 0.7 percent to 4.35 tons per hectare.

Nonetheless, State Minister of Food Ibrahim Hasan told House members on Thursday that Indonesia, from its international trade of foodstuffs, recorded a 26 percent increase to $2.2 billion over 1993.

He said that foodstuff exports last year rose by 30 percent to $3.94 billion over 1993 in spite of the 36 percent increase in imports to $1.77 billion.(pwn)