Incentives for rice farmers hailed

Incentives for rice farmers hailed

Adianto P. Simamora, The Jakarta Post, Jakarta

Experts welcomed on Friday the government's plan to provide
incentives for rice farmers, but said that the government must
also curb the smuggling of cheap rice into the country, which has
been hurting farmers' income.

"It is a sympathetic move. The government wants to ease the
burden on farmers by providing the incentives ... But without
curbing the illegal import of rice, the incentives will not
benefit farmers," Bayu Krisnamurthi, director of the Center for
Development Studies at Bogor Institute of Agriculture (IPB), told
The Jakarta Post.

The Ministry of Agriculture said on Thursday it had proposed a
hike in the floor price of unhusked rice by 15 percent, to Rp
1,746 per kilogram (kg); an increase in the import tariff on rice
to Rp 735 per kg, from Rp 430, and a fertilizer subsidy.

The floor price is the reference price level used by the State
Logistics Agency (Bulog) to purchase rice from farmers for
reserves purpose.

Farmers have long called for such incentives amid the rising
cost of production and the massive inflow of cheap imported rice
products. An increase in the import tariff is expected to limit
rice imports.

Under the proposed fertilizer subsidy policy, the price of
urea-based fertilizer, for example, would reduce, to Rp 1,150 per
kg, from the current Rp 1,400.

Bayu, however, said that the higher import tariff could
trigger private importers to ship in illegally cheap rice
products.

He said that the customs office had a strategic role to
prevent the smuggling of rice.

Chairman of the Indonesian Farmers Association (HKTI) Siswono
Yudhohusodo concurred.

"Curbing illegal rice imports is essential if the government
wants to encourage local farmers to continue planting rice,"
Siswono told the Post.

He said that it was impossible for local rice products to
compete with cheaper imported rice.

He cited as an example that smuggled rice from Thailand was
being sold here at Rp 1,700 per kg, compared with the price of
local rice at around Rp 2,500 per kg.

He said that the massive influx of cheaper imported rice was
an indication of the government's inability to protect the
interests of local farmers.

Rice is a strategic commodity in this country because it is
the staple foodstuff of the more than 210 million population.

The government wants to boost the production of rice as part
of efforts to ensure national food security. In 1984, the country
managed to obtain self-sufficiency in rice but since then
production levels have declined for a variety of reasons.

The government is targeting rice production this year at 52
million tons of unhusked rice, equal to about 30 million tons of
milled rice.

Bayu said that the above proposed incentives were short-term
measures to help lift the profit margin of rice farmers, but
warned that fundamental problems, such as poor irrigation
systems, the low quality of seedlings and a decline in the area
devoted to rice growing, had also to be tackled by the
government.