Indonesia gears up to boost rice output

Indonesia gears up to boost rice output

PHUKET, Thailand (Reuters): Indonesia, whose projected 6.25 million-metric ton rice purchases this year have stunned the world, will boost output to reduce dependence on imports, a senior government official said on Thursday.

But it could take some time before the country with a population of 202 million could become self-sufficient again, said P. Suharno, head of Bulog's (National Logistics Agency) Research and Development Department.

The Indonesian government had previously set 2001 as a target date for self-sufficiency.

Suharno told Reuters in an interview that the government had earmarked Rp 4.3 trillion (US$573 million) for credits to be extended to rice farmers, the biggest credit budget ever.

"The government will provide very soft loans for farmers so that they can use this money to buy fertilizers and pesticide to use in their farming and increase production," Suharno said.

"The rupiah has stabilized and that will reduce the cost of imported chemicals and raw materials. The amount of credit is the biggest ever. In the past few years, the government provided only around 200 billion rupiah annually," he said.

New high-yielding strains were being distributed to farmers and experts as well as thousands of students mobilized to help farmers increase the yield, the official said.

Suharno said he expected rice output next year to be better than 46.44 million tons seen this year and the country was very likely to import less.

Most of the rice in the country comes from the main island of Java. The rice cultivation area is estimated at around 11.06 million hectares.

"We don't have the forecast for next year yet but I am convinced it will be better than this year. The good price will provide good incentives for farmers to grow rice. Since the local rice price is no longer subsidized by the government, it has risen sharply," he said.

"The rain has also improved. The reason Indonesia had to import a lot of rice last year and this year was because of the drought. Late planting means we have to import. If the planting is late by two months, it means we have to import around four million tonnes," he said.

Slayton & Associates, a leading U.S. rice consultant company, has forecast that Indonesia would import two to four million tons of rice next year compared with 6.25 million tons projected for this year.