Kalla considers tariff on rice imports

JAKARTA (JP): Minister of Industry and Trade Yusuf Kalla said on Friday that he would look into proposals to impose a tax on rice imports in order to protect local farmers, in defiance of an agreement with the International Monetary Fund (IMF).

In his first media conference several hours after he was sworn into office, Kalla said the rice tax was one of several options being considered to cut the price gap between local and imported rice.

He ruled out the option of lowering domestic rice prices.

The successful businessman from South Sulawesi took over the position from Rahardi Ramelan. It was not immediately clear whether he would also assume the chairmanship of the State Logistics Agency (Bulog) which was held by Rahardi.

Bulog carries out market operations to buy and sell rice to stabilize market prices, balancing the interest of farmers who want high prices and urban consumers who want low prices.

Kalla said the flood of imports into the country was undermining sales of local rice. "With zero tax on imports, the gap in prices became too wide," he said.

The country would need permission from the IMF before it could impose tariffs on rice imports. Abolishing the tariffs was one of the terms set by the IMF for its huge bailout program.

Kalla said he was hopeful the IMF would display flexibility since the no-tariff policy was detrimental to the country's interests.

Rahardi dealt with the problem by barring imports of medium to low grade rice.

Kalla did not say whether he would take over the chairmanship of Bulog or whether the agency would be dissolved, which some have recommended.

But he said he personally felt Bulog's presence was necessary to ensure uninterrupted supply of rice to the people at stable prices.

Critics have said that Bulog lost its importance when its role in ensuring supply of basic food needs in Indonesia was reduced under the agreement with the IMF.

Bulog's activities have been limited to rice.

Kalla said that although Bulog now dealt with one commodity, it was the staple food of the people in the country.

The agency's task of balancing the interests of producers and consumers was not an easy one, he said. "We always need a stabilizer such as Bulog."

Kalla was reluctant to talk about his new duties, saying that he needed to study the various policies of his office.

He appealed to the public to give him and the government of President Abdurrahman Wahid the chance to lead the country out of the economic crisis.

He called unfair those who only gave him 100 days to prove himself. He said the task at hand was to restructure the entire economy required him to coordinate his work with other ministries.

Kalla said most of the effort to speed up the economic recovery process must ultimately come from the market itself. (03)