Millions benefit from special rice program

JAKARTA (JP): The government program to sell heavily subsidized rice to poor people has benefited some 49 million people since its launching in August last year, according to consultants hired to assess the scheme.

The program, jointly administered by the Office of the State Minister of Food and Horticulture and the State Logistics Agency (Bulog), channeled 1.8 million metric tons of rice to 10.5 million families, Steven R. Tabor of the Economic Management Services International, announced on Thursday.

Under the program, called the special market operation, the government sells 20 kilograms of medium quality rice monthly at Rp 1,000 (13 U.S. cents) per kilogram to designated poor families.

This is in contrast to market prices of around Rp 2,600.

Tabor, who attributed Bulog and its massive distribution network for the success, said the program cost the government Rp 2.7 trillion (US$360 million) for the year's duration, and had had no impact on the market rice price.

In contrast, the old price stabilization program would have cost the government approximately Rp 16 trillion and a producer- tax effect of Rp 21 trillion. The previous program, which was also administered by Bulog, had a 23 percent cost-effectiveness in reaching the poor, according to the report.

"The government should retain the program, as it was proven to be efficient and cost-effective," Tabor said.

He pointed out that the program also induced an indirect transfer of income amounting to Rp 6,413 per person a month, representing an average 10 percent addition to their income.

Tabor acknowledged that the program was not leak-proof, with some 15 percent of the rice going to unintended beneficiaries. This occurred in spite of close monitoring and evaluation by non- governmental organizations and universities.

Muharto, director of planning and development at the Office of State Minister of Food and Horticulture, said the program was prefinanced by Bulog. The government only paid for 800,000 tons of rice, leaving about one million tons unpaid for, he said.

Tabor said that as of last week, the government had an outstanding debt of Rp 368 billion to Bulog.

The program has not been as successful in urban areas as it has in rural areas because of administrative problems in identifying rightful recipients.

To overcome the problem, the government and the UN World Food Program have entrusted non-governmental organizations to administer the program in five major urban centers.

H.S. Dillon, who chairs the Center for Agricultural Policy Studies, said the program was the government's main instrument in meeting the food needs of the poor.

"This is the most appropriate step in upholding human rights in our country," said Dillon, who is also a member of the National Commission on Human Rights.

Dillon, however, warned against complacency after the success of the program, noting that some recent government policies had once again shown to have "urban bias" tendencies.

Falling into this urban bias category was the government's decision to terminate the program, in spite of its success, at the end of the current fiscal year on March 30 next year, he said. (02)