Millions benefit from special rice program

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)