Ministry eyes rice-for-planes trade deal
Ministry eyes rice-for-planes trade deal
Zakki P. Hakim, The Jakarta Post, Jakarta
The Ministry of Industry has proposed a countertrade deal
involving rice imports of 250,000 tons and exports of aircraft
produced by state aircraft maker PT Dirgantara Indonesia (PTDI).
"PT Dirgantara Indonesia needs to market its products, and we
need to import rice," Minister of Industry Andung A. Nitimihardja
said on Monday on the sidelines of a hearing with the House of
Representatives' Commission VI overseeing industry, trade and
investment.
He said he had discussed the proposal with the government
agency in charge of importing and distributing key commodities,
the State Logistics Agency (Bulog) and its chief Widjanarko
Puspoyo about the possible swap.
"I have informed (him) that Thailand is interested in PTDI
products. It seems that the Bulog head agrees," Andung said,
adding that Thailand could be interested in PTDI's CN-235
aircraft.
It will not be the first time that Indonesia has made plans to
swap planes for rice with Thailand. In 2001, Bulog had revealed
the same plan, but the deal was delayed due to a disagreement
over the items to be swapped.
In April, Indonesian Ambassador to Thailand Ibrahim Yousouf
told The Jakarta Post that Thailand purchased seven PTDI planes,
which are being used for cloud-seeding.
"I will offer them more planes. The Thai Royal Navy is
interested in buying CN-235 Maritime Patrol Aircraft," he said.
Thailand, aside from Vietnam, has been traditionally providing
the bulk of Indonesia's rice imports before it banned rice
imports in January 2004.
Indonesia then extended the ban in August that year until the
end of 2004, due to expectations of robust domestic output. In
December 2004, it extended the ban to June 2005 due to official
assessments of sufficient stocks and a good rice harvest, and
later extended it again until the end of this year.
But earlier this month, the government decided to allow Bulog
to gradually import up to 250,000 tons of rice starting next
month, in anticipation of higher demand ahead of the Ramadhan and
Idul Fitri holidays.
Minister of Trade Mari E. Pangestu said on Monday that the
government had not yet granted official permits for Bulog to
import rice.
"The policy is aimed at stabilizing prices through stronger
stocks. The imported rice will not be distributed to the market,"
she said during an impromptu visit to Jatinegara market, Cipinang
rice market and a Carrefour hypermart outlet in East Jakarta.
The import permit was given to help Bulog maintain its stock
above one million tons until the end of the year as the agency is
responsible for providing the commodity for the government's
rice-for-the-poor (Raskin) program.
Through the program, the government sells subsidized rice at
about half the market price, with a monthly volume of
approximately 180,000 tons.
The government will only lift the rice import ban if the
average price of medium-quality rice exceeds Rp 3,500 and Bulog's
rice stock declines to below one million tons.
The latest report showed that the current national stock stood
at around three million tons, of which 1.6 million tons were held
by Bulog. Meanwhile, the average price of medium-quality rice was
Rp 2,950 in Cipinang market on Monday, well below the Rp 3,500
threshold.
But Commission VI deputy chairman Ade Komarudin said that
countertrade had proven to be an ineffective measure, thus it was
not recommended.
"Past experiences show that countertrade is not effective, as
it would involve inter-departmental coordination. It's
complicated, not as simple as it may sound," he said.
Ade also made a reference to the controversial case of a
countertrade of local rice for Russian Sukhoi jetfighters.
The Sukhoi purchase made headlines in 2002, when the
government was accused of a breach in purchasing procedures by
excluding the Ministry of Defense from the entire process.
The government bought four Sukhoi jets worth US$265 million
from Russia based on a countertrade deal involving 11
commodities.