New logistics chief

New logistics chief

State Minister of Food Ibrahim Hasan's relinquishing of his
concurrent post as chief of the National Logistics Agency (Bulog)
yesterday seemed rather unusual. After all, we have long been
accustomed to the normal bureaucratic scheme of things whereby
the official postings for key officials are based more on a fixed
tenure -- normally five years, but extendable -- rather than on
performance.

That is the reason, we think, why State Secretary/Minister
Moerdiono felt it necessary to explain yesterday that President
Soeharto had planned for a long time to separate the logistics
agency's function from the office of the food minister. Hasan,
who was once deputy chief of Bulog, was appointed as head of the
logistics agency in March, 1993, concurrently with his assignment
as the minister of food in the Sixth Development Cabinet.

Nonetheless, because Moerdiono, when he installed Beddu Amang
as the new chief of Bulog, talked at length about the unusually
high inflation in recent months (with the steep rises in food
prices viewed as mainly responsible for the hike in the consumer
price index) Bulog's performance got the spotlight. The bottom
line conclusion is that Bulog has failed to perform its main task
of stabilizing the prices of basic commodities, most notably rice
-- the nation's staple food.

Hasan himself has admitted that Bulog's domestic rice
procurement last year totaled only 938,000 tons, the lowest level
in the past 15 years. Because the rice price has been on the rise
steadily over the last 10 months, the food agency, its buffer
stocks already way below the normal level of two million tons,
has been forced to step up its market operations in a bid to curb
the trend. Between April 1994 and January 1995, for example,
Bulog was forced to draw down almost 800,000 tons on its already
all-time low stock level.

Informed sources said Bulog's stocks had at one time fallen to
as low as 200,000 tons, a level which is not sufficient even to
cover two months of food allowances for the government personnel
and employees of state-owned agro-based companies. The food-
supply situation has been saved from a crisis only by 900,000
tons of new stocks derived from imports and the early repayment
of rice loans by several foreign governments.

That situation is worrisome indeed because the supply of rice,
besides weighing heavily in the components of the consumer price
index that measures the inflation rate, may also affect the
political stability of the nation.

The question, though, is whether Bulog is the only agency that
should be blamed for the inadequate rice supply. Bulog is in
charge of managing stocks only. It procures surplus production
from the farmers to maintain the government-fixed floor price and
releases stocks to the market to stabilize prices at the desired
level. But the stocks should come from the rice fields whose
development and management are the responsibility of the Ministry
of Agriculture.

The Central Bureau of Statistics has announced that national
rice production declined by about four percent last year. In
fact, official statistics show that over the last five years only
1992 posted a bumper harvest with an almost eight percent
increase in production. The output was also down by 0.15 percent
in 1993 and by two percent in 1991, and up only by one percent in
1990. The sharp drop last year should naturally be blamed on the
prolonged drought. But further analysis also indicates that the
growth in the yield rate of our rice fields over the last five
years has been rather negligible. Nationwide, the average yield
rose from 4.25 tons per hectare in 1989 to 4.38 tons/ha in 1993.
Even in Java, where the bulk of irrigated rice fields is located,
the average rice yield rose slightly from 5.02 tons/ha in 1990 to
5.13 tons/ha in 1993.

The trend, we think, is worrisome as it indicates virtual
stagnation in the productivity of our rice fields. When this
trend is combined with the steady loss of irrigated land in Java
to industrial and housing developments, the deceleration in the
growth of the rice supply becomes even more worrisome. Under such
a situation, Bulog, however professional its management may be,
and however smart its market analysis may be, will not be able to
perform its task properly.

The rice production trend makes it appear as if the Ministry
of Agriculture has become rather complacent and is lacking in
both the innovation to further increase the yield of existing
rice fields and the drive to open up new fields outside Java. If
the Ministry of Agriculture is not jolted by the current rice
supply situation to a new all-out effort to steadily increase
production, we will become increasingly dependent on imports.
That is a painful setback from our internationally-commendable
record of rice self-sufficiency, which was achieved in 1984.