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.