New rice floor prices expected in February
New rice floor prices expected in February
JAKARTA (JP): The new floor prices of rice are likely to be announced at the beginning of the harvesting season next month, said the chairman of the National Logistics Agency (Bulog), Beddu Amang.
Unlike in previous years, Beddu said the new prices would concur with farm input prices, which include fertilizers and pesticides.
While Beddu refused to say how much, he said last November that the government was planning to increase rice floor prices by at least 10 percent.
Higher than the inflation rate, the increase was expected to assure farmers of a higher real income for rice.
The government decided not to raise the floor prices of rice last October, when market prices were considered high and favorable enough for rice farmers.
The government usually announces new floor prices at the beginning of the October planting season to protect farmers from unusually low prices, though the new prices usually don't become effective until the beginning of the following year.
The current price of unhusked rice, Rp 400 (17 U.S. cents) per kilogram, was announced by the government in October, 1994, and became effective this month.
The government usually sets the new prices of fertilizer prior to the announcement of new floor prices for rice.
Beddu said the government decided to change the timing of the new price announcements when rice farmers began to complain about having to pay higher fertilizer prices.
He then added that Bulog, when procuring rice from farmers in the next (1996-97) harvesting season, would apply stricter quality standards.
"This will be different from the last two years when Bulog set rather loose standards for the rice it bought from farmers," Beddu was quoted by the Republika daily as saying yesterday.
Bulog was set up by the government in 1967 to control the distribution and importation of several basic foodstuffs -- including rice, sugar, wheat, corn and soybean -- to ensure national food security and reasonable incomes for farmers.
Beddu said yesterday he was optimistic his agency would be able to guarantee national food security this year.
Minister of Agriculture Sjarifudin Baharsjah said last month that his office has set its rice production target at 52 million tons, or four percent higher than the 1995 level.
Indonesia, formerly the biggest rice importer in the world, became self sufficient in 1984. In 1994 however, unfavorable climates and plant diseases forced the country to revert to imports.
According to the Central Bureau of Statistics, production in Indonesia fell by 3.2 percent to 46.6 million tons of unhusked rice in 1994 -- the lowest level in 15 years -- from 48.2 million tons in 1993.
The market has not yet fully recovered. Prices of rice in the last sixth months of 1995 reportedly soared in many parts of the countries, forcing Bulog to intervene through market operations with rice supplies which were obtained from imports and other sources.
Last November, Bulog's rice stocks reached 1.3 million tons.
Meanwhile, rice consumption is expected to increase by 1.5 to 2 percent per year due to an increasing population and the diet changes brought about by better incomes.
Rice is currently the staple diet of nearly 90 percent of Indonesia's 190 million people. (pwn)