Protectionist rice policy criticized
Sari P. Setiogi, The Jakarta Post, Jakarta
Government moves to protect local rice farmers against cheaper imported rice products would only increase the burden on small farmers and the poor, agricultural experts said last week.
The addition of tariffs would increase the price of rice in the local market, which in turn would put more financial pressure on farmers, many of whom were net rice consumers, said Erwidodo, a senior researcher at the rural ministry's Center for Agricultural Socioeconomic Research (CASER).
Speaking at a seminar sponsored by the United Nations Support Facility for Indonesian Recovery (UNSFIR), Erwidodo said government policies should aim at boosting the productivity and efficiency of the agriculture sector in order to help farmers compete with cheaper imported rice products.
"The problem of the local rice farmers is that they do not have access to the latest technology available, which they need to raise their productivity (to compete)," Erwidodo said.
"Another problem is that many farmers only have very small plots of land."
A recent study showed rice farmers who owned less than 1.5 hectares of farming land, only received 28 percent of their household income from farming the crop.
"Production efficiency could be enhanced by consolidating and expanding farm sizes, for example," Erwidodo said.
He suggested minimizing -- if not totally avoiding -- any policies that resulted in higher rice prices at home.
The Ministry of Industry and Trade has been criticized for before for introducing protectionist measures in its trade policy. Last year, it introduced a 30 percent tariff on rice imports.
Earlier this month it introduced a temporary ban on rice imports to protect farmers against imports during the approaching harvest.
The government was prone to introducing protectionist measures particularly in the lead-up to the general elections, in a bid to woo the rural sector, Erwidodo said.
Bogor Institute of Agricultural Development speaker Bayu Krishnamurthi said many small rice farmers faced problems of economies of scale.
"It is not protectionism that our rice farmers need. The main problem among our rice farmers is poverty," he said, pointing out that most farmers only had small parcels of land, which made their farming inefficient.
World Bank senior economist Neil McCulloch said based on the 2001 National Economic Survey (Susenas), increasing the price of rice would only help a few producers.
"In rural areas, 60.6 percent are non-rice producers while 10.3 percent are rice producers who are also rice consumers. The high prices of rice are experienced as well by those rice farmers, so it is not helping their living," he said.
Proportion of Net Producer Household
Non- Rice producers Rice producers Total
Producers who are net who are net
consumers producers --------------------------------------------------------------------- National 38,330,480 3,364,224 9,659,561 51,353,820
(74.6%) (6.6%) (18.8%) (100%)
Urban 20,762,432 383,026 1,208,744 22,354,202
(92.9%) (1.7%) (5.4%) (100%)
Rural 17,568,048 2,980,753 8,450,817 28,999,618
(60.6%) (10.3%) (29.1%) (100%) --------------------------------------------------------------------- Source: "Trade and Poverty in Indonesia: What are the Links", Neil McCulloch, The World Bank, 2004, paper presented at the workshop on Trade and Industry, organized by UNSFIR.