Rice distribution system 'should be streamlined'

JAKARTA (JP): A city councilor has underlined the importance of cutting the lengthy rice distribution chain to help reduce the price of the essential commodity.

Djafar Badjeber of Commission B for economic affairs said on Monday that market cooperatives should buy rice from Jakarta branches of the National Logistics Board (Dolog) or directly from producers themselves to streamline the distribution chain.

"If cooperatives can get rice directly from Dolog or the farmers and then distribute it to vendors, the price from the farm gate to the market will only rise by a maximum of 12 percent," he said.

Under the existing system, prices rise by an average of 20 percent as the rice is passed from suppliers to distributors to agents, before it reaches the markets then finally the vendors, he said.

Djafar said the more stages in the distribution chain the higher market prices would be.

"It's because each link in the chain marks up the price slightly so that they can make a profit from their involvement in the trade," he said.

"Moreover, a number of unscrupulous suppliers, distributors and agents are known to on occasion deliberately hoard rice stocks to force prices up and increase their own profits," he added.

Djafar said the main problem associated with encouraging cooperatives to cut the number of links in the chain was that they had insufficient funds to buy rice in large quantities.

He reiterated that the administration should find a way to help cooperatives solve their financial problems in conjunction with the banking industry.

Djojo Sutardo of the city regional economic bureau confirmed on Monday that the supply of rice in Jakarta from producers in West Java, Central Java and East Java had returned to normal after being disturbed by the recent riots.

"There's no shortage of rice in the city because supply can still meet demand," he said.

The demand for rice in Jakarta alone was estimated at an average of 2,025 tons a day, while the daily supply of rice at Cipinang central market alone was at least 2,000 tons, he said.

"The only problem is that people do not have enough money to buy the rice," he said, adding that rice prices rose by an average of 8 percent last week. (ind/cst)