Sjarifudin hails plan to scrap Bulog monopoly

JAKARTA (JP): Minister of Agriculture Sjarifudin Baharsjah said yesterday he fully supported the government's plan to scrap the National Logistics Agency's (Bulog) trading monopoly in several food commodities.

He said the deregulation plan would give more benefits to farmers and force commodity producers to enhance competitiveness in a free market.

"I have repeatedly asserted that the more developed our economy is, the more stable prices will be. Therefore, the plan to reduce Bulog's (monopolistic) functions indicates that our economy has reached a more developed stage," Sjarifudin said after presenting dedication and development awards to 52 businesspeople and officials at his ministry.

Coordinating Minister for Economy and Finance Saleh Afiff said last week the government was preparing measures to abolish Bulog's trading monopoly in food commodities including wheat, soybeans, garlic, onions and sugar, but not rice.

Afiff said the plan was facing strong objections from several ministers.

Sjarifudin said he fully backed the deregulation plan, citing Bulog's monopoly in sugar and cooking oil trade as among top priority to be abolished.

He said the abolishment of Bulog's monopoly over the importation of refined sugar would create a free market in the country which would subsequently force sugar producers to work more efficiently.

"The country's sugar producers need to be exposed to import competition to force them to work more efficiently," he said.

Cooking oil

Sjarifudin said he had issued an order to state-owned plantations to stop supplying Bulog with crude palm oil (CPO) starting this month.

Bulog receives 20,000 tons of CPO monthly from state plantation companies which the agency refines into cooking oil at private mills. The cooking oil is used to stabilize market prices.

Sjarifudin said he had ordered PT Perkebunan Nusantara IV and PT Agrintara to supply Bulog with cooking oil equivalent to 20,000 tons of CPO monthly, starting this month, for its market operations.

PT Perkebunan Nusantara IV -- the country's single largest CPO producer -- has a CPO refining plant in Belawan, North Sumatra.

PT Agrintara, which is owned jointly by all state plantation companies, operates a palm oil refining, fractionation and oleochemical plant in Batam with a daily capacity of 1,000 CPO.

"We think it is more effective to supply Bulog with cooking oil instead of CPO which has yet to be refined at private mills," Sjarifudin said.

Agrintara's current production is adequate to stabilize the price of cooking oil in the country.

Agricultural analysts said yesterday Sjarifudin's move would make Bulog's business partners, which for years had enjoyed the monopoly of processing Bulog's CPO, lose another business opportunity. (jsk)