Soleh admits rice smuggling continuing unchecked

JAKARTA (JP): Minister of Agriculture Soleh Solahuddin admitted on Tuesday that the smuggling of rice from West Kalimantan to neighboring eastern Malaysia was continuing.

"It is very difficult to monitor because there are a lot of small, unofficial roads linking the two areas which cannot be guarded due to the lack of security personnel," Soleh said in a hearing with House of Representatives Commission III for agriculture, forestry and plantations, transmigration and food affairs.

Soleh said the much cheaper local price of the staple food was the main reason for the smuggling.

"The smugglers are traders and also small farmers. Traders sell the subsidized rice to take advantage of the high disparity between the government's subsidized price and the international market price in Malaysia."

Soleh said farmers did not consider that selling rice in Malaysia was illegal, but merely a continuation of their traditional trading relationship.

The government has distributed more than 64,000 metric tons of rice from other provinces in West Kalimantan and imported more than 10,000 tons from April to August.

"Despite the good harvest the province still suffers a shortage of rice in the domestic supply due to the smuggling. Therefore, the prevention of illegal exports must be intensified," he said.

The ministry and the West Kalimantan provincial administration are working together to prevent the smuggling from becoming widespread.

"We will take various steps (to probe the smuggling), and we will cooperate with the security apparatus and customs office," Soleh said.

"The West Kalimantan provincial administration has ordered regents of the border areas to bar people from bringing basic commodities to Malaysia. It has also cooperated with its Malaysian counterparts to stop illegal trading."

Soleh also announced that the government would provide Rp 5 trillion to subsidize fertilizers during this year planting season until next year's harvest in March.

He said the funds would be used to subsidize for million tons urea fertilizers, one million tons of superphospate 36 and ZA respectively and 400,000 tons of Kalium chloride.

Soleh said the government was formulating a better scheme in distributing the subsidized fertilizers to avoid malfeasance.

He admitted that most of the subsidized fertilizers earmarked for farmers was sold instead to plantation companies.

He said a probe was still underway into the amount of government losses caused by the irregularities.

The government has subsidized three common fertilizers -- urea, ZA and superphospate 36 -- to assist farmers amid soaring prices of fertilizers and to boost the country's rice and food crop production. Subsidies for other types of fertilizers have been abolished gradually since 1990.

Subsidies, limited to food crops and horticulture farming, are exclusive for farmers.

The government previously targeted the fertilizer subsidy at Rp 2.1 billion.

Soleh said many major plantation firms bought the fertilizers at subsidized prices due to unscrupulous distribution practices and collusion committed by officials of fertilizer producer and village cooperatives.

Most of the malfeasance occurred in fertilizer distribution at the regency level and in village cooperatives' warehouses, he said.

"The move will be taken to cut the distribution chain and to end the unfair practices," Soleh said. (gis)