GOVT'S RICE EXPORT PLAN QUESTIONED

By Andi Abdussalam

Jakarta, April 16 (ANTARA) - As the government is preparing a regulation on rice exports, a legislator and a former minister expressed concern that exporting the staple could drive up domestic prices and endanger national stability.

        The government had predicted Indonesia's rice production this year would reach 33 million tons, well above the domestic need of 31.68 million tons, meaning there would be a surplus of about 1.30 tons and this could be exported.

        But legislator Hilman Indra, vice chairman of the House's Commission IV, which deals with agriculture, said it would be better for the government to use the rice surplus to reinforce national stocks.

        Therefore, he advised the government to revoke its plan to export rice, saying it could endanger national stability. "Rice production surpluses can be made to serve as reserve stocks for use when there is a drought, natural disaster or other unforeseen happenings," Indra said during a working visit in Pontianak, Kalimantan, on Monday.

        The government, through the Ministry of Trade, will soon issue a decree to regulate rice exports. "I am preparing a rice export regulation. I hope it can be issued within the next few days," Trade Minister Mari Elka Pangestu said after a coordinative meeting on economic affairs last week.

        She said the regulation would ban export of rice conducted by any party other than the National Logistics Agency (Bulog). "It is only Bulog that will be authorized to carry out rice exports but before it does so it should first get the green light from the government through the Food Stability Team," she said.

        The discourse on rice export arose amid high rice prices in the world market. The price of rice in the world market is about US$500-US$700 per ton or about Rp5,000-Rp7,000 per kg, while at home the price is stable at Rp4,750-Rp6,000 per kg.

        It was feared that the high prices in the world market would push up the rice price in the domestic market although the government intends to keep it at between Rp4,750 and Rp6,000 per kg.

        "The government is committed to keeping the rice price stable at between Rp4,750 and Rp6,000 per kg so that it will not burden the people," Pangestu said.

        The rice price in the world market is relatively high but as long as the price at home is maintained at a stable level and Indonesia has enough in stock, the country will remain secure, according to Pangestu.

        According to Bungaran Saragih, former agriculture minister in president Abdurrahman Wahid's cabinet, the government had to reconsider its plan to export rice, saying the Central Bureau of Statistics (BPS) data on which the plan was based could be "biased."

        "The BPS data on domestic rice production cannot be used as the basis for allowing rice exports," he said.

        Previously, Director General for Food Crops Sutarto Alimuso said rice production in 2008 was estimated to reach 58.26 million tons of dry unhusked rice or equivalent to about 33 million tons of rice while national need was estimated at 31.68 million tons only.

        Saragih said the high level of the rice price in the market was an indication domestic rice production had not reached a maximum level.

        "I take my cue from the fact that the rice price in the domestic market has yet to come down. This means rice production has not yet reached a maximum level," he said.

        Saragih said the government should be careful about the rice production data in its possession "because those data could well be biased."

        The government should look at conditions on the ground where the rice price in the market was still high although at farmer's level the price had dropped.

        Indra meanwhile noted that while food prices in global markets had risen, Indonesian farmers, ironically, were losing because of a downward trend in the domestic rice price.

        This would be a blow to the farmers. After all, prices of other commodities were estimated to still increase next year as Minister Mari Elka Pangestu acknowledged herself.

        "Food commodity prices in 2008 and 2009 will remain high such as those of maize which will increase by 27 percent, soybean 23 percent and rice nine to 10 percent," the minister said at a public lecture at the Sebelas Maret University (UNS) in Solo on Monday.

        Therefore, Indra suggested that it was better for the government now to concentrate on ensuring the availability of sufficient food and the formation of national food stocks.

        After all, a number of world organizations had warned of the global food shortage problem which had the potential to trigger national and international conflicts.

        While the domestic rice price was still high, meaning that there was still a shortage of the staple, the government should not be misled by the available rice production data.

        "So, I think we are not yet in a position to export rice this year. We should remember we imported quite a lot of rice only last year. It indicates we are not yet producing enough rice," Saragih said. (T.A014/A/HAJM/A/S012) 8:20/.... ) (T.A014/A/A014/A/S012) 16-04-2008 00:21:33