GOVT ADVISED TO CONDUCT RICE EXPORTS BY ITSELF

By Andi Abdussalam

Jakarta, April 3 (ANTARA) - Many quarters have expressed concern about the government's policy of allowing private businesses to export rice, saying it would be difficult for the government to control the trade or call the exporters to account if a food scarcity happens.

        "Private firms should not be involved in rice exports because they will surely deny any responsibility if a food scarcity occurs," public policy observer Ichsanuddin Noorsy said.

        Earlier, Bayu Krisnamurthi, deputy to the chief economic minister for agriculture and maritime affairs, said that the government had given the opportunity to private businesses to export rice.

        "So, limited rice exports are no longer the monopoly of the National Logistics Agency (Bulog). This is a new policy decided after a coordination meeting among the relevant parties," Krisnamurthi said.

        He said that by allowing private companies to export rice it would create a competition with Bulog to meet the maximum export limit which the government had set at 100,000 tons.

        Noorsy said private businesses are inclined to seek the greatest possible profits. "So, they will use every chance that comes their way to reap as much profit as possible," he said.

        Therefore, the government's intervention in rice exports is badly needed while at the same time the government could also protect trading in the commodity.

        The trade ministry plans to issue a permit for the export of 266,000 tons of best quality rice in the April-September 2009 period. The export of 100,000 tons of rice will be entrusted to Bulog, while the rest will be handled by private businesses.

        According to Bulog President Director Mustafa Abubakar, Bulog has invited private companies to conduct joint exports to raise bargaining power in the international market.

        "What Bulog is doing now is cooperating with private companies because the private companies do not have the courage to conduct rice exports by themselves. They think their companies are small while the amount of rice to be exported is also small. Therefore it would be better if they conduct exports jointly," he said.

        Bulog has had meetings five times with 10 companies that were ready to conduct rice exports. "They are ready to be verified in the field by a technical team from a surveyor company and the ministries of agriculture and trade," he said.

        Agriculture Minister Anton Apriyantono also suggested that the exports should be carried out by the private sector in order to increase the profit margin for the farmers.

        However some quarters expressed fear that it would be difficult for the government to carry out control if rice exports are carried out by private businesses.

        The Indonesian Farmers' Association (HKTI), economic observers and Association of Logistics Businesses (Aplindo) all say that rice is a strategic commodity that should not be left to the market mechanism and free market.

        "Rice exports must be carried out through one gate or by a single exporter so that it would be easy to control," HKTI advisory board chairman Siswono Yudhohusodo said.

        Professor of economics, agricultural industry and social sciences of the University of Gajah Mada, Mohammad Maksum even questioned whether the government had deeply thought of the advantage and disadvantage of involving the private sector in the rice exports.

        "Has the government already prepared a monitoring and control mechanism to arrange the volume of exports by private companies?" he questioned.

        He said that it would be difficult for the government to differentiate whether the rice bought by the private companies from farmers were for exports or for piling stocks. It should not happen that the private companies bought unhulled rice from farmers with a high price but later rice stocks in the country all of a sudden ran short.

        "If rice stocks fall short leading to a food crisis and sky-rocketing of prices, who will be responsible?," Mohammad Maksum asked.

        If the rice price sky-rocket, it would be possible for the private company to release their rice stocks in order to reap as big profit as possible.

        Secretary General of Aplindo Nellys Soekidi concurred the idea saying that the government should not involve private companies in the country's rice exports.

        "Besides it is ineffective to involve private companies, it would also pose a food crisis threat to the people. So, rice export should be carried out by Bulog, an agency owned by the government," she said.

        Nellys Soekidi reminded the government that it should not trivialize matters relating to food, particularly rice, let alone allowing the private sector to export rice itself.

        "No one can guarantee that there is one party which would be responsible for deciding whether rice production is enough for export or not,"Nellys said adding that rice export should be carried out through one gate, namely Bulog. ***2*** (T.A014/A/HAJM/A/E002) (T.A014/A/A014/A/E002) 03-04-2009 20:57:31