BULOG EXPECTED TO HANDLE MORE COMMODITIES

By Andi Abdussalam

Jakarta, Aug 2 (ANTARA) - In view of the recent surge in soybean prices, the Indonesian government is considering expanding the role of state-owned logistics agency Bulog to managing prices of commodities other than rice.          Only last week, President Susilo Bambang Yudhoyono had called for the revitalization of Bulog as a stabilizer of prices of not only rice, but of other food commodities.          The revitalization was needed due to stability challenges posed by continuously increasing prices of various food commodities and the greater demand for food from the public, the President said in a cabinet meeting on Thursday.          He added that he had received support for demanding the revitalization of Bulog as a price stabilizer in line with the history of its establishment.          The Bureau of Logistics or Bulog deals with food distribution and price control, and was earlier in charge of stabilizing prices of various other foods, but now only monitors prices of rice, after its role was streamlined in accordance with an International Monetary Fund (IMF) recommendation.          Rice is considered a staple food for Indonesia's 237.6 million strong population.          Currently, Bulog is responsible for supervising the price of government-sanctioned un-husked rice, stabilizing its price, distributing inexpensive rice to the poor and managing the nation's rice stocks. It has 26 regional divisions, 30 regional offices and 463 warehouses throughout Indonesia, along with a staff of 5,025.          The Indonesian Chamber of Commerce and Industry (Kadin) for Jakarta had also requested the government to expand the role of Bulog to include stabilizing the prices of other basic necessities. Kadin Chairman Eddy Kuntadi said on Tuesday that Bulog should regain its role as a buffer agency for basic goods so that it can control basic commodity prices.          The absence of Bulog's role in stabilizing prices allowed speculators to hoard stocks and forced the government to import certain commodities.           Kuntadi said that the sky-rocketing prices of soybean should not be looked upon as an indicator of the government's failure to meet the people's need for food. If Bulog had played its role as a buffer agency in real terms, the prices of food commodities would have stabilized, he added.           Ma'mur Hasanuddin, a member of the House of Representatives (DPR)' Commission IV on agricultural affairs, said the government's plan to revitalize Bulog must be supported by providing adequate infrastructure, human resources and imposing regulations.           "The government's plan to revitalize Bulog must be supported with superior organizational management, infrastructure and qualified human resources," Hasanuddin said.           In order to increase its role and functions, Bulog needs new infrastructure, including warehouses for managing stock and a mature trade strategy to face the dynamism of the market, he added.           Bustanul Arifin, an agricultural analyst with the Institute for Development of Economics and Finance (Indef), also agreed with the government's plan.           He said the government's proposal to renew Bulog's role would complement its efforts in maintaining the nation's food resilience, adding that Bulog's role, however, should not follow its past direction.           Seeing the often uncontrollable fluctuations of prices, particularly those of strategic commodities, the country needs a body which can maintain reasonable and stable prices.           Bulog still remains the most suitable agency that can serve as a storage facility for various strategic commodities in the country, Khudori, an observer said on Wednesday.          "Compared with other state-owned firms (BUMN) and private companies, Bulog has better infrastructure and facilities, such as relatively large warehouses," Khudori added.          He further cautioned that even though Bulog is the most suitable body for serving as an agency to handle the country's food commodity price stabilization program, the government must be careful before deciding which commodity types would be stored and have their prices determined by Bulog.          Khudori also said that allowing four or five strategic food commodities to be included in the agency's price stability program should be enough for the government.          By providing data on the number of farmers who cultivated various types of commodities, the Central Board of Statistics (BPS) could assist the government in deciding which commodities to select, he added.          In addition to deciding the types of commodities, the government also needs to prepare other stabilizing instruments, such as deciding the ceiling and floor prices of various commodities.          This includes soybean, whose recent high prices have led to a scarcity of tempeh (fermented soybean cake) and tofu side dishes in eateries.          The government is expected to activate Bulog's role in the soybean trade, Agung Laksono, the Coordinating Minister for People's Welfare said while on his Ramadhan safari in Cirebon, West Java.          Indonesia's current annual soybean output of 800 thousand tons falls short of its current annual requirement of 2.5 million tons, so it mostly imports the shortfall to meet its soybean needs from the United States. ***2*** (T.A014/INE/H-YH)02-08-2012 19