Is the Government’s Plan to Import 2 Million Tons of Rice This Year Wrong?

Jakarta, CNN Indonesia —

The National Food Agency (Bapanas) has assigned Perum Bulog to import 2 million tonnes of rice this year.

This directive was the result of an internal meeting with President Joko Widodo (Jokowi) on Friday (24/3) which was contained in a copy of the letter.

Quoting CNBC Indonesia, in the letter, it was explained that Perum Bulog was ordered to import 2 million tons of rice this year of which 500 thousand tons had to be imported as soon as possible.



“We have assigned Perum Bulog to procure 2 million tonnes of government rice reserves (CBP) from abroad by the end of December 2023. The procurement of the first 500,000 tonnes should be carried out as soon as possible,” wrote a copy of the letter signed by the Head of Babas Arief Prasetyo Adi.

A copy of the letter also stated that the additional supply of rice could be used for the Rice Food Price and Supply Stabilization (SPHP) program, rice assistance to around 21.353 million beneficiary families (KPM) and other needs.

“The procurement of rice from abroad is in order to maintain the interests of domestic producers and pay attention to the aspects of accountability and good governance in accordance with statutory provisions,” continued the copy of the letter.

Bapanas reminded Bulog to maintain the interests of domestic rice, especially during the March-May 2023 Harvest period.

Separately, Head of the Logistics Agency (Bulog) Budi Waseso confirmed the import duty of 2 million tonnes of rice. However, he is still waiting for permission from the Ministry of Trade (Kemendag).

“We don’t know when the (imported rice) will enter because the permit has not been issued by the Ministry of Trade,” said Budi at the DPR Building, Monday (27/3).

Responding to the plan to import 2 million tons of rice, Indonesian Political Economy Association (AEPI) Agricultural Observer Khudori considered the government’s decision to be bitter. This is because the import permit was actually issued during the main harvest.

According to him, import permits issued during the main harvest are very rare. This is because during the main harvest the supply of grain/rice is usually abundant and prices fall.

In addition, the decision is also a dilemma. On the one hand, currently farmers enjoy high grain prices. Usually, during the main harvest prices are depressed. Of course this benefits farmers.

On the other hand, because of the high price, Bulog has difficulty absorbing it. Until March 24, Bulog had absorbed only 48,513 tons of rice. So small.

Khudori also said that this year Bulog is targeted by Badanas to absorb 2.4 million tons of rice from domestic farmers, of which 1.2 million will be stock at the end of the year. Of that target, 70 percent of it is expected to be absorbed during the main harvest until May.

According to him, considering the conditions on the ground, the target will almost certainly be difficult to fulfill. Including the target to absorb 70 percent of the 2.4 million tons of rice during the main harvest.

“Meanwhile, the best opportunity for Bulog procurement is during the main harvest. If absorption during the main harvest is missed or not achieved, the target will almost certainly not be achieved,” he said.

Last week, only 280 thousand tonnes of CBP were in Bulog’s warehouses. Khudori rate this amount is very small. Meanwhile, from March to May, Bulog will have to distribute rice social assistance (bansos) to 21.35 million underprivileged families.

Furthermore, referring to data from the Central Statistics Agency (BPS), in February 2023 rice production was still limited. Production in that month, if reduced by consumption needs of around 2.53 million tons of rice, there was a surplus of 0.32 million tons.

Then, in March it is projected that there will be a surplus of 2.84 million tons, and in April there will be a surplus of 1.26 million tons of rice. Even so, the surplus in February was still small.

“If there is a question, aren’t we having a surplus in rice production, why are we importing? True, referring to BPS data, since 2018 Indonesia has had a rice surplus. But the volume of the surplus continues to fall, from 4.7 million tonnes in 2018, only 1.34 million tonnes remain in 2022,” Khudori added.

When the number of surpluses is getting smaller, he said, the management of reserves and distribution becomes a crucial issue. When miscalculated, the impact can be very fatal.

According to Khudori, in the future there needs to be serious efforts to boost production and productivity. Production from 2018 to 2022 continues to decline.

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