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Limited Effect

Translator

Editor

2 March 2015 04:52 WIB

TEMPO.CO, Jakarta - The market operation to lower the price of rice that recently increased is bound to have only limited effect.

Even if the insignificant result is considered to be enough, complacency among high-ranking officials in the economic affairs actually will only last for a while.

They should have realized that the same thing could be repeated because in terms of the system, nothing has changed.

Just like the previous cases, this time, price hike – which is the highest ever - happens when the national stock is actually safe.

At least that’s what the government claims; rice sticks that are kept in the warehouses of the State Logistics Agency (Bulog) reaches 1.4 tons of rice.

This is sufficient to meet the demand until the next harvest season in April.

The percentage of the increase varies in various places.

Nevertheless, the alleged causes of the increase are the same: several traders, mafia and speculators hoard the rice and the disorganized distribution.

It is those two factors that have long been regarded as the major causes.

If the uncontrollable increase of rice price often happens before the harvest season, we can certainly say that the government’s ability to tackle the source of the problems are absolutely in question, and if it true that there have been efforts to make improvement.

The increase in the price of rice might happen because of the surge in demand.

In other words, there is an increasing consumption.

The causes may vary, ranging from the increase in the income among the poor n following the distribution of the Healthy Indonesia Card, the Smart Indonesia Card, as well as the Prosperous Indonesia Card, all of which are the programs implemented by President Joko Widodo.

It can also because proportion of rice consumption in the households remains high.

The problem is, with the domestic rice production level in the past one year that can be considered normal, no matter how big the consumption is, the demand will be difficult to meet if the distribution remains in disarray.

This is what should become the focus of the government.

Serious efforts to improve the distribution system must be prioritized. Efforts to make improvement should also be done in earnest.

In the distribution process, there are at least two things that are the sources of problems, that is the gap of production among regions and the long a link from the producers to the consumers.

Regions who are producers of rice or whose harvest production is low are likely to see price of rice that are higher compared to regions with surplus of rice.

Same level of price is also unavoidable if wholesalers play bigger roles as the connector between famers and the market.

It is the government that should have been responsible to rectify the situation by closing the production gap as well as by shortening the link between producers and consumers.

This is the task that must be carried out by Bulog, an agency in charge of managing and controlling supply, distribution and price of rice.

As the priority, what Bulog can immediately do is to formulate a concrete plan to break the link.

In order to end the cycle of the increase of rice price, the execution of those plans obviously must be done carefully.

(*)




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