Is It Wrong that We Import Rice to Boost Food Reserves?
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26 August 2023 14:31 WIB
When the production situation is like the current one, I, for instance, would ask Bulog to absorb supplies domestically. Have the local prices increased? Definitely yes. So, is it wrong that we imported two million tons to boost Bulog’s stock?
Some view import as an indication that the ministry’s performance is poor…
Not like that. We achieve self-sufficiency when 90 percent of supplies come from local production. So, it’s okay to import 3 million (tons) when our need is 30 million (tons) a year.
Like fuel oil imports?
Why isn’t there much ado over fuel oil imports? There’s no outcry over massive soybean imports either. What is our soy production actually? And garlic? Why isn’t there any fuss?
Previously, there was a narrative that said we had a rice surplus, right?
That’s why we are now disclosing the true situation. Look at China with a population of 1.45 billion. They need 155 million tons while they produce 148 million tons. They import 5.6 million tons and export 2.25 million tons. The percentage of imports versus requirements is 3.5 percent. Does it work? It does because import is still below 10 percent.
Many say that the rice import policy does not favor farmers. Is it true?
Which farmers are complaining? Look at the Farmer Exchange Rate (FER) of 104. It was previously below 100. It means farmers are having a windfall. Don’t ruin it again. How to ruin it? The egg price is higher than last year. So, it should be Rp22,000 (about US$1.4) per kilogram. It will ruin farmers and poultry farmers’ FER because all variable costs have gone up.
The rice stock in the government’s hands does not influence price fluctuations in the market.
Because it’s not used for intervention.
When did the government intervene?
Look at the volatile food data. How come no one said why there was deflation yesterday (May, June, July)? Deflation didn’t fall from the sky. The government intervened in those three months through food aid programs.
Now it hasn’t intervened because the rice prices are still considered reasonable.
No. We are preparing ways in case we intervene. Government food reserves will have to be increased first. If we distribute everything, Bulog will be left with no reserve. Will it have an impact? It will. Otherwise, how will we intervene (in the future)? If huge reserves are not used, will the prices go up? They still will. That’s why it’s really dangerous if we don’t have stocks as harvests decline yet there’s no intervention.
There’s no need for intervention yet with a current average rice price of Rp13,000 (US$0.85) per kilogram?
Later. The plan is to provide food aid in October, November and December. I tasked Bulog with the job last July to distribute government food reserves through the rice aid program.
Why the need to wait till October?
We must maintain Bulog’s stock. How much do we need if starting in August, September, October? 640,000 tons. It means Bulog will only have 500,000 tons left. Do you dare? So, just stock up first. And intervene when the stock has been sufficiently increased. Don’t intervene first otherwise ‘the gas’ will run out. A lot of people made an oration, “See, the government is not good at managing food stocks.” Looking at who? The head of the National Food Agency although the problem lies in production.
What do you mean?
It could be because of El Niño or the plants not getting enough fertilizers. We should speak without blaming the ministry or other agencies. There are issues such as climate change, El Niño, rising prices of goods, shifts in consumer preferences. I mean, let’s not discredit others. We should prepare to move forward.
So, there are no issues with the 10 necessities that the Food Agency is responsible for?
That is why food reserves are important. Have you ever seen the food aid to Papua? People here shouldn’t say, “Papua people are neglected.”
Food diversity in Papua has been disrupted because a lot of land has been turned into oil palm plantations…
Ask the producers. Don’t throw this question at me.
Besides import, what else can be done to mitigate the impact of El Niño?
The food reserves, again. To have food security, state-owned enterprises (SOEs) must have food reserves. Because ‘S’ in SOE means the state. What SOEs Minister Erick Thohir said was true that SOEs must be profitable but remember ‘S’ in SOEs. They may profit but may not go overboard. I am still trying until today for SOEs to get loans with low interest rates.
Read the Full Interview in Tempo English Magazine
