INDEF Reveals Rice Mafia Practice

TEMPO.CO, Jakarta - Enny Sri Hartati, Director of the Institute for Development of Economics and Finance (INDEF), said that the Indonesian government has never consider increasing rice prices as one of the country’s economic problems.

As a result, Enny stated, rice prices has become one of the main ‘playground’ for mafia practices, causing unhealthy market competition. "Rice mafia has reaped high benefits up to trillions of Rupiah," Enny said on Monday, June 1, 2015.

One of the main causes of mafia practice in the rice sector was the fact that almost 95 percent of the national rice supply is being controlled by private parties while the National Logistics Agency (BULOG) only controls five percent of the total rice supply.

Enny asserted that the manipulation of rice prices occurred on the distribution stage from rice farmers to rice vendors. The illicit practice of manipulation can be seen from the price differences of the rice produced by the farmers, which sol at Rp. 3,200 per kilogram, and the price of rice sold in the market, which reaches up to Rp. 8,500 per kilogram.

Enny said that the mafia practice was possible because the government does not have any legal instruments to control rice prices. Enny added that mafia practice can be eradicated or at least reduced if BULOG can control most of the national rice supply.

ROBBY IRFANY