Bulog told to buy 3.5m tons of rice from farmers

The government wants the State Logistics Agency (Bulog) to buy millions of tons of rice from farmers to secure a steady supply of the staple food and curb further price increases.
Coordinating Minister for the Economy Hatta Rajasa said that Bulog, which maintains the government’s rice reserve, would need to procure at least 3.5 million tons of rice during the February and April harvests to maintain a ready reserve of 1.5 million tons.
“We ask Bulog to be proactive in the market to absorb [farmers’] rice production to meet the people’s demands if necessary,” he told reporters after a meeting at his office in Jakarta.
Bulog was also expected to up its rice stock gradually to 2 million tons in the future “to be safe”, Hatta said, since elsewhere in the world nations were also “maximizing their food stocks”.
“We’re gradually heading in that direction [2 million ton annual rice stock]. I will see that rice procurement is realized this year, so Bulog must continually absorb farmers’ rice,” Hatta said.
Climate anomalies have resulted in crop failures in Indonesia, a domestic consumption-reliant country where rice is considered the main staple food.
Indonesia imported 1.23 million tons of rice in 2010 from Thailand and Vietnam to ensure a sufficient stock and maintain price stability.
Rice imports would stop after the harvest season began in March because, since according to the government’s calculations “there will be rice shortage from January to February, when our stocks are too low” Hatta said.
The government has vowed to go “all out” in securing the supplies of the staple food in the country, including by providing fertilizer and seeds to farmers, as well as by giving Bulog more flexibility in the procurement of unhusked rice from farmers.
“The presidential decree for those [two measures] will be launched soon. I have finished the material in January,” Hatta said.
The government will also provide 1,000 dryers in rice production centers across the country if heavy rainfall damages the quality of the rice production.
The decline in the rice supply has resulted in an increase in prices during the last two months. The price of standard quality rice reached about Rp 7,400 a kilogram in January, up from about Rp 6,400 in the same month last year.
Overall food prices surged 18.25 percent in January, bringing inflation to a 21-month high of 7.02 percent last month.
Rice and chili contributed the most to the increase, accounting for 0.22 percent of the overall headline inflation rate.
However, Central Statistics Agency (BPS) chair Rusman Heriawan said there was a slide in rice and chili prices in the first two weeks of February due to the upcoming harvest season, while an upward trend was seen in soybean prices.
“Soybean price hike will affect tofu and tempeh prices,” Rusman said after the meeting, adding that, overall, inflation would ease this month as expectations of heavy production would rise due to the upcoming harvest.
Deputy Agriculture Minister Bayu Krisnamurthi said the price hike was due to soaring international soybean prices, and, according to him, soybean production would likely not meet targets in 2011.

(Source: http://www.thejakartapost.com/news/2011/02/10/bulog-told-buy-35m-tons-rice-farmers.html)