Observer Reminds Government Of The Impact Of Rice Policy On Poor And Small Milling

JAKARTA - The government is rolling out a policy plan to simplify the classification of national rice by removing the premium and medium rice categories, replacing it with only two types of general rice (regular) and special.

An agricultural observer from the Indonesian Political Economy Association (AEPI), Khudori, conveyed a critical note on this plan which he considered had serious implications for the structure of the eradication industry, business actors, and the welfare of the community, especially vulnerable groups.

"Fight policy is not easy because it involves nearly 285 million consumers. Rice contribution reaches 5.20 percent of the total family expenditure, even reaching 25.87 percent for the poor," he said in a written statement, Thursday, July 31.

"When rice prices rise 10 percent, poverty will rise 1.3 percent. Those who are only a few squares above the poverty line can become new poor. The complexity is also related to rice farmers, totaling tens of millions of families and milling rice, large and small," he continued.

He highlighted that 95 percent of rice mills in Indonesia are small-scale which generally are unable to produce high-quality rice efficiently. If the quality classification is drawn upwards without a fair adjustment and transition mechanism, the small perpetrators can be eliminated from the market, and consumers no longer have a choice of rice at affordable prices.

"Another real condition that deserves to be considered is that small-scale and medium-sized rice milling are investments that are different from different products. Small rice milling is unable to produce good quality rice at low cost, high yield loss, many broken grains, low rendement, and unable to produce rice with high hygiene," said Khudori.

Khudori also emphasized the need for a revision of the policy of buying unhulled rice by the government to be adjusted to quality, and emphasized that the determination of the cost of principal purchases (HPP) and HET of rice must be a package. The imbalance between the two is considered to trigger production stagnation and market deviation.

"The HPP of unhulled rice and the HET of rice is a package. The increase in HPP without being followed by HET adjustments makes the balance between the perpetrators upstream (farm) and downstream (giant and rice producer) no longer occurs. When the HPP of unhulled rice increases without adjustment to the HET of rice, the perpetrators downstream are squeezed by HET. The HPP and HET policies, which do not have a single package, make the milling stop absorbing and producing. Short words, the determination of the HPP of grain and the HET of rice must be done rationally," he suggested.