Rice Import Polemic, Need Or Desire?

Illustration (Pixabay)

JAKARTa - The polemic of importing 1 million tons of rice has not subsided. Many parties refuse, even within the government there seems to be a difference in voice over the import plan for the government's rice reserve stock (CBP) at Perum Bulog.

Coordinating Minister for the Economy Airlangga Hartarto said the government would import 1 million-1.5 million tons of rice in the near future. This is done to maintain domestic supply, so that prices remain under control.

"One of the important things is the provision of rice with a stock of 1 million to 1.5 million," said Airlangga some time ago, quoted on Thursday, March 25.

Minister of Trade Muhammad Lutfi then agreed to the plan. According to him, the decision was taken with careful calculations with the availability at Perum Bulog.

Lutfi explained that there were minutes of the meeting at the cabinet level which stated that Bulog must have rice reserves or iron stock of 500 thousand tons. The rice procurement can come from imports.

Meanwhile, he received information that Bulog's current rice stock was only 800 thousand tons. This amount includes the remaining imported rice in 2018, which amounted to 270 thousand tons to 300 thousand tons.

According to Lutfi, imported rice in 2018 is likely to decline in quality. As a result, if the current stock is reduced by the remaining imported rice, the amount could be under 500 thousand tons.

Indonesian Rice Stock

Previously, Director of Perum Bulog Budi Waseso emphasized that he would not fully comply with the government policy, because there was a bet that the price of unhulled rice at the farmer level would drop during the harvest season.

"Even if we get 1 million tonnes of import duty, we won't necessarily carry it out, because we still prioritize domestic products, which are currently in the main harvest period until April," he said in a hearing (RDP) with Commission IV DPR RI, Monday, March 15. .

Meanwhile, the Minister of Agriculture (Mentan) Syahrul Yasin Limpo confirmed that the rice stock until the end of May or the completion of the Idul Fitri moment is still in a safe stage.

Stocks until the end of December reached 7,389,575 tons, while the estimated domestic production at this harvest reached 17,511,596 tons, so that the total stock of rice until the end of May reached 24,901,792 tons.

This amount is more than sufficient because the estimated demand is 12,336,041 tonnes. Syahrul confidently ensured that the rice stock would be a surplus.

The Trade Minister Will Not Import If Rice Stocks Are Abundant

Trade Minister Muhammad Lutfi reiterated the reasons behind the rice import plan.

He said, currently there has been no realization of rice imports because it is still in the harvest period. However, he reminded that currently the real stock of Perum Bulog is only 500 thousand tons, ideally it needs an additional 1 million tons.

"I do not see any difference in statements between the Ministry of Trade, the Ministry of Agriculture, and Bulog. But the standard is that Bulog must have an iron stock. We never say if it is more or less. We only say that Bulog must have an iron stock of 1.5 million tons," he said in a statement. virtual press conference, Friday 19 March.

Currently, Bulog has stock of more than 800 thousand tons in its warehouses throughout Indonesia. Even then, not all of them are in good condition because there are remaining stocks of imported rice from 2018 which have begun to decline in quality, reaching 300 thousand tons. Lutfi claims that the amount is not sufficient because of the potential for price fluctuations.

"My calculations are that Bulog's stock does not reach 500 thousand. This is the lowest stock in Bulog's history," he said.

On the other hand, the Ministry of Agriculture claims there is an additional stock from the main harvest from March to April. Estimated domestic production at this harvest reached 17,511,596 tons.

If this abundant amount can be achieved, then Lutfi will cancel the import plan. He admitted that there have been rice import agreements or Memorandum of Understanding (MoU) with other countries.

"I guarantee that there will be no imports of rice during the main harvest season, and today there is no imported rice that will destroy the farmers. Because there is no import yet," he said.

Rice Imports Due to Declining Quality of Rice

Currently, Bulog's rice stock is mostly filled with rice whose quality has decreased, which is almost 50 percent of the total rice stock. This creates an inevitable big loss. The ombudsman revealed that the value reached trillions of rupiah.

"Whose fault is the rice at Perum Bulog's warehouse? The value is large, there are around 300-400 thousand tons of rice in Bulog's warehouse, which is currently down in quality and has the potential to suffer losses. If half of it is not suitable for consumption, then the potential loss to the state is as much as Rp 1.25 trillion, "said Ombudsman Member Yeka Hendra Fatika in a virtual press conference, Wednesday, March 24.

From 2018-2020, the Ombudsman assessed that the government was able to withstand rice price fluctuations. Although in early 2018 there was a price increase, mid-2018 until now the price is relatively stable. For three years, this commodity has a value of IDR 747 trillion.

However, the value of losses in Bulog's warehouse is still very large. The big loss was due to the rice that had been in Bulog's warehouse for three years not being distributed smoothly. Bulog cannot sell it directly to the community, unlike before where there was a regulation that Bulog was allowed to sell rice through rastra outlets or prosperous rice, which used to be called poor rice or raskin.

"The rice stock in Bulog as of March 14 (2021) was 883,585 tons, of which 859,877 tons were Government Rice Reserve (CBP) stocks and 23.7 thousand tons of which were commercial rice. "The quality has the potential to decrease by 400 thousand tons from domestic procurement during 2018-2019 and foreign procurement through importation in 2018," he explained.

No Imports Needed

On the other hand, member of the Indonesian Ombudsman Yeka Hendra Fatika assessed that rice imports are unnecessary because rice production is predicted to increase this year. Based on data from the Central Statistics Agency (BPS) that he received, rice production in January-April 2021 could reach 14.54 million tons.

This number increased compared to the position of January-April 2019 which was 13.63 million tons and January-April 2020 which was 11.46 million tons. In other words, BPS predicts rice production will increase by around 3 million tons from last year.

Then, the rice stock data received by the Ombudsman at Perum Bulog was recorded at 883,585 tonnes as of March 14, 2021. This number consists of government rice reserves (CBP) of 859,877 tonnes and commercial 23,708 tonnes.

The Ombudsman projects that Perum Bulog's CBP stock at the end of April 2021 will reach 1 million tons. This means that CBP stock has met the minimum limit of 500 thousand tons.

Meanwhile, the price of rice has been observed to have been maintained in the last few days or since the import plan became the talk of many parties.

Quoting the National Strategy for Food Price Information Center (PIHPS), the average price of medium quality I rice per March 24, 2021 was IDR 11,800 per kg. The price has been stagnant since March 18.

Likewise, the price of medium quality II rice was also observed to stagnate at Rp. 11,600 per kg from March 18 to March 24, 2021. Then, the price of super quality I rice from March 18 to March 24, 2021 was stagnant at Rp. 13,100 per kg.

Then, the average price of super quality II rice per day is IDR 12,700 per kg. The numbers have also been stagnant since March 18, 2021.

On the other hand, the average price of low quality rice I edged up from Rp10,750 per kg to Rp10,800 per kg today. The same thing happened to the price of lower quality II rice, which rose from IDR 10,450 per kg to IDR 10,500 per kg.

Many Refuse

Recently, West Java Governor Ridwan Kamil also expressed his rejection of the government's plan to import 1 million tonnes of rice. According to him, the plan would threaten the welfare of West Java farmers because rice production in West Java in March and April will be a surplus and will soon enter the main harvest.

PDIP Secretary General Hasto Kristiyanto also expressed his rejection of rice imports, and criticized the Trade Minister Lutfi. "Forcing rice imports unilaterally is not only against President Jokowi's food politics, but tarnishes the face of President Jokowi, who recently campaigned for the love of domestic production movement," he said, March 24, 2021.

The plan to import 1 million tons of rice was revealed by the Coordinating Minister for Economic Affairs Airlangga Hartanto, which will later be allocated for the provision of 500 thousand tons of Government Rice Reserve (CBP), and the need for Perum Bulog as much as 500 thousand tons by taking into account national rice production absorption.

According to the Governor of Central Java, Ganjar Pranowo, the plan to import rice from neighboring countries is carefully calculated because farmers need attention so that their crops can be bought on the grounds that production costs are not cheap. Ganjar also suggested that the plan be explained in detail in advance so as not to destabilize the situation at harvest time.

However, the Minister of Agriculture Syahrul Yasin Limpo said that his party did not have the authority to reject the rice import plan. In a working meeting with Commission IV of the DPR on March 18, 2021, he said that the plan to import 1 million tons of rice was still a discourse.

Deputy Chairman of Commission IV from the Gerindra Party, Budisatrio Djiwandono, firmly rejects the plan to import rice. The reason is that the import plan is taking place in the middle of preparations for the big harvest of Indonesian farmers.

Budisatrio said that before the import plan was announced, Commission IV of the Indonesian Parliament had held a working meeting with the Ministry of Agriculture and Perum Bulog. During the meeting, the government ensured that the reserve for rice needs was more than sufficient to meet domestic needs. Even the rice stock in Bulog has reached 850 thousand tons

However, in a meeting between the DPR and the Ministry of Trade, it was stated that the rice stock held was insufficient, thus requiring imports of up to 1 million tons.

"So whose data should we rely on? That's why this data must be reviewed," he said.