Indonesia imports rice despite sufficient supply
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The Indonesian government has said the national rice stockpile is enough to cover the country's needs for the next seven months.
“As of now, our national rice stock stands at 2.1 million tonnes, and this is enough for 7.7 months. This is quite an adequate stock rate,” Coordinating Economic Minister Hatta Rajasa said late last week after a meeting with the State Logistics Agency (Bulog).
Regardless of the adequate stockpile, Agriculture Minister Suswono said the government would still import a maximum volume of 1 million tonnes of rice this year.
Suswono said the import was needed to fill the target of 2 million tonnes held in the Bulog’s rice reserve by the end of the year.
“Bulog’s rice reserve stock is estimated to stand at around 1 million tonnes by the end of this year ... This means the government will need to make up the deficit with imports,” Suswono said.
Suswono said permission to import 1 million tonnes of rice had been issued by the Trade Ministry. However, it was likely that the government would only import 700,000 tonnes to cover rice reserve requirements.
Hatta stressed that Bulog needed to maximise its rice procurement from local farmers before the government moved on import plans.
“The main issue is not whether we have enough stock but rather how to strengthen our reserves. We want a strong reserve to prevent speculation and price fixing,” Hatta said.
The government had predicted that Indonesia’s total rice production might stand at 38 million tonnes this year, while consumption would reach 34 million tonnes. This means that the country would be able to book 4 million tonnes in rice surplus.
Deputy Agriculture Minister Rusman Heriawan said that to achieve food security, Indonesia would need 10 million tonnes of rice surplus annually.
Indonesia was self-sufficient in 2008 and 2009. However, it started to import rice to maintain its reserves in 2010 after a failure to meet harvest expectations.
Shrinking farmland areas and lower productivity have been regarded as the main factors that determine the country’s dependence on imports.
Hatta said that to alleviate a potential food crisis, the government had also allocated 2 trillion rupiah (Bt6.4 billion) to emergency food funds, adding that “1.4 trillion rupiah has been allocated for the agriculture ministry and 600 billion rupiah for food security credit programmes”.
He said the utilisation of emergency funds would be determined by the Finance Ministry with the Coordinating Ministry for the Economy determining the criteria of a food emergency.
Indonesia has signed agreements with Thailand, Vietnam and Cambodia to import rice should the country need it.
Rice imports have been a thorny issue between the government and some lawmakers at the House of Representatives.
The House last Thursday passed a revision to the 1996 Food Law, which was aimed at strengthening food production in the country and moves food import to a last-resort measure.
The law authorises the establishment of a new agency whose main mission would be to ensure food security.
