Expected Rp 7b allocation to stabilize falling ricr prices

Nana Rukmana ,  The Jakarta Post ,  Cirebon   |  Wed, 04/02/2008 1:56 AM  |  The Archipelago

The Cirebon regency and West Java provincial administrations are slated to allocate Rp 7 billion (approximately US$777,000) to stabilize the price of un-husked rice, which has fallen during the current harvest due to farmer debt and attacks by pests.

Based on observations Tuesday, a major rice harvest has begun in areas including Mundu, Kedawung, Sumber, Talun and Susukan districts in Cirebon regency.

The price of dry un-hulled paddy dropped to between Rp 1,800 and 1,850, significantly lower than the government purchase price of Rp 2,000 per kilogram.

Cirebon Agriculture, Cultivation and Husbandry Office head Ali Effendi said the drop in prices was attributed to lower quality rice due to a recent pest scourge.

"The quality of paddy affected by pests is lower, thus impacting prices. The total areas affected by pests has reached 1,500 hectares," said Ali.

Ali also said the price drop was due to debts incurred by farmers to middlemen.

"As farmers wish to repay their debts to the middlemen, they are unable to retain the price of their rice stocks."

A farmer in Sumber district, Rusmin, 40, said he was forced to sell his rice stock at Rp 1,800 per kilo.

"I sold my paddy stock because I wanted to repay my debts quickly," said Rusmin.

Farmers usually borrow money from middlemen to till their land.

"We borrow money from middlemen to buy fertilizer and food supplies. Many of us have to sell our stock at low prices due to the debts," said a farmer in Mundu district, Pendi, 38.

Ali said the government would disburse Rp 7 billion to stabilize the rice price. The money will include Rp 2 billion from Cirebon's regency budget and Rp 5 billion from the provincial budget.

"The funds will be used to prop up the price of un-hulled rice so as to measure up with the government purchase price."

He said he was confident prices would stabilize before the next major harvest in mid-June.

Total rice plantation areas in Cirebon regency this year reached 42,000 hectares.

"Currently, 20,000 hectares of the rice paddies have been harvested," said Ali.

Despite pest attacks in a number of areas, Ali said he was positive rice production capacity in Cirebon regency would not be compromised.

The regency is confident the targeted 2,450,000 tons of rice will be reached in this year's planting season.

Cirebon regency is one of West Java's major rice producing centers, after Indramayu, Karawang, Subang and Majalengka.

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