T

he government will put rice and sugar on its priority watch list to prepare for El Ni*o, the weather phenomenon expected to hit Indonesia as early as the end of the year, Trade Minister Mari Elka Pangestu says.

El Ni*o, or "little boy" in Spanish, a recurring climatic event caused by an increase in water temperature in the tropical Pacific, is expected to prolong the dry season and affect crop yields.

The government is taking several measures to secure food supplies such as advancing the planting period and developing drought-resistent paddy seeds, as well as ensuring that dams and irrigation systems across the country are in working order.

Mari said the government would have about 4.5 million tons of rice in stock by the end of this year, enough to meet Indonesia's rice demand for two months. In an emergency situation, she said, the government may import rice from Thailand or Vietnam.

Mari also said the government may permit imports of raw sugar to be processed domestically to ensure a sufficient stock of sugar.

"If we allow imports of raw sugar to be processed until the end of the year, stocks will be safe," she said.

Bayu Krisnamurthi, deputy to the coordinating minister for the economy, in charge of agriculture and maritime affairs, has said the government is considering importing more sugar this year to avoid a shortage in the first five months of 2010.

The government recently announced import quotas of 625,000 tons of raw sugar. Earlier this year, the government already set up quotas of 380,000 tons of refined sugar, including 50,000 tons of realized imports so far, out of 190,000 tons in recommended licenses already issued.

The government also plans to reduce import duties from Rp 790 to Rp 400 a kilogram on refined sugar, and from Rp 550 to Rp 150 a kilogram on raw sugar. The new tariffs are expected to be effective from Oct. 1.

A noted state university economist and a business group chairman have lamented the government's decision to add sugar import quotas and lower sugar import duties, citing the measures were "short-term" and "ineffective".

An economist with Yogyakarta-based Gadjah Mada University, Sri Adiningsih, said lower import duties would only harm sugarcane farmers.

Sri also said the government should aim to be self-reliant in sugar by providing a set of incentives for sugar producers - many of them are still inefficient largely due to outdated machinery - to increase the national sugar production.

The government, through the Industry Ministry, has set aside Rp 50 billion (US$5.15 million) in the 2009 state budget for a sugar machinery revamping program.

Natsir Mansyur, chairman of the Indonesian Sugar and Flour Traders Association (Apegti), said the government's policies were not "well-thought out" and "ineffective" as they would only have three months left to implement them.