T

he State Logistics Agency (Bulog) is optimistic that the government will not have to import rice to meet domestic demand in 2015 because of expected abundant production this year.

Bulog acting president director Budi Purwanto said that the decision to import or not was largely dependent upon three factors: good production levels, reasonable prices and sufficient stockpiles.

President Joko '€œJokowi'€ Widodo'€™s administration, which aims for self-sufficiency in key crops over the next three years, has predicted that domestic farms will be able to produce 73.4 million tons of unhusked rice this year, 2.8 percent more than last year.

'€œWith that much rice, our stockpiles will be secure and prices will remain stable, removing the need to import,'€ Budi said during a seminar in South Jakarta on Monday.

If the farmers were able to achieve this target, Budi continued, Bulog would be able to purchase 3.2 million tons of rice for stockpiling.

He ensured listeners that 2 million tons of rice reserves would be sufficient to maintain price competitiveness in the market.

The government has always attempted to keep the price of rice stable. Rice is a key contributor to inflation. Historically, instability in the price of rice has led to political instability.

Bulog currently stocks around 1.7 to 1.8 million tons of rice, '€œjust enough'€ to last seven months. With the future purchase target, Budi said that his agency would be stocking a surplus of 400,000 tons.

'€œBy acquiring 3.2 million tons, we'€™d have enough rice stocks even if the government continued the rice for the poor [Raskin] program for another 12 months,'€ said Budi, adding that the Raskin program would consume 2.8 million tons
on its own.

Budi said that the firm secured around 2.77 million tons of rice this year, or 85 percent of its target.

To compensate for this shortfall, Bulog has imported 425,000 tons of rice from Thailand and Vietnam over the course of the year.

Bulog is supposed to carry out special market operations to control fluctuating prices, distributing the government'€™s rice reserves to the market as need be.

Former deputy trade minister Bayu Krisnamurthi said that rice was unlikely to become scarce next year, with local farmers skilled enough to anticipate bad weather.

'€œIndonesian farmers have become more experienced in anticipating climate change. They'€™ll know when it is the most appropriate time to start planting, whether in January or February,'€ Bayu told reporters.

Bayu pointed out, however, that the government should work hard and in a timely manner to increase the production of rice next year, given that the planting season had shifted. '€œOtherwise there won'€™t be much change in the production levels, ultimately leading to price fluctuations '€” even if rice isn'€™t scarce,'€ he added.

Bayu, who also chairs the Association of Agriculture Experts (Perhepi), urged the government to double the annual production growth of rice to 4 percent if it wanted to achieve self-sufficiency within three years.

He said that output growth had remained stagnant at around 2 percent for the last 20 years.

According to Perhepi, production in 2014 was 70 million tons of unhusked rice, which is equivalent to 39 million tons of rice, whereas national demand currently stands above 40 million tons.