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RI to import 1.5 million tons rice from Thailand, Vietnam
The devastating impact of El Niño has forced the government to import rice from neighboring countries as prolonged drought has caused harvest failures in several rice producing regions, Vice President Jusuf Kalla says
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The devastating impact of El Niño has forced the government to import rice from neighboring countries as prolonged drought has caused harvest failures in several rice producing regions, Vice President Jusuf Kalla says.
Kalla said on Tuesday that the State Logistics Agency (Bulog) was currently in the process of purchasing around 1.5 million tons of rice from Thailand and Vietnam following concern on rising prices of the staple food that could cause social unrest.
'I would like to emphasize that we are forced to import because of the drought. We're taking rice issues very seriously. We could delay imports of chilies or shallots, but when it comes to rice, we're not playing around,' he said.
Indonesia is the world's third-biggest consumer of rice after China and India, with rice production expected to be below the 45 million tons targeted for this year.
President Joko 'Jokowi' Widodo initially targeted the country to be self-sufficient in rice within the third year of his tenure, while Kalla was optimistic the target was achievable within two years if drought was not factored in.
Agriculture Minister Amran Sulaiman has taken the target to the extreme as he believed no imports were needed for this year despite the drought and has sternly opposed any attempts to import.
'Amran has retracted his statement and has agreed to the imports. His main responsibility is to produce as much as rice as possible. When it comes to ensuring supply and price stabilization, Bulog has the sole authority,' said Kalla in response to questions over Amran's disagreement over imports.
Bulog recently said it had been buying rice and unhusked rice at premium prices from local farmers.
Kalla said he would not repeat the mistake made by former president Soeharto in late 1997 when he failed to promptly respond to shortages in rice supply amid the worst drought recorded in decades due to El Niño.
Skyrocketing prices of rice were partly blamed for triggering social unrest that led to Soeharto's resignation in May, 1998.
'The government at that time always assured the public that everything was OK until they were struck by the food shortage. Although they were late to import, some 7 million tons were brought in in 1997 and another 5 million tons in 1999 in response to the problem,' he said.
Low-income people will be the hardest hit by soaring rice prices as food accounts for around 60 percent of their living costs, while mid- and high-income consumers only spend 20 percent of their living costs on food, according to Kalla.
Many areas in West Java and East Java reported last week rising rice prices by as much as 10 percent due to supply shortages.
'But when we've decided to import, the prices have suddenly declined now,' said Kalla.
Local think thank the Institute for Development of Economics and Finance (Indef) has found that several welfare indicators, including food prices, wages and the unemployment rate, all point to a general suffering resulting from the country's sluggish economy, which recently shrank to its slowest level in six years.
Volatile food prices in the country's official consumer price index (CPI) surged 8.97 percent in July, compared with an overall inflation rate of 7.26 percent. While it may reflect rising prices for Idul Fitri festivities, food inflation has so far this year been much higher than overall inflation.
Volatile food prices went up by 2.47 percent this year as of July, while the headline inflation rate was still at 1.9 percent, data from the Central Statistics Agency (BPS) has revealed.
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