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Jakarta Post

The rice import brouhaha

The greatest lesson from the rice import brouhaha is that the government should prepare a comprehensive, clear explanation whenever announcing such a measure. 

Editorial board (The Jakarta Post)
Jakarta
Wed, March 31, 2021

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The rice import brouhaha Farmers harvest rice with a new machine in Sleman regency, Yogyakarta, on April 1, 2020. (JP/Tarko Sudiarno)

P

resident Joko “Jokowi” Widodo emphasized on Friday that the fruitless debates on the government’s rice import plan should stop as they were pressuring down local rice prices amid the ongoing harvest season.   

“Our memorandum of understanding [MoU] with Thailand and Vietnam is just a precautionary measure in view of the uncertainty [surrounding rice production] caused by the COVID-19 pandemic,” Jokowi said in a recorded TV statement.

He assured the public there would not be any rice imports until June, adding that he had instructed the finance minister to make funds available for the State Logistics Agency (Bulog) to accept any rice sold by farmers at the government-fixed price to replenish national stocks.

There would not have been such highly politically emotional debates had Coordinating Economic Minister Airlangga Hartarto and Trade Minister Muhammad Lutfi in the first place explained the rice import plan in the simple, brief manner the President did. They should have realized that rice, the main staple food of the country’s 270 million people, is a political commodity.

Just mentioning rice imports without a clear explanation can trigger emotional and irrational spats between politicians, ministers and analysts — as what has taken place over the past few weeks. Even Ombudsman official Yeka Hendra Fatika jumped into the fray, alleging that maladministration could have taken place within the decision-making process for the rice import plan.

The MoU with Thailand and Vietnam, virtually the only rice exporters in Asia, makes sense, given the vital role of rice and the global prediction of a likely decline in food production. So, the government had to take a precautionary measure.

The rice import plan is analogous to what the government often did in the past when the financial market was uncertain. The government signed a loan agreement with the World Bank under the condition that it would take the loan only whenever necessary. If the loan was not taken the government paid only a small amount of commitment fee — but that is simply the cost of the precautionary measure. 

The MoU is simply a precautionary deal to ensure the availability of rice imports whenever necessary in the case of emergencies. Thai Commerce Minister Jurin Laksanawisit confirmed that the deal was tied to two conditions: the levels of production in both countries and the global rice price.

Laksanawisit explained that Indonesia and Thailand also had such a deal between 2012 and 2016, but Indonesia imported only 925,000 tons — not the volume agreed — during that period. Over the past five years, however, no such import agreement was signed because the Indonesian government initiated a rice self-sufficiency policy.

Starting negotiations on an import deal when the country already faces a shortage due to an unexpected fall in production could spell disaster for Indonesia, which consumes more than 30 million tons of rice a year.

The greatest lesson from the rice import brouhaha is that the government should prepare a comprehensive, clear explanation whenever announcing such a measure. As long as the public still suspects the official data on rice production and consumption is unreliable, any import plan would cause controversy because licensed food imports have so far notoriously been “infected” with corruption.

 

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