Bulog Needs Distribution Guarantee

Kompas/Raditya Helabumi

Workers moving rice from a carrier truck at the Bulog warehouse for the regions of Jakarta and Banten in North Jakarta, Friday (5/1). The hampered distribution from a number of rice centers contribute to the high price of rice in the market of late. Throughout 2017, bulog rice absorption realization reached 2.16 million tons or 58 percent from the target of 3.74 tons.

The State Logistics Agency’s (Bulog) efforts to absorb farmers\' crops considerably will not be optimal without guaranteed distribution. Its price-stabilizing function weakens along with declining absorption and distribution.

JAKARTA, KOMPAS — Rice absorption by Bulog is not yet fully reliable to save the farmgate price of unhulled rice during the first harvest in 2021. Uncertainty in distribution has blocked Bulog\'s steps to optimize its ability to absorb farmers\' rice or unhulled rice.

President Director of Bulog, Budi Waseso, believes there is potential for a rice surplus this year. The production potential is deemed sufficient to meet the government\'s rice reserve (CBP) needs. "If we are asked to absorb 2 million tons, we are capable of doing so because we have the capacity. The problem is, once absorbed, what will the rice be used for? Moreover, the programs [of rice distribution] in the downstream are decreasing," he said at an online discussion held by Volunteers of Struggle for Democracy on Thursday (25/3/2021).

Thus, the maximum absorption for the company is around 800,000 tons.

According to him, the average distribution of government rice stock by Bulog is currently around 50,000 tons per month. The supply availability and price stabilization (KPSH) program is the largest (distribution) channel. Within a year, the free distribution for KPSH can reach 600,000 tons. Thus, the maximum absorption for the company is around 800,000 tons.

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The production potential that becomes a reference for Bulog, said Budi, is data from the Central Statistics Agency (BPS) and the Ministry of Agriculture. BPS projects rice production from January to April 2021 to reach 14.54 million tons of rice (equivalent to rice), or higher than the same period in 2019 and 2020, which respectively reached 13.63 million tons and 11.46 million tons.

Meanwhile, the national rice demand for consumption during January-April 2021 is estimated at 9.72 million tons. Thus, in the same period there was a rice surplus of 4.81 million tons. As of Thursday (25/3) morning, the realization of rice procurement by Bulog from domestic production reached 158,000 tons, about 10.8 percent of the absorption target of 1.45 million tons in 2021. Meanwhile, the rice stock managed by Bulog reached 943,000 tons.

KOMPAS/RADITYA HELABUMI

President director of state logistic company Bulog Budi Waseso (center) explains a number of work plans to journalists in Jakarta on Monday, May. 14, 2018. Bulog will strengthen its rice and unhusked rice procurement network through partnerships with a number of farmer groups and institutions, including the the Indonesian Military (TNI) and the National Police.

Meanwhile, the Office of the Coordinating Economic Affairs Minister refused to provide an explanation regarding the results of the limited coordination meeting (Rakortas) and public pressure to postpone imports. When contacted, deputy for Food and Agrobusiness Coordination at the Office of the Coordinating Economic Affairs Minister, Musdhalifah Machmud, told Kompas to bring the questions to the Ministry of Trade. "The policy is there [Ministry of Trade]," he said. Meanwhile, the secretary of the Office of the Coordinating Economy Affairs Minister, Susiwijono Mugiharso, did not respond to telephone calls and short messages from Kompas.

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Director General of Foreign Trade at the Trade Ministry, Didi Sumedi, also did not respond to Kompas\' phone calls and text messages.

Prices plummeted

Amid discussion over the government\'s plan to import 1 million tons of rice this year, the farmgate price of unhulled rice has plummeted. The number of areas that reported cases of plummeting price of unhulled rice to below the government purchase price (HPP) has increased along with the growing number of areas being harvested.

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Director General of Food Crops at the Ministry of Agriculture, Suwandi, said that as of Wednesday (24/3), there were 459 districts in 85 regencies that reported prices below the HPP set at Rp 4,200 per kilogram for dry unhulled rice (GKP). The most cases of unhulled rice prices that slumped below HPP were in South Sumatra, Lampung, Banten, West Java, Yogyakarta, Central Java, East Java and West Nusa Tenggara.

KOMPAS/IQBAL BASYARI

Dozens of East Javanese people demonstrate in front of the East Java Governor\'s Office in Surabaya on Tuesday, Jan. 23, 2018. They expressed their opposition to the rice import policy when the harvest period was approaching as they considered it to be detrimental to farmers.

According to the Andalan Farmer Fishermen Group (KTNA) of East Java, the price of unhulled rice is Rp 3,400 to Rp 3,500 per kg of GKP. Meanwhile in Lampung, the farmgate price of GKP ranges from Rp 3,700 to Rp 4,200 per kg. In Cirebon, according to Kompas\' observation last week, the price of unhulled rice is around Rp 3,300 to Rp 3,700 per kg of GKP.

"Without large-scale efforts to absorb grain from farmers, in the next few days, the price of unhulled rice will definitely get shattered. Until now, the large-scale absorption efforts have not been seen," said chairman of the East Java KTNA, Suyanto, on Thursday (25/3).

East Java Governor Khofifah Indar Parawansa said there have been efforts to overcome the plummeting price of unhulled rice, among others, by asking Bulog to increase absorption. "If currently the average absorption rate of Bulog’s East Java Office is 1,500 tons per day, the hope is that it can be 2,000 tons per day," she said.

This policy has been implemented previously by involving the Association of State-Owned Banks (Himbara) to absorb grain from farmers.

The East Java Provincial Administration has also proposed to President Joko Widodo that the State-Owned Enterprises Ministry help optimize the absorption of farmer’s rice. This policy has been implemented previously by involving the Association of State-Owned Banks (Himbara) to absorb grain from farmers.

This policy is taken within the framework of stabilizing the price of unhulled rice in the market so that nothing will fall down to below the HPP.

Head of East Java Bulog, Khozin, said that a task force has been deployed to the (rice producing) areas to absorb as much grain as possible from the farmers. "East Java [Bulog Office] has a warehouse with a capacity of 1.2 million tons which is still empty because the current rice stock is only 230,000 tons," he said.

Delay imports

Regarding the plan to import 1 million tons of rice, the House of Representatives (DPR) has asked the government to postpone it because it (import plan) is deemed not having a solid basis. Deputy Chairperson of House Commission VI from the PDI-P faction, Aria Bima, asked the government to prioritize the absorption of farmers\' unhulled rice.

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A number of indicators show that rice production and availability are still adequate. The decision-making process regarding imports through the coordination meeting led by the Office of the Coordinating Economic Affairs Minister is also unclear. This is because so far there has been no compatible narrative between the Minister of Agriculture, Minister of Trade, and Bulog regarding the results of the coordination meeting.

KOMPAS/RONY ARIYANTO NUGROHO

Sigit, 16, prepares garlic for sale at Jembatan Lima Market in Jakarta on Friday (14/9/2018). Although the rupiah’s exchange rate was affected by a stronger dollar, the price of imported garlic at the market remained stable at Rp 22,000 per kilogram.

Member of House Commission IV from the PDI-P faction, Ono Surono, alsolog highlighted import decisions based on the global situation facing the threat of the food crisis. This is because the crisis in question did not occur domestically.

In Banyuwangi, Chairman of House Commission IV, Sudin, said that Commission IV has agreed to reject imports to be carried out in March-May 2021. The consideration is that the majority of farmers are entering the harvest season. (JUD/AGE/NIK/IKI/GER/MEL)

(This article was translated by Kurniawan H. Siswoko)