A Solution for Bulog

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 (5/1/20918). 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.

A comprehensive solution is needed to address the State Logistic Agency’s (Bulog) complaint that it is unable to absorb any more rice from farmers due to difficulties in distributing to rice reserves.

As of May 17, 2021, Bulog had secured 1.37 million tons of rice for the government’s national stock. Nearly one-third of the amount, 413,856 tons, were classified as lower quality because they came from imports in 2018 and domestic procurement in 2018 and 2019.

On the other hand, Bulog can only distribute 600,000 tons of the rice reserve per year for food availability, price stabilization and food aid during natural disasters. With these opportunities for distribution, Perum Bulog director Budi Waseso, in a joint meeting with the House of Representatives Commission IV, Tuesday (18/5/2021), expressed his concern that they would not be able to absorb more rice from farmers. (Kompas, 19/5/2021).

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Not only is rice a staple ingredient, but it is also the most important and most dominant one. Rice is also a political commodity that can affect the sustainability of governance.

For Indonesia and these Asian countries, rice is a staple food and a source of livelihood for the large numbers of farmers there are.

In Asia, the governments of China, Japan, Vietnam, the Philippines, Thailand, India, Laos and Myanmar all strictly maintain the production, distribution and trade of rice, as well as the welfare of rice producers and the availability for population consumption (Rice Policy in Asia, 2003). For Indonesia and these Asian countries, rice is a staple food and a source of livelihood for the large numbers of farmers there are.

KOMPAS/TOTOK WIJAYANTO

Perum Bulog Director Budi Waseso.

An important factor in managing food is price stability for producers and consumers, affordability and availability. Bulog was formed on May 10, 1967 with the aim of safeguarding these three things when Indonesian underwent a food shortage.

During the era of the New Order, Bulog’s largest channel of rice was for civil servants and members of the Indonesian Military (TNI) and the National Police. In the early 2000s, rice was replaced with cash. Bulog rice was then distributed to the underprivileged by 2.6 million tons per year and was halted in 2019 due to a lack of quality and missed distribution targets.

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With a population of more than 270 million people in an archipelago, and the majority of whom consume rice, we all agree that rice buffering is still needed. Especially now that the pandemic has disrupted the food supply chain.

As a public company, Bulog is not expected to seek out maximum profit, but it also must not lose. Principles of good corporate governance must still be implemented.

The simplest way to help Bulog is to channel excess rice back to state servants and members of the TNI and police, as well as the underprivileged.

Kompas/Iqbal Basyari

A rice seller in Genteng Market, Surabaya, East Java, selling Perum Bulog market operation rice priced at Rp 9,000 per kilogram, down compared to yesterday’s price of Rp 9,350 per kilogram, Wednesday (10/1/2018). The price has been cut because sellers are concerned that the rice from Bulog may not sell well.

However, Bulog needs to undergo modernization, for example, by setting up more silos to maintain rice quality for a longer time period and placing them directly in production centers to increase efficiency. The quality of rice reserves needs to adapt to the changes in population demographics. Bulog needs to find new ways to distribute rice according to the needs of the community. Innovations must not stop so that Bulog can properly fulfil its role as a buffer for national food reserves.

(This article was translated by Kesya Adhalia).