Rice imports – A disaster for farmers

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(illustration: IO/Rudraksha)

Jakarta, IO – We are only a few days into 2018, but the government has already delivered bad news to the public: it intends to import up to 500 thousand tons of rice. We are well aware of the fact that rice is the staple food of most people in the Republic; any issue or emergency involving the availability of rice will deeply affect the life of the nation.

The announcement to import rice was conveyed by Trade Minister Enggartiasto Lukita on Thursday night (11/1). Enggar explained that the rice to be imported is a special variety which is not produced domestically, and is usually served in hotels, restaurants and catering. This policy was pursued in response to an abrupt rise in the price of rice in the marketplace. For example, in Cipinang Rice Market, the price hit Rp12,000 / kg for medium quality, above the HET (highest retail price) of Rp9,450 / kg., while premium rice went for Rp13,000 / kg, above the HET of Rp12,800 / kg.

While this may have been surprising for the public, during President Jokowi’s administration for the last 3 years, the beginning of every year begins with rice imports, while during his campaign he promised to improve farmers’ welfare – surely not in accord with the rice import policy that he pursues annually. Based on data from the Statistics Indonesia (BPS), in January-February 2015, rice import volume reached 24,512 tons. Over the same period in 2016, 2,000 tons were imported. From January-February 2017 14,473 tons came into the country.

Inappropriate Imports
According to Dwi Andreas Santosa, Chairman of the Indonesian Association of Seed Banks and Farming Technology, the government’s decision to import rice may be justified but is not in fact appropriate. ‘If the rationale is to dampen further price rises, then a decision to import can be justified. However, it is simply not appropriate. Why? Because while the decision to import is currently being made, the imported rice will arrive in late February; March is our harvest time. So eventually both farmers and the government will be conflicted’, explained the man, familiarly known as ‘Andreas’.

Meanwhile, according to the Chairman of Commission IV of House of Representatives, Edhy Prabowo, this policy is not rational and does not make sense. ‘Imports are a form of betrayal to our farmers,’ complained Edhy. ‘The government’s decision to import is too hasty, as in the last 3 years the budget for agriculture increased 100%, from Rp 15 trillion to Rp 32 trillion. However, it is now set at Rp 24 trillion, as the government is out of money. The Rp 24 trillion figure means it has gone up a full Rp 9 trillion over the budget of just 3 years ago,’ he said.

This budget is mostly directed to agricultural infrastructure, such as irrigation, strengthening of human resources, seeds & planting, and harvesting infrastructure. ‘…including paddy fields, which have reached 200 thousand hectares. With two plantings a year, let us say there is an additional output of 5 tons a year, there has been an increase of 1 million tons from previous years. Budgets for agriculture are quite high – they should be spent more rationally so that results can be seen,’ explained Edhy.

Andrew continued, saying that imported rice coming in at harvest time can be a blow to the farmers. ‘Farmers enjoy high prices. That may be true but it is only a small part. When farmers harvest, imported rice comes in, and that can exert a major impact on most farmers. This is bound to be a disaster for small farmers,’ he commented.

Andreas had previously warned the government that there would be a point where there would be a shortage of rice stocks. Signs of production decline had already appeared from July 2017, the result of a massive pest attack, covering up to 400 thousand hectares. ‘Unfortunately, the government took no action, because of an unfounded claim of a surplus. If the government had already gone into action, making a decision to import in July or August, it would have come in October, and then it could have been stored by Bulog (the Indonesia Logistics Bureau) and released to the market when the price peaked, in December and January. When it was already under control, stop the imports again, so that no one is harmed; farmers’ welfare is also not hurt,’ he said.

National rice consumption reaches 2.6 million tons per month, with a per capita consumption rate of 97.65 kg / year. Andreas observed ‘If there had been no massive pest attack, farmers would have been able to meet the national demand for rice.

‘For example, if the pest attacks had been managed properly, actually it would have been sufficient. Following the policy of playing it safe, with the same production every year, there would have been no need to raise prices or production; it will have been sufficient, because some requirements would have been replaced by noodles and wheat. Wheat is increasing steadily – this grain replaces rice consumption by 0.6% per year,’ he said.

Andreas said that imports boomeranged on the government itself, as a few days before it was decided, they announced a surplus in domestic production. Concerning the claim of a 17.6-million-ton rice surplus in 2017, he said this was impossible. ‘The claim does not make sense – it is unreasonable. Bulog is the largest rice distribution institution in Indonesia; it only has a capacity of 3 million tons. So, if Bulog’s warehouse is all full, it is only 3 million tons. This might not be fake news, but whether the data is true or not, we cannot be sure’ he said.

Meanwhile, explained Edhy, although the government is importing rice in small quantities, 500 thousand tons, compared to the total national demand which reaches 31.2 million tons per year, still shows the government’s passion for imports – which he criticized. ‘It’s a small but morally destructive thing that has been declared all along, empowering farmers, honoring farmers. At the moment, it is still the time of planting, waiting for the harvest time. Let us imagine, the imports will arrive in 2 months, and they will coincide with the harvest. Is this what the government wants? This is also open to debate, because many provinces refuse it, like South Sulawesi, Central and West Java’ he said.

Still, according to Edhy, this import policy mocks people’s self-esteem. ‘So, the people are sacrificed. We asked the farmers to plant long ago; we ask them to work hard; suddenly, when the time comes for them to enjoy a little profit, they are beaten down by imports. My experience in import policy, such as the import of meat, is that it does not affect the price in the country. Later, we become to love imports, but those who benefit are the merchants and officials doing the importing. The one who will be miserable are the working class – the farmers. I also do not agree with prices that continue to soar. Besides farmers, the next impact will be on consumers,’ he explained.

Governance
This rice import policy is a government failure in food governance. ‘Jokowi has not been successful in food governance. The spirit exists but there is no spirit in each Ministry,’ Edhy complained.

In line with Edhy, Andreas also asserted that food governance has not gone well. ‘Food governance should be based on data, because it reflects reality and predicts what will happen. If production and stock data are wrong, then the policy taken will be wrong as well. Those who will be harmed are consumers, farmers, traders and business actors,’ he said.

Solution
Rahmat Pambudi, a Professor at Bogor Agricultural Institute said ‘More than 90 percent of Indonesia’s population are rice eaters. Therefore, the government is obliged to maintain the availability and access to the staple food of rice for the population. The availability aspect means maintaining the sustainability of production, stock and distribution. The aspect of access means the price must be affordable and it has to be available. For the impoverished, the government is obliged to bear the burden through its rice program for the poor (Raskin).’

The application of a price policy should pay attention to both the interests of producers and consumers. The national rice economy policy is a comprehensive package in the effort to develop our national rice agribusiness. The package should include three components: (1) Policies on empowerment and increasing the income of rice farmers (2) Policies for ensuring food security for consumers who are included in the ‘food insecurity’ social class.  (3) Rural economy development policy related to food security, especially in increasing production and sustainability of rice production. In essence, the rice policy in the future must be flexible, in accordance with field conditions, integrated and sustainable.

The man who is also the Vice Chairman of the Board of Trustees of the Association of Indonesian Farmers’ stated that Indonesia needs a National Food Policy. With a ‘one door’ policy, food problems can be overcome.

Andreas offered two important suggestions for overcoming food issues. First, data must be sorted out, so that it can create good food governance. Second, related to food self-sufficiency, there is a mistake, a perception which equals food sovereignty and food self-sufficiency, while the key to food sovereignty is the welfare of farmers, and championing farmers as producers. Government efforts must be demonstrated in the welfare of farmers. If the welfare of farmers rises, production will automatically increase. ‘In the Rembug Nasional (National discussion), farmers plead for subsidies, from seeds, fertilizers and tools, to price protection, because that is all what they need to survive,’ Andreas concluded. (Dessy Aipipidely)