This Year's Rice Imports to Be Largest Since 2011

'Stop rice imports,' reads the banner, as Indonesia is going to import 2 million tons this year. (Antara Photo/Yusuf Nugroho)

By : Adinda Normala | on 12:21 PM August 28, 2018
Category : Business, Commodities, Featured

Jakarta. President Joko "Jokowi" Widodo may import 2 million tons of rice this year, falling short of fulfilling his 2014 presidential campaign promise of rice self-sufficiency.

Since 2015, Indonesia has imported 3.35 million tons of rice. This year the imports are going to be increased, as severe droughts are expected to disrupt harvests. A price spike in the country's staple food would not be beneficial to the president who is seeking reelection next year.

Last week, the Ministry of Trade issued a permit for the the national procurement agency, Bulog, to import 1 million tons of medium quality rice for the second half of the year. The year's total rice imports would then become 2 million tons, the highest since 2011.

Said Abdullah, coordinator of the People's Coalition for Food Sovereignty (KRKP), a farmers' advocacy group, said droughts may continue until the end of the year, making it hard for the government's rice production target of 47 million tons to be achieved.

"Rice harvests dropped by at least 50 percent due to droughts, even there are regions that failed 100 percent, especially those far from rivers, lacking irrigation," Said told the Jakarta Globe on Sunday (27/08).

According to the Meteorology, Climatology and Geophysics Agency (BMKG), most of the country's rice-producing regions, especially in Java, will see no rains before October.

Bulog data shows in mid-August the agency's rice supplies were 2 million tons in its warehouses across the country. The amount, Said said, should be at least 3 million tons to be safe.

Nailul Huda, economist at the Institute for Development of Economics and Finance (Indef), said this year's imports are meant to secure Bulog's rice supplies during the 2019 election campaign.

"As harvests are between April and May, the beginning of next year is the most crucial time, because there is a risk of price fluctuations. Importing rice at that time would be [politically] suicidal. Therefore, the safest way is to issue import permits this year, with less political risk," Nailul said.

Trade Minister Enggartiasto Lukita said the rice imports are meant to keep the inflation rate at 3.5 percent, in accordance with this year's state budget, not because of the upcoming election.

"We are not talking about the election, we are talking about inflation, the rising prices, so we cannot leave it unattended," Enggartiasto told reporters on Monday.

"We need to import … because we see there is a tendency for the prices to increase while the supplies decrease. We need to fill the stock," Enggartiasto said.

Jokowi has been importing rice since 2015, the highest imports so far were in 2016, with 1.28 million tons, up a 49 percent from a year earlier. The country's imports then decreased by 76 percent to only 305,275 tons last year.

According to data from the Ministry of Agriculture, Indonesians will consume 33.8 million tons of rice this year, compared with 30.65 million tons in 2017. Last year, 47 million tons were produced domestically.

Edhy Prabowo, a Great Indonesia Movement Party (Gerindra) lawmaker who sits at House of Representatives Commission IV, which oversees agriculture, has questioned the government's decision to import rice again, as to him rice supplies seem sufficient.

"I can't understand the logic of importing rice again. Programs that we provide in the agriculture sector are supposed to have fulfilled the country's rice needs for one year … Import is allowed only if [a commodity] is not available domestically," Edhy said.

Rice consumption in Indonesia is among the highest in the world, with the average citizen consuming 114 kilograms every year. In comparison, the average annual consumption of rice in Vietnam is 191 kilograms per person, in Thailand 147 kilograms, in India 78 kilograms and in China 75 kilograms, according to data compiled by the Organization for Economic Cooperation and Development in 2016.

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