Simon Montlake, Jakarta – The Indonesian government is under pressure to consider increasing protection for domestic rice producers, after protests by farmers over low prices paid for unhusked rice, local newspapers said Tuesday.

President Abdurrahman Wahid said Monday his cabinet would discuss Wednesday the problems faced by rice producers, but didn't comment on Agriculture Minister M. Prakosa's demand for an increase in rice import tariffs.

Prakosa last week urged the government to increase the import tax on rice to between 45% and 50%. The current tariff level on milled rice, imposed January 1, is 30%, or 430 rupiah ($1=IDR7,430) a kilogram. However, Trade Minister Yusuf Kalla said it was too early to assess the impact of the rice tariff and therefore it would be premature to propose such an increase.

Indonesia is also bound by the letter of credit it signed in January with the International Monetary Fund which stated the rice tariff wasn't permanent and should be reviewed after six months. The World Bank and the IMF have clashed with Indonesia over the level of the tariff, preferring a lower barrier, and are likely to resist any increase.

Hundreds of farmers in South Sulawesi and East Java staged separate demonstrations Monday against low rice prices and competition from imported rice, Media Indonesia reported. A local government official in South Sulawesi said imported rice would be banned in the province, the Jakarta Post said.

Farmers say prices for unhusked rice have fallen to as low as IDR60/kg, compared with the official farmgate price of IDR1,020/kg which the National Logistics Agency, or Bulog, pays for rice. Trade sources said rice farmers are selling their rice to local traders at rockbottom prices as local Bulog agencies have been slow to buy. "They are forced to let go at whatever price they can get," said a Jakarta-based trader.

Bulog has so far budgeted IDR500 billion for buying unhusked rice in 2000 and has already begun buying in the key growing areas of East and Central Java, a Bulog spokesman said Monday. The agency intervenes to stabilize prices and is also tasked with maintaining stocks and distributing rice to civil servants, the military and poor consumers.

Indonesian unhusked rice production in 2000 is forecast by Bulog at 49.8 million metric tons, compared with 51 million tons forecast by the US Department of Agriculture.