Jakarta – Experts welcomed on Friday the government's plan to provide incentives for rice farmers, but said that the government must also curb the smuggling of cheap rice into the country, which has been hurting farmers' income.
"It is a sympathetic move. The government wants to ease the burden on farmers by providing the incentives ... But without curbing the illegal import of rice, the incentives will not benefit farmers," Bayu Krisnamurthi, director of the Center for Development Studies at Bogor Institute of Agriculture (IPB), told The Jakarta Post.
The Ministry of Agriculture said on Thursday it had proposed a hike in the floor price of unhusked rice by 15 percent, to Rp 1,746 per kg; an increase in the import tariff on rice to Rp 735 per kg, from Rp 430, and a fertilizer subsidy.
The floor price is the reference price level used by the State Logistics Agency (Bulog) to purchase rice from farmers for reserves purpose.
Farmers have long called for such incentives amid the rising cost of production and the massive inflow of cheap imported rice products. An increase in the import tariff is expected to limit rice imports.
Under the proposed fertilizer subsidy policy, the price of urea-based fertilizer, for example, would reduce, to Rp 1,150 per kg, from the current Rp 1,400.
Bayu, however, said that the higher import tariff could trigger private importers to ship in illegally cheap rice products. He said that the customs office had a strategic role to prevent the smuggling of rice.
Chairman of the Indonesian Farmers Association (HKTI) Siswono Yudhohusodo concurred. "Curbing illegal rice imports is essential if the government wants to encourage local farmers to continue planting rice," Siswono told the Post.
He said that it was impossible for local rice products to compete with cheaper imported rice. He cited as an example that smuggled rice from Thailand was being sold here at Rp 1,700 per kg, compared with the price of local rice at around Rp 2,500 per kg.
He said that the massive influx of cheaper imported rice was an indication of the government's inability to protect the interests of local farmers.