Achmad Faisal, Surabaya – A surplus in rice production is no guarantee that farmers' well being – measured by their buying power – will improve, as the latest statistics released this month showed.
Official data from the East Java Central Statistics Agency (BPS) released on April 1, showed the Farmers Exchange Value (NTP) in East Java – one of the country's rice production centers renowned for excesses of rice stock – had dropped by 0.21 percent between January and February this year, from 96.72 percent to 96.2 percent.
East Java BPS statistics distribution affairs head Adi Nugroho said the drop was attributed to the price index measuring the price received by rice farmers growing slower than the price index measuring the price paid by farmers.
"The price index (for the price received by farmers) has risen by 0.71 percent, while the price index (for the price) paid rose by 0.92 percent," said Adi.
Based on the NTP of the respective subsectors in February 2009, two agricultural subsectors saw their NTP indices drop – the food crop subsector by 1.37 percent and community-based plantation crops by 0.97 percent, while three other agricultural subsectors' indices rose, namely horticultural crops (2.55 percent), livestock (0.90 percent) and fisheries (0.49 percent). Nimanto, leader of the East Java chapter of the Mainstay Fishermen and Farmers Contact group (KTNA), said had the government empowered the State Logistics Agency (Bulog), Bulog could have prevented the market from not absorbing the rice surplus. Before becoming a state enterprise, Bulog used to be able to protect the price of dried unhusked rice (GKP) – currently set at Rp 2,400 per kilogram – and act as a buffer, buying all the farmers' rice stock.
"Bulog acts only as a buffer for the price based on the government set price (HPP), and it won't buy rice above that. The price of rice in a number of provinces is influenced by many factors, such as water content and rice quality," he said.
In response to the rice export policy, he said his group supported the move as long as farmers also benefited from it, or at least farmers didn't suffer from producing rice in bigger volumes.
In 2008, East Java was able to yield as much as 6.8 million tons of rice, and consume only 3.6 million tons, therefore producing a surplus of 3.2 million tons. In the first quarter of this year, East Java produced an estimated 800,000 tons of extra rice, thanks to an additional 450 hectares of farmland planted with hybrid rice seedlings.
Bulog can only absorb 1 million of East Java's estimated 7.6 million tons of rice produced this year, so the administration is currently seeking a solution to distribute the remaining volume.
East Java Governor Soekarwo acknowledged he was still deciding what to do about the production surplus, considering a number of alternative measures such as exporting the rice, or selling it outside his province.