Jakarta – National Police chief Gen. Tito Karnavian has said rice firms took too much profit from the unhusked rice they bought from farmers, who received subsidies to grow the crop.

"Around 56 million farmers get about Rp 60 trillion [US$4.49 billion] from the commodity, while the traders get Rp 130 trillion," Tito said at the State Palace, recently.

Last week, the police raided a rice warehouse in Bekasi, West Java, owned by PT Indo Beras Unggul (IBU), a producer of allegedly bogus premium-quality rice.

National Police Criminal Investigation Department (Bareskrim) economic crimes chief Brig. Gen. Agung Setya said the company had bought unhusked rice from farmers for Rp 4,900 per kilogram.

It reportedly sold it as medium and premium rice at Rp 13,700 and Rp 20,400 per kilogram, respectively. Meanwhile, the retail price set by the government was Rp 9,500 per kilogram.

Agriculture Minister Andi Amran Sulaiman said this year the government had allocated Rp 30 trillion for subsidized fertilizers and Rp 50 trillion to Rp 60 trillion for rice seeds and tractor purchases for farmers.

PT IBU spokesman Jo Tjong Seng said the government subsidized farmers so that they could increase their productivity, while his company bought rice from any farmer whether they were subsidized or not.

Tito stressed the government wanted the farmers to get more benefit from the crop, while traders were also allowed to get a fair margin from their business. "Even though it is justified by market mechanisms, the government still needs to intervene in the rice distribution," he said. (dis/bbn)

Source: http://www.thejakartapost.com/news/2017/07/26/producers-take-too-much-margin-from-rice.html