Farmers' associations have raised their objections to the government’s plan to import between 1 million and 1.5 million tons of rice this year, as the country moves closer to peak harvest season and farmers face falling prices. Indonesian Farmer Union (SPI) chairman Henry Saragih said the average price of dry unhusked rice in Tuban, East Java, one of the country’s production centers, now stood at Rp 3,700 (26 US cents) per kilogram, lower than the government purchasing price (HPP) of Rp 4,200 per kg. “The rice import plan ignores the situation farmers are currently facing at home,” Henry said in a press release on Wednesday. “Right now, various regions in the country are going into the harvest season. Moreover, farmers, especially rice farmers, are dealing with falling unhusked rice prices.”
Peak harvest season is expected to fall in early April, while the national average price of dry unhusked rice – the rawest form of rice – dipped 8.08 percent year-on-year (yoy) to Rp 4,758 per kg in February, Statistics Indonesia (BPS) data shows. The price is relatively low but not below the HPP. Rice imports are a recurring point of contention between the government and farmers' associations. The former imports rice to build reserves to shield the poor from high prices and shortages, while the latter, most of whom are low-income people themselves, seek to sell their yields at the highest possible prices.
The planned rice import volume is more than double that of 2019 at 444,508.8 tons, according to recent BPS data. However, Indonesia sources an overwhelming majority of its rice from domestic production, which places its import dependency ratio for rice at a mere 6.2 percent, according to a report published in May last year by the World Food Programme (WFP), quoting 2018 data. The new rice import plan aims at building Indonesia’s “iron stock” and supporting the government’s social assistance programs, the trade minister said during a work meeting on March 4, which was also when the government announced the import plan. The government has also instructed the State Logistics Agency (Bulog) to import the rice. “It is my responsibility to ensure that rice stocks and distribution times align with demand. This will be coordinated between stakeholders,” Trade Minister Muhammad Lutfi said during the meeting. Backing SPI’s stance, the Coalition for Food Sovereignty (KRKP) and National Farmer Movement (GPN) urged the government to strengthen Bulog’s purchasing power to procure rice from local farmers instead of importing rice to build the country’s buffer stock. Based on its observations on Java Island, the two organizations reported no threats against domestic production and thus, the yields from the April-May harvest season should be enough to meet domestic demand. “So far, there have been no findings or news about production disruptions like pests and diseases or floods. National production does not appear to be facing fluctuations or threats,” the KRKP and GPN said in a press release published on March 7. The country’s rice production centers are mostly located on Java Island, with East Java producing 9.94 million tons last year, followed by Central Java, West Java, South Sulawesi and South Sumatra, according to BPS data. For the January-April period this year, BPS has forecast a 26.88 percent year-on-year (yoy) rise to 25.37 million tons in rice production in terms of dry milled unhusked rice.
While the price of unhusked rice has fluctuated recently, the average price of rice remained relatively stable at Rp 11,800 per kg in traditional markets on Wednesday, according to data from the Information Center for Strategic Food Prices (PIHPS). Felippa Ann Amanta, the head of research at the Center for Indonesian Policy Studies (CIPS), also urged Bulog to maximize absorbing local rice production, given the increase in last year’s production. The country’s rice consumption was estimated to reach 7.48 million tons between January and March this year, according to a January estimate from the Agriculture Ministry. With a surplus from last year of 6.75 million tons, the country’s rice supply was estimated to reach 15.01 million tons in the period. “Besides, importing is not so wise if carried out during the harvest season,” Felippa was quoted as saying in a press release on Tuesday. “The price movements of rice can also serve as a reference in deciding whether rice imports are necessary.” Sahat Marulitua Pasaribu, a researcher at the Agriculture Ministry, said on Wednesday that the planned rice import was not expected to affect the market as it was meant to act as buffer stock and social assistance, such as in the case of natural disasters. “We hope the import won’t distort prices [or] leak onto the market,” Sahat said during a virtual discussion. “[The price] is stable at the moment.”
