"Presidential Regulation No. 48 of 2016 mandates Bulog's involvement in the rice supply chain from the upstream to downstream processes. The problem might arise when Bulog is obliged to procure rice from farmers in the upstream process, yet they are struggling to distribute rice to the market in the downstream process," Setiawan highlighted the issue in a release obtained here on Saturday.
The CIPS researcher remarked that unlike private enterprises, Bulog was obligated to purchase rice grains without considering the quality of grains and keep national buffer stock in its warehouses.
The current arrangement has failed to address the issue in the downstream rice distribution process, thereby affecting Bulog's long-term performance in the supply chain system, according to Setiawan.
"Each region has its different production process resulting in a complicated supply chain. Taking into account this situation, Bulog's role in the supply chain should be reassessed, as competition with private enterprises would disadvantage Bulog since private enterprises could seek better rice quality from the farmers and bid a higher price for their rice," Setiawan expounded.
Bulog's Director Budi Waseso had earlier stated that the current government's rice stocks reached 1.2 million tons, with over one to 1.5 million tons of recently harvested rice also having to be purchased by Bulog in accordance with Presidential Instruction No. 5 of 2015 that directs it to purchase farmers' rice crops.
Waseso stated that parts of the current rice stocks had to be allocated for the government program to distribute rice for eligible families impacted by the enforcement of public activities restriction (PPKM).
Bulog has distributed around 200 tons of rice to 8.8 million eligible families during the second stage of distribution, Secretary General of the Social Ministry Hartono Laras stated in Jakarta, Thursday (Aug 12). Some 450 tons of rice were distributed to 20 million families during the first stage of the program earlier, with each family receiving 10 kg of rice.
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Translator: M Razi R, Nabil Ihsan
Editor: Sri Haryati
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