"This has posed a constraint for Bulog in procuring farmers` rice."Jakarta (ANTARA News) - State-owned logistics agency Bulog has been asked by the government to buy farmers` unhusked rice at a commercial price even though it is above the government-sanctioned price (HPP) level.
Agriculture Minister Suswono said in Bogor, West Java, on Thursday that the price of unhusked rice was now higher than the government-sanctioned price, which has so far been the benchmark for Bulog to buy farmers` rice.
"As the price of rice is currently higher than the government`s HPP, farmers opt to sell their rice to the market rather than to Bulog. This has posed a constraint for Bulog in procuring farmers` rice," the minister said after opening a workshop on APEC (Asia-Pacific Economic Cooperation).
In its capacity as a state-owned company, Bulog has two systems adopted while purchasing farmers` rice, namely the public service obligation (PSO) system and the commercial system.
This year, Bulog is expected to increase its rice stocks to 2 million tons but so far, its stock only reached 20 percent of the target.
The minister said that in his meeting with the Bulog president, the latter said that the state logistics` stocks reached the one million tons figure, while the Chief Economic Minister has said that rice stocks should reach the two million tons mark.
"Nonetheless, we asked Bulog to optimize its purchase of rice from the farmers," the minister said.
Last week, Chief Economics Minister Hatta Rajasa said that the government agreed with the proposal to delegate to Bulog the role of a buffer stock manager for rice, sugar and soybean.
Bulog already serves as a buffer stock agent for rice, buying the staple food from farmers, to be released when market prices are too high or supply is scarce in the market.
Bulog is also the only agent allowed to import rice for domestic stock or consumption.
"We agree with the proposal to give Bulog the role of a buffer agent," Rajasa said here on Thursday.
He said that the decision of the government to revitalize the role of Bulog as a buffer agent is aimed at controlling imports of the three commodities.
Sugar and soybean imports have so far been in the domain of private companies. "Bulog, when it needs to import, should not subcontract the job to private companies but should handle the imports itself," he said.
"Private companies may import the three commodities when Bulog could not handle the imports by itself. The private sector, therefore, still has the opportunity to have a share in the job," he added.
Rajasa said that the most important aspect is for Bulog to not run out of stock to forestall shortage in supply.
He expected Bulog to be able to maintain price stability in the market.
President Susilo Bambang Yudhoyono has decided to assign Bulog the duty of being the stabilizer for the prices of essential foodstuffs like rice, corn, soybean, sugar and beef.
(Uu.A014/INE/KR-BSR/S012)
Editor: Priyambodo RH
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