Agriculture Reference
In-Depth Information
Indonesia is still facing seriously low caloric and protein intakes: 56 percent
of the population consume below the recommended level of 2,150 kilocalories
per day, and 36 percent of the population consume below the the recommended
level of 45 grams of proteins per day. Using these measures, the index of food
adequacy in rural areas is 63, which is lower than that in urban areas (Arifin 2001).
These results suggest that a poverty-alleviation program should go beyond pro-
viding cheap food and adquate caloric intake: it should also emphasize commu-
nity empowerment and establish efficient linkages between rural and urban areas
to generate new employment in the country. During the current period of transi-
tion, proper policies for food security and economic recovery are very difficult to
formulate and implement without clearly defined priorities and a time frame to
solve important issues on farm structures and inefficient production and distri-
bution systems of rice and other foodstuffs in the country.
To face these challenges, future reforms must include food policy reforms
at the macro level and operational reforms in BULOG at the micro and busi-
ness levels. The reforms on macro-level food policy have faced difficult cir-
cumstances: the slow pace of research and development (R&D) and techno-
logical change to increase the production, leveling-off of production and
productivity in the past decade, declining capacity of the government to pro-
vide sufficient supports for farmers, declining world prices of rice because of
globalization and trade liberalization, and the small size of landholdings of rice
farmers. The micro-level and business-level reforms in BULOG should focus
on eliminating its dual function in the private sector and as a government
agency, which, it is generally argued, will contribute to improved efficiency,
transparency, and public accountability.
Nonparastatal Status of BULOG: The Final Form?
Effective January 20, 2003, BULOG was officially changed to a state-owned
enterprise (SOE).
8
This change was in response to public pressures to reform
BULOG and to increase transparency and accountability on food policy and
government policy in general. Complying with the new state-owned enterprise
law (Law 19/2003), BULOG chose to become a general company.
9
In its new
form, it has a dual function as a purely profit-maximizing body and as a public
agency to distribute subsidized rice for the poor; and is allowed to enter into
other trading activities and strategic businesses as long as the government gives
it the mandate to do so.
8. Government Decree (
Peraturan Pemerintah
) 7/2003, January 20, 2003.
9. The law acknowledges only two forms of state-owned enterprises: (1) general company
(
perusahaan umum,
or
Perum
), for which the state owns all of the shares and (2) limited company
(
perseroan terbatas,
or
PT
), for which the public can own some shares in open market.
