Agriculture Reference
In-Depth Information
stabilize rice prices on behalf of the welfare of the poor. On December 22, the
government announced it would import 520,000 tons of rice to cover the short-
age of BULOG's stock until harvest time in March 2007 (World Food Pro-
gramme 2006). The nature of the food security debate has changed.
What next? The decision to import rice to stabilize rice prices is clearly an
attempt by the economic realists in the government to wrest control of food
security issues from the politically charged agriculture lobby. But nothing has
actually been done yet to clarify rice trade mechanisms beyond this one-off
deal. The import ban is still technically in place, and BULOG's stocks—and
ability to sustain market operations on behalf of stabilizing rice prices—are still
hostage to unique decisions by the president and the cabinet. Even in the short
run, Indonesia has still not come up with a coherent strategy for food security.
In the longer run, the links between pro-poor growth and food security re-
main weak in political terms while still strong in economic terms. The political
appeal of the new strategy for dealing with poverty—direct fiscal transfers to
the poor—is obvious. These transfers have immediate and visible impact on the
recipients, and the political pitch for the programs makes it sound as though the
government is actively committed to poverty reduction. Thus, although democ-
racy has probably increased the size and influence of the political coalition con-
cerned about poverty, it has sharply undermined the coalition supporting eco-
nomic growth as the main mechanism for dealing with poverty. In the current
political rhetoric, poverty reduction is no longer linked to economic growth, and
food security remains almost entirely a political issue—despite the success in
arranging imports for the next several months.
In fact, BULOG seems to have built a political coalition similar to the one
supporting food stamps in the U.S. Congress—support comes from conserva-
tive rural legislators eager to have additional markets for the food that is pro-
duced in surplus by their farm constituents, and from urban liberals who live in
areas where many poor people use food stamps as a major source of their in-
come. Similarly, BULOG has assembled support for its rice procurement pro-
gram (to help rice farmers), which supplies the rice for RASKIN. No parlia-
mentarians have been willing to take on both dimensions of the rice program
simultaneously, and so the huge budget subsidies that accrue to BULOG to run
these programs, and the corruption that accompanies them, go unchallenged.
BULOG's budget in 2005 was Rp 4.7 trillion.
In summary, four factors seem to distinguish the current political context
with respect to pro-poor growth from the earlier era when it was so success-
ful. 16 First, there is no longer an active concern to hold down rice prices to pro-
tect poor urban consumers and the rural landless, as there was in the late 1960s,
when fear of communist insurgency was still apparent. Second, there seems to
16. This four-point summary was suggested by Ralph Cummings Jr. in a private communi-
cation.
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