Agriculture Reference
In-Depth Information
cial responsibility role remains wafer thin. Its role is also frequently confused in pub-
lic debate where it is still often associated with ensuring price stabilization.
BULOG continues to be the key institution providing government rice supplies
for military and civil service rations. It has also assumed responsibility for govern-
ment programmes suh as the RASKIN rice-for-the-poor programme (discussed be-
low), a programme that consumed a full 80 per cent of BULOG's rice stoks in 2007
(SMERU, 2008). However, by 2008, BULOG was responsible for only procuring ap-
proximately 8 per cent of the country's rice harvest, whih it stored in its 1,575 ware-
houses with a total storage capacity of nearly four million tons — compared with
national production in 2008 of 37 million tons (Arifin, 2009). While the overall cost
of BULOG's role as a national logistical warehousing agency, relative to its social
benefits, continue to be sharply debated in Indonesia, it is generally accepted that
the agency was successful in its role of stabilizing rice prices during the New Order
regime (as argued by Timmer, 1996).
Trade policy and food security
Throughout the New Order, BULOG was granted a monopoly over imports of all
major tradeable foodstufs — rice, sugar, maize and soybeans. And for muh of this
period, domestic rice prices were actually maintained in relative accordance with
world prices (Thomas and Orden, 2004). The large national rice deficits recorded in
1998, combined with the IMF structural adjustment pakage, even resulted in the
temporary liberalization of rice imports. Starting in 2000, however, the popularly
elected governments of Presidents Abdurrahman Wahid and Megawati Sukarnoputri
began to again tightly regulate imports to protect domestic rice producers. This was
ahieved through a formal import tarif of 25-30 per cent. (homas and Orden, 2004),
however, estimate that effective tariffs were as high as 75 per cent at that time due
to non-tarif barriers suh as diicult customs regulations and costly inspections.)
Special licensing regulations also limited the involvement of private sector traders,
reducing competition and possibly resulting in further upward pressure on prices.
This policy was then followed by a temporary ban on all rice imports during the
Megawati presidency, before returning to a reduced import tariff (of between 8 per
cent and 11 per cent) during the SBY presidency.
Fane and Warr (2008) explain the tendency for protectionist trade policy during
the reformasi period as resulting from the greater political influence of farmers in
parliamentary democracy at a time when the ascendancy of economic nationalism
