Critical Period for Farmers to Last until May

KOMPAS/REGINA RUKMORINI

A farmer dries unhusked rice on March 3, 2019 in Deyangan village of Mertoyudan district, Magelang regency, Central Java.

INDRAMAYU, KOMPAS  — The farm-level price of unhusked rice in some rice production centers is below both the production cost and the government-set purchasing price (HPP). The critical condition is expected to last until May if state logistics agency Perum Bulog is ineffective at absorbing unhusked rice from farmers.

For instance, the estimated price of dry harvested paddy (GKP) in several areas of Indramayu and Cirebon, West Java, ranged from Rp 3,400 (US 24 cents) per kg to Rp 3,750 per kg in the past week. This is below the 10 percent flexible HPP of Rp 4,070 per kg of GKP at the farm level. The selling price of unhusked rice in several production centers also decreased below the production cost of around Rp 4,200 per kg.

“This is a critical moment for rice farmers, as the peak harvest will last until [at least] May,” Agriculture Minister Andi Amran Sulaiman said on Thursday (4/4/2019) in Tambi, Sliyeg district, Indramayu regency.

Rice production reaches a high during the primary harvest season, and the farm-level price of unhusked rice decreases as a result.

Amran said the ministry and Perum Bulog were committed to absorbing GKP from local farmers at Rp 4,070 per kg. “We have asked Bulog not to let farmers suffer [financial] losses. There is no limit to unhusked rice absorption,” he said.

Earlier, the National Outstanding Farmers and Fishermen Association (NOFA) reported a GKP price of Rp 3,000-Rp 4,000 in Aceh, Rp 3,500-Rp 3,700 in West Nusa Tenggara and Rp 2,700-Rp 2,900 in Jember, East Java. Farmers hoped that the government would anticipate further price decreases to avoid losses to farmers.

KOMPAS/P RADITYA MAHENDRA YASA

Farm workers process damp rice waste on Jan. 31, 2019 in Wonorejo village of Karanganyar district, Demak regency, Central Java. Heavy rain a few days earlier flooded rice fields in several areas of Central Java, diminishing the quality of the harvested rice.

Obstacles to absorption

Indramayu Regent Supendi expressed his hope that Bulog would continue to absorb unhusked rice from farmers, especially during the harvest season. In Indramayu, 45 percent of 116,000 hectares of paddy fields were currently being harvested. “The problem is that the rice harvest occur simultaneously across several areas, thus causing a drop in the price of unhusked rice,” he said.

Bulog West Java regional head Benhur Ngkaimi said the office would continue with its efforts to absorb unhusked rice from farmers, which had absorbed less than 10 percent of the targeted 202,000 tons. This was because some of the unhusked rice did not meet the quality standards of a maximum 25 percent moisture content and 10 percent of chaff (waste).

Nationwide, Bulog had absorbed 99,444 tons of rice/unhusked rice by Thursday, far below the absorption target of 1.8 million tons.

Other than the quality of rice/unhusked rice, it is thought that Bulog’s narrower rice absorption channels had caused the lower absorption rate of local farmers’ rice/unhusked rice. The government is making efforts to expand Bulog’s absorption channels to boost absorption.

Food and Agriculture Coordination deputy Musdhalifah Machmud at the Office of the Coordinating Economic Minister said that the absorption channels would be expanded, as the non-cash food assistance (BPNT) program prioritized Bulog rice. The rice absorption channels had narrowed in the past three years due to changes to the BPNT program.

Under the BPNT scheme, Bulog rice competes with rice from other distribution agents, especially e-warong (online retailers). M.O. Royani, the secretary of the Social Affairs Ministry’s poverty management directorate general, said the BPNT program covered 44 regencies/municipalities in 2017, which increased to 219 regencies/municipalities in 2018 and 295 regencies/municipalities this year.

Bulog operations and public services director Tri Wahyudi Saleh said that 350,000 tons of rice was needed for the rice assistance program from Jan. 1 to September. This was far below previous years, with a rice supply of 2.78 million tons in 2016, 2.54 million tons in 2017 and 1.2 million tons last year. However, Tri said, Bulog had studied the potential of the retail market as an alternative distribution channel.

Researcher M. Husein Sawit of the Association of Agriculture Experts (Perhepi) said that the certainty of downstream distribution affected Bulog’s absorption of domestic rice.

“If Bulog absorbs a large volume of [rice], what about its distribution? If [the rice] is stored for a long time, its quality could diminish,” he said.

(IKI/JUD)