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Government Optimizes Absorption of Rice from Farmers to Stabilize Prices

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By: Gita Oktaviani )*

The Government of the Republic of Indonesia (RI) has continued to optimize all efforts, including direct absorption of rice and grain from local domestic farmers to ensure the stabilization of rice prices on the market.

The Public Company for Logistics Affairs (Perum Bulog) is optimistic that it will continue to absorb rice from the production of local farmers in the country. Even though harvest yields are now beginning to decline, efforts are being made to ensure optimal absorption.

On the other hand, Bulog itself also predicts that there will be a potential surplus of up to 0.24 million tonnes of milled dry grain (GKG) if referring to the estimated GKG production in September 2023. Regarding this matter, the Head of the Operational Planning and Public Services Division of Perum Bulog, Epi Sulandari, revealed that there is still quite large potential in several regions that can be absorbed to continue to strengthen the government’s rice reserves.

For information, production of milled dry grain (GKG) from January to August 2023 is predicted to reach up to 40.22 tons. Furthermore, Bulog will also focus on absorbing from several regions that are still producing, despite El Nino.

Referring to data from the Central Statistics Agency (BPS), Bulog noted that there were 5 (five) provinces that were still producing grain from August to September 2023. For September alone, in South Sulawesi Province (Sulsel) there were up to 828,156 tons of GKG, then in West Java 741,651 tons of GKG, East Java 502,087 tons of GKG, Lampung 393,240 tons of GKG and Central Java 358,313 tons of GKG. Optimism for rice stocks was expressed by Epi that in Bulog’s warehouses by the end of 2023 it will reach up to 1.253 million tons.

The government continues to strive to further optimize the absorption of rice from local domestic farmers to meet market needs in an effort to be able to control the inflation rate of food commodity prices and also the recent increase in rice prices.

This optimization was carried out by increasing the absorption of grain and rice from farmers, from the start which was only able to absorb 200 tonnes, then continued to increase to 1000 tonnes. It cannot be denied that in this effort there will be challenges, namely having to be able to compete with large traders from abroad.

Therefore, a number of strategic steps are needed to establish synergy with local farmers in the country to be able to optimize the absorption of grain and rice. With efforts to directly absorb rice from farmers, it will clearly be possible to cut off rice distribution channels.

Currently, the government of the Republic of Indonesia (RI) itself still has adequate stocks of grain and rice to anticipate a possible spike in rice prices on the market. This stock is maintained in order to control the price of rice so that it remains affordable for the public.

Not only that, but having adequate rice stocks is certainly useful for anticipating a lack of supply in December, where it is predicted that rice production from farmers will not be able to be carried out optimally because this September has not yet entered the harvest period.

So, all the efforts made by the government are not only aimed at overcoming the problem of inflation, but are also able to guarantee the supply of cheap rice so that there is no panic in society. With the existence of Bank Indonesia (BI) and the Department of Industry and Trade (Disperindag), people are closer to getting rice more affordably.

The efforts made by the Indonesian Government to control inflation in food prices are not to compete with traders, but instead can collaborate with market traders themselves. When there is an increase in prices, immediate intervention is carried out with market operations so that prices can be brought back under control.

Meanwhile, the Coordinating Minister for Human Development and Culture (Menko PMK), Muhadjir Effendy, said that the President of the Republic of Indonesia, Joko Widodo (Jokowi) had given 2 (two) directions to handle the problem of rising rice prices on the market.

The two directions directly ordered by the Head of State were to provide social assistance (bansos) for rice and carry out market operations. For social assistance, rice itself is given to beneficiary families (KPM) in the form of the Family Hope Program (PKH) and non-cash food assistance (BPNT) as well as market operations.

In order to ensure stabilization of rice prices on the market, the Indonesian Government continues to optimize the absorption of rice and grain directly from local domestic farmers. This is clearly very beneficial because it is able to guarantee and maintain people’s purchasing power.

)* The author is a Contributor to the Reading Window Institute

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