Thursday, March 3, 2011

Ministry Sounds Bullish Note On Expected Rice Production

Rice production is expected to increase 7 percent this year as the government tries to secure a stable food supply and keep prices under control, an Agriculture Ministry official said.

Achmad Suryana, head of the Food Security Agency at the ministry, said unhusked rice production was expected to reach 71 million tons this year, up from last year’s estimated production of 66.4 million tons. That would create a surplus of 7 million tons.

“We have revised our target. Our initial estimate was 69 million tons, but we are increasing efforts to boost rice production,” Achmad said on Tuesday. He said the surplus was based on per capita rice consumption of 139.15 kilograms per year.

The ministry’s production forecast is higher than the Central Statistics Agency’s (BPS) projected 1.4 percent increase to 67.31 million tons this year.

To reach that increase, Achmad said, the government will continue its efforts to maintain fertilizer subsidies, make more land available for farming, provide high-quality rice seeds to farmers and use new technology.

“We want to increase productivity to 5.2 tons per hectare from 4.8 tons per hectare. We also want to increase the availability of land from 13 million hectares to 14 million hectares,” he said.Speeding up large-scale food production and slowing farmland conversion are among the government’s priorities as it seeks food security.

Coordinating Minister for the Economy Hatta Rajasa announced in January plans for the $5 billion Merauke Integrated Food and Energy Estate, a 480,000-hectare agricultural estate in West Papua. It is expected to produce almost two million tons of rice, two million tons of corn, 167,000 tons of soybeans, 2.5 million tons of sugar and 937,000 tons of palm oil per year while also providing grazing space for 64,000 cattle.

“Indonesia has a rice consumption of 139.15 kilograms per capita per year. That is bigger than Malaysia’s 80 kilograms per year and Japan’s 50 kilograms per year. Even though we can meet the demand and still have some surplus, we need imports to stabilize prices,” he said.

State logistics agency Bulog imported about 1.2 million tons of rice last year, he said, giving Indonesia a surplus of about 4 million tons. “We’re not short of rice. The government’s purchasing price is not appealing to farmers as market prices continue to soar. We needed the imports to stabilize prices,” he said.

Bulog, which said on Monday it had ceased importing rice and had sufficient stockpiles for the next six months, buys rice from local farmers at prices set by the government. Rice procured by Bulog is mainly provided to poor Indonesians.

Mahendra Siregar, deputy to the trade minister, said on Tuesday that Bulog was required to procure up to 3.5 million tons of rice and boost its stockpiles 30 percent to 2 million tons.

“Prices are not only high but volatile. Pressures are likely to continue as the population grows and incomes rise. This could change consumption patterns,” he said. “In general, the price of rice declined by around Rp 400 per kilogram last month, but that decline was offset by a sharp increase in grains in other regions such as Papua and Riau.”