Rise in global food prices a blessing for Indonesia: President

Wahyoe Boediwardhana ,  The Jakarta Post ,  Pasuruan, East Java   |  Mon, 04/28/2008 11:42 AM  |  Headlines

President Susilo Bambang Yudhoyono told the Nahdatul Ulama youth wing Ansor on Sunday that Indonesia could benefit from the rise in global food prices.

“In my spiritual contemplation a few days back with friends in Yogyakarta, I arrived at a conclusion that the surge in staple food prices is actually a blessing instead of a disaster,” the President said during a ceremony to mark the 74th anniversary of Ansor in Pasuruan, East Java.

Nahdatul Ulama is the largest Muslim group in the country with ties to the National Awakening Party (PKB) and former president Abdurrahman “Gus Dur” Wahid.

Many countries with limited land and natural resources, he said, are suffering from food price inflation, but not Indonesia, as long as we can maintain and improve our agriculture and farming industries, particularly those producing rice, corn, soybeans, sugar, beef, chicken and eggs.

“God willing, (the food price inflation) will be a blessing. Therefore, I urge all members of Ansor to join the government in the effort to increase our food production from now on and ahead,” he said.

This year, he said, East Java was likely to enjoy surplus rice production of three million tons, a significant improvement from three years ago when many doubted the country could regain rice self-sufficiency.

“Last year’s production already met demand. This year, if nothing extraordinary happens, we will enjoy a rice production surplus,” he said, adding that lessons from the rice industry should be implemented in other food-producing industries.

Last week, the government raised the benchmark price for rice purchases by state logistics agency Bulog in order to increase farmers’ incomes and discourage the smuggling of the cereal by addressing the price disparity for rice in Indonesia with that in neighboring countries.

The price of unhusked paddy delivered to Bulog now stands at Rp 2,600 (28 US cents) a kilogram, while stored rice is sold at Rp 4,300.

Rice prices in the Chicago market last week reached a record high at US$1,000 per ton or about Rp 9,200 per kg

To secure domestic supplies, the government also has issued a regulation appointing Bulog as the sole exporter of rice and setting a minimum three million tons annual rice production surplus as a prerequisite for exports.

So far, Bulog has absorbed a total of 1.4 million tons of rice, and is aiming for 2.43 million tons by the end of the year as the country’s total rice production is projected to grow by 5 percent from 33 million tons last year.

Commenting on the surge in oil prices, President Yudhoyono said the country needed to examine where it stood on the situation.

“A smart nation is a nation that is able to take a lesson and a blessing from the crude oil price increases. We have to increase our oil production while seeking other alternative sources of energy,” he said.  (The Jakarta Post)