Pustaka Ilmiah Universitas Padjadjaran

Abstrak

Rice Self-Sufficiency: Fixed And Flexible Approaches The Case Of Indonesia

Rice is not just a commodity, it occupies a most important position in Indonesian politics. Having enough rice to feed everyone is seen as a mark of national prosperity and sovereignty. The lumbung, the rice barn found in every island and among all ethnic groups, is extensively used as a nationally recognized cultural symbol of prosperity. Rice has historically epitomized food security as guaranteed to all citizens by the ruling power (king or sultan) in a locality. The tiny grain is not only the main staple but a powerful icon that has carried into modem-day Indonesia. It is difficult to argue how a country can survive or let alone aspire to greatness without having control of this basic commodity. The argument has gained even stronger support from the Parliament and interest groups following the food price crisis in 2008. Along this trend, the Indonesian government has adopted a policy of food self-sufficiency. The policy implements at least 90% self-sufficiency and allows the Bureau of Logistics (BULOG), which deals with food distribution, price control, and to import about 10%. However, there are no clear rules or standards about what determines the need for rice imports, how much imports are necessary, and when to import. The issue of rice importation is further complicated by the unclear basis of decision-making and multiple authorities. These problems have generated heated debates and greater uncertainty in the rice market, further increasing rice prices during critical times to the disadvantage of the poor. Controlling domestic market with restriction for import and export and isolating from the international market, the government have been able to control more stable price but price has not been returning to the seasonal price position and tend to increase higher from the previous year (in a real value). By the end of 2009, rice price in Indonesia was already higher than the international market and increasing. This is to demonstrate that a man made isolated stabilization mechanism is rigid and costly. High cost of food will hurt the poor and the area most vulnerable to chronic food insecurity. However, there are better alternatives policies to achieve the objective of food security according to the New Food Law 18/2012. The Benefit Cost analysis shows that the best and more pro-trade approach is a flexible self-sufficiency policy with a tariff mechanism. The tariff was calculated to be appropriately set at 32 percent ad-valorem tax. The challenge is on a border control and high cost of monitoring for the tariff policy to be effective. The analysis also shows that a flexible self-sufficiency policy with a quota mechanism could be the second alternative. The policy gives almost the same Benefit Cost ratio with tariff policy. However, this policy is less preferred from the trade agreement perspective. The analysis demonstrates that the Fixed 100% Rice Self-Sufficiency policy is the most expensive and less effective policy to achieve the policy objective.