[fusion_builder_container hundred_percent=”no” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” overlay_color=”” video_preview_image=”” border_size=”” border_color=”” border_style=”solid” padding_top=”” padding_bottom=”” padding_left=”” padding_right=””][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” border_position=”all” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” center_content=”no” last=”no” min_height=”” hover_type=”none” link=””][fusion_text]<\/p>\n
Indonesia possesses many excellent economists who know supply and demand. They graduate from the economics departments of not only the nation\u2019s best universities that rank with counterparts in other countries but from foreign universities as well.\u00a0 Many occupy senior positions in the government. But yet, when it comes to commodities such as rice or beef that are key to the lives of 90% of Indonesians, their influence seems minimized as politics unfortunately usually wins over economics.\u00a0 With a Presidential election just over the horizon its appropriate to examine this issue.<\/p>\n
Even though Indonesia has grown a sizable middle class, whose appetites have widened to include instant wheat noodles, rice remains the dominant staple and just recently prices spiked when Indonesia planners miscalculated how much locally grown product would be available in the market. The Agriculture Ministry predicted a rice surplus when in fact the Central Bureau of Statistics had different numbers. \u00a0 The Trade Ministry, meanwhile, noted prices were tracking over 15% higher than their target retail rice. So, even though it was close to harvest season, the government was forced to suddenly allow the import of 500,000 tons of rice.\u00a0 If the import window had remained open, prices would have remained much more stable.\u00a0 Rice price is so key to Indonesia that a World Bank study calculated that a 10% rise in rice prices led to a 1.1% rise in poverty.<\/p>\n
Economists will tell you that the root of the problem with rice is the myth of self sufficiency and the sale of that myth to Indonesia\u2019s people as a political necessity.\u00a0 Politicians find it convenient to preach this gospel as if they could control the rains and all the other factors that effect supply. It is rare to find a policymaker who is not for open trade but yet time and again, Indonesians suffer from shortages and price spikes for the things they consumer daily.\u00a0 Although her I am focused on rice, I could also make similar points about beef, oranges, apples, and other products where tariff and non tariff barriers, import and export bans, are not supported by the economics.<\/p>\n
For generations Indonesian leaders have followed the trail toward rice self sufficiency and it has often led them astray.\u00a0 Currently, President Jokowi is trying to reverse the damage from President Suharto\u2019s 1990\u2019s failed attempt to grow rice massively in Kalimantan where 1 million hectares (an area slightly smaller than Connecticut) of peat swamp forest were cleared and 2490 miles of canals were constructed.\u00a0 No rice was ever grown as the soils were inhospitable.\u00a0 The cleared land periodically erupts in smoldering peat fires and Jokowi is now damming the drainage canals.\u00a0 In 2009 President SBY proposed that another 1 million hectares be cleared near Merauke, Papua, for a mechanized rice and food estate.\u00a0 Other than some of the lands being cleared by pulp and paper producers little has happened yet.<\/p>\n
Presidents get locked into the rhetoric of supporting local farmers, i.e. self-sufficiency, as well as keeping rice affordable.\u00a0 Often these two priorities are at loggerheads, especially if weather (El Nino) or insects get the upper hand.\u00a0 But its in the Indonesia\u2019s DNA to keep both going at the same time. \u00a0 Every leader knows their political future is tied –in large measure– to rice.\u00a0 Instead of embracing trade the country often inhibits it.<\/p>\n
Food security and affordabillity rather than self-sufficiency should be the priority. Indonesian leaders should be more truthful with their constituency.\u00a0 Indonesia resides in a part of the world where several countries regularly have a rice surplus (Thailand, Vietnam, India).\u00a0 Although the US no longer subsidizes rice sales to Indonesia, its always available as a supplier.\u00a0 Indonesia\u2019s rice security is assured. With its implication for many other products, the issue does not have to be the nationalistic political football it has become.<\/p>\n
by Wayne Forrest<\/p>\n
(The writer\u2019s opinions do not necessarily reflect those of the American Indonesian Chamber of Commerce or its members)<\/em><\/p>\n [\/fusion_text][\/fusion_builder_column][\/fusion_builder_row][\/fusion_builder_container]<\/p>\n","protected":false},"excerpt":{"rendered":" [fusion_builder_container hundred_percent=”no” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” overlay_color=”” video_preview_image=”” border_size=”” border_color=”” border_style=”solid” padding_top=”” padding_bottom=”” padding_left=”” […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"elementor_theme","format":"standard","meta":{"footnotes":""},"categories":[23,7,11,64,62,67,1],"tags":[],"class_list":["post-1793","post","type-post","status-publish","format-standard","hentry","category-aicc","category-american-indonesian-chamber-of-commerce","category-indonesia","category-indonesian-law","category-nationalism","category-rice","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/aiccusa.org\/index.php?rest_route=\/wp\/v2\/posts\/1793","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/aiccusa.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/aiccusa.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/aiccusa.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/aiccusa.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1793"}],"version-history":[{"count":2,"href":"https:\/\/aiccusa.org\/index.php?rest_route=\/wp\/v2\/posts\/1793\/revisions"}],"predecessor-version":[{"id":1795,"href":"https:\/\/aiccusa.org\/index.php?rest_route=\/wp\/v2\/posts\/1793\/revisions\/1795"}],"wp:attachment":[{"href":"https:\/\/aiccusa.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1793"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/aiccusa.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1793"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/aiccusa.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1793"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}