Monday, 8 June 2015


Unless the management of BULOG change their strategy in buying farmer’s price, it was not impossible that they would lose the battle against brokers in price controlling. Big private rice milling centers could afford to buy all types of rice from farmers at HPP price and further process the rice into quality as demanded by the market.

If the big rice millers dominated buyings of rice it was feared that they would have the power in rice pricing at national level. This was disclosed by the Chairman of FKPI Forum Suroso Natakusumah on Tuesday (5/5).

When the process of buying by BULOG from farmers was not smooth, Bulog always reasoned that things had changed, or planting season postponed. When the Government released Presidential Decree (Inpres) on Government’s buying price (HPP) it turned out that the price set by the Government was below market price. As the HPP price announced after harvest, Perum BULOG was late in buying race from farmers than private companies (who were price players).

Indicators that Perum BULOG lost the race against private companies in buying farmer’s price was apparent. By end of April 2015 realization of rice procurement at home by BULOG was only less than 500,000 tons of the targeted 2.75 million tons to 3 million tons in 2015. And yet harvest chain was the criteria for Perum Bulog in rice procurement at home when realization of rice procurement by BULOG was more than 60% of target.

It seemed that BULOG was outsmarted by companies in buying farmer’s price BULOG only started to do rice buying after the HPP price was announced by the Government in March 2015; and yet at that time some regions were already having harvest but BULOG had not buy any rice from farmers. That momentum was grabbed by any private rice traders to buy rice from farmers at abobe HPP price.

Chairman of KTNA of the Banten province Oong Syahroni told the press that the new HPP was never benefited by farmers, because price of rice was already above HPP i.e. GKP rice around Rp.4, while in Inpres 5.2015 on Rice HPP was already stipulated at Rp.3,700/kg. Private companies bought unhusked rice from farmers at acceptable price by farmers, rice of 14% water content was also accepted by traders while BULOG buy rice from farmers based on preconditions.

The Regency of Lebak and Pandegalang was the rice barn of the Banten province. During chain harvest in January-March 2015, farmers unhusked rice was rushed by rice mills like in subang, Karawang, Sukabumi etc, as it was not harvest time yet in the respective regions.

Vice chairman of Perum Bulog Jakarta and Banten Fatah Yasin stated that of the targeted rice buying 77,000 tons in 2015 until April 2015 only 8,500 tons in 2015 until April 2015 only 8,500 tons were realized. Operational zone of Perum BULOG Jakarta included Banten and Jakarta, target of rice procurement in 2015 was 77,000 provided or Jakarta 7,000 tons and Banten 70,000 tons.

According to BULOG executive Ahmad Sadikin, although harvested rice was low the gabah kept by farmers still amounted 108,000 tons to be sold and was needed for planting. The gabah stored by farmers was being awaited by Perum Bulog Lebak to be bought for increasing rice procurement. When harvested rice in Lebak and Padeglang ran out, and harvest was on in Karawang, Sugeng etc. rice traders from outside did not do any buying in Lebak and Pandeglang. The resuilt was that price of rice dropped, but still above HPP so Perum BULOG still could not buy.

Similar occurrence was happening in Lampung when target of rice procurement by BULOG Lampung in 2015 was set at 90,000 tons but by end of April 2015 only 18,000 tons was realized or 20%. According to BULOG official Usep Karyana, low realization of rice procurement was due to delayed harvest which normally took place in February 2015 postponed to March 2015. As harvest coincided with heavy rain, water content in rice was more than 14% so farmer’s gabah were more absorbed by the local market. The rice market in Lampung was very open so plenty of gabah wee more absorbed by the local market. The rice market in Lampung was very open so plenty of gabah were sent there.

Various effort would be made to collect rice in 2015 among others to actively visit production centers amd mills, to publise new HPP to BULOG partners and to scheme up program of Integrated Farming involving local Governemnts, Perpadi, and KTNA, seed traders, Fertilizer traders, banks, universities and the Police/Army.

Chairman of KTNA of Lampung provinces Kaslan stated that the harvested rice in Lampung was running out. During harvestime rice Traders from Palembang etc rushed for rice mills. They buy rice at prices above HPP. Hundreds of trucks stood by the ricefields, ready to transport rice to other regions. A condition as such made it difficult for BULOG Lampung to compete against private traders. (SS)                                                                              
Business New - May 8, 2015

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