Asia Times: Indonesia to raise import duty on rice



	March 10, 2000	atimes.com

Southeast Asia

Indonesia to raise import duty on rice

JAKARTA - The Indonesian government plans to raise the import duty on rice to 45-50 percent from the current 30 percent to cope with imported rice on the domestic market.

Agriculture Minister M Prakosa said his office had proposed the increase in the hope that the amount of imported rice would be reduced. Now that domestic rice was of good quality, the ministry deemed it necessary to protect rice farmers' interests by raising the import duty later this month, he said.

The minister said the decision was taken to raise the import duty after studying relevant parameters, such as the rupiah exchange rate and the global rice price.

Under the Letter of Intent signed by the government and the International Monetary Fund (IMF), the import duty on rice was set at Rp430 (5.8 US cents), or equal to 30 percent, as of last January. The provision could only be reviewed next August but under the existing circumstances the import duty may be raised next month, Prakosa said.

''We look at developments in the field before deciding to raise the import duty to protect our farmers' interests. If a policy is difficult to implement, it is not wrong to review it,'' he said.

Asked why the import duty was not raised to 65 percent as requested by the Indonesian Farmers' Association, he said that to do so, the global rice price must be below US$190 per metric ton and the rupiah's exchange rate less than Rp7,000 per US dollar. Rice is now priced at US$193 per metric ton in the global market, while the rupiah's exchange rate on Wednesday was Rp7,400 per dollar.

(Asia Pulse/Antara)

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