In a national newspaper today, the general director of Bulog -- Indonesian state-owned enterprise responsible for rice stock and distribution -- warns not to remove rice import ban. (By this he actually means: don't let anybody but Bulog to import rice. Yes, the law actually assigns Bulog as the only entity allowed to make import). His argument is typical: to protect farmers' income.
He is wrong.
Most of Indonesian paddy "farmers" are actually working peasants who don't own even slightest peace of paddy land. They are pure labors. But they eat rice. In other words, in general, Indonesian farmers are net consumers. Guess who gets hurt when rice price is artificially higher than market equlibrium price? Consumers.
In fact, the same general director says that Bulog is pessimistic that it can meet domestic demand for rice. They don't have enough stock after end of this year. Here comes the silliest part: he blames the shortage on smuggling out. Somebody should explain to this guy, what causes smuggling in the first place.
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