Wednesday, December 28, 2005

The Politics of Rice 6

(Crossposted at Cafe Salemba)

Again, another misleading headlines (here's the other). Kompas writes (in Bahasa): "Rice Stock Sufficient -- Prices Skyrocketting in Some Regions". What a contradiction. But let's play no more semantics. (But oh, I can't help it: the way I read it is, rice stock is enough, but there's shortage in the market, because the price has been wronged and it frees itself in some regions).

Instead, let's look at the content. Business association now worries that some people might abuse the import. Well, it's no surprise. Researcher from Kadin says "the number of 'deficit farmers' outweights the number of 'surplus farmers'". Be not confused by those terms. It's only another way of saying "in aggregate, our farmers are consumers" As a consequence, lower price is good.

This passage says it all (liberally translated):
A number of farmers in Kecamatan Adipala and Maos, Kabupaten Cilacap, complain the increasing price of rice.
Why is it so difficult to understand this?

Remove import ban. Allow everybody to import. Don't take peasants' rights to buy cheap rice.

Wednesday, December 14, 2005

The Politics of Rice 5

[Crossposted at CafeSalemba]

Kompas today has a report with a subheader: "It's a like a rat dying in a rice warehouse". This is an old saying Indonesians use to express the irony of someone's inability to make use of generous opportunity; or when someone is prevented to do what's best for him/her.

The saying applies to Indonesian peasants. The article reports that majority of the recipients of "raskin" ("rice for the poor" -- a government program that gives rice to poor families at price significantly lower than the market price). Why the irony? Because those peasants produces rice. Yet they have to buy rice. This is just another way to say that the poor peasants are net consumers.

Question: 1) For net consumers, which is better: higher or lower price? 2) Does import increase or decrease domestic price? 3) Is it good to give import license to only ONE company?

If you read my previous posts you surely know what my answers would be. Yes, higher price might stimulate increase in employment. But see my previous post citing a study by Warr. Yes, it's good to remove import ban. But giving a sole authority to Bulog is not. Allow everybody to import. If only Bulog can import, the effect is the same with quota. Every economics student knows that's bad.

Monday, December 05, 2005


Finally, the undecisive president announced his cabinet reshuffle an hour ago. He has appointed Budiono as the new Coordinating Minister for Economic Affairs and Sri Mulyani Indrawati as the Finance Minister. The rest of the speech was a joke.

Slow... what?

One thing that I like from this country is, we love to create terms. No matter how foolish it is, as long as you say it first, you'll be known forever and get credits from the press. And here comes, the ... SLOWFLATION... Oh my God...

Not long ago, the President himself "invented" his own toy word: BIGBANG. Well, it's not like, he's the one who invented the word. Physicists did, long long time ago. But, our beloved president, SBY is the one who thinks he can use the term to refer to, well, persons!

And here's the best part: everybody starts using the terms! ("everybody" being the operative word. Meaning, google up yourself -- it's everywhere).

I remember, once upon a time, some Indonesian started using the term "QUO VADIS ----?" in his article. And then, kaboom, hundreds and hundreds of articles use that term, no matter how unnecessary it is.

Ever heard this term: LATAH?