Thursday, January 05, 2006

The Politics of Rice 7

I'm tired of doing this. But I have to, 'cause too many people are misled by politicians and rent-seekers. (This one is not cross-posted at Cafe Salemba anymore -- I don't want to spoil the party there with too much of my "political" view).

Read this article from Kompas. Also, this editorial and this opinion in the same newspaper. Among all, it is reported that:
  • Farmers refuse to sell rice to Bulog, "not due to shortage, but the price is not good".
  • Even though the price is high, West Jave governor refuses importation.
  • South Sumatra governor says, the price in his region is abnormally high, because the region is a surplus area (I hear you laughing).
Other newspapers have the same non-sensical accounts (not to mention confusing statements from the government, especially Minister of Agriculture).

Honestly, I never thought that lack of understanding of the role of price can have this big of impact on the way people think.

It's obvious. If you are free to import, do you want to do that for a loss? If you are about to sell, do you want lower price? If you are buyer, do you like higher price? You say, this is political. Nothing is political about the nature of price -- it's common sense.

It's also obvious. The government created Bulog to "help" the farmers. The farmers don't want to sell to Bulog. This is just another way of saying that Bulog is useless. Dissolve it.

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