The Politics of Rice 26

It's been a while. But in that a while, you could have amused yourselves with lots of media coverage on the alleged corruption in, again, Bulog.

Just one day before the first news broke up, one student came to me. She was furious at my liking the decision to import rice. But I made her convinced that while I'm all for rice market liberalization, I never like the idea of giving a monopoly to Bulog.

Dissolve Bulog.

The Politics of Rice 25

The police seems to get it. But Kompas? Not really. A headline today reads, "The Police Caught Rice Speculators". That gives an impression that rice speculation is a crime (how about those guys speculation in the stock exchange, Sir?).

But if you read through, apparently the police's reason is different. What they are after is cheaters, not speculators. There are people who buy rice from Bulog at subsidized price and sell it to other with higher price (this is 'speculation', and I don't think is a crime) and replace the label as to hide that it is from Bulog (this is the cheating -- a crime).

Remember the fuel-kerosene cases? Yes, the story is similar. You should not punish me for buying subsidized Pertamina fuel, stocking up, and selling it at higher price. But when I mix it with kerosene and tell you that it is the same fuel you can buy at the gas station, I lie to you. I cheat. Punish me for that.

The Politics of Rice 24

According to Bustanul Arifin, if the Indonesian national socio-economic survey (the Susenas) is conducted and if the poor are sampled, most likely the poverty number will increase (supposedly due to the increase in rice price), a condition that worries the government.

I too believe that the absolute poverty is likely to increase -- the late harvest would not be able to compensate for the skyrocketing rice price.

But what strikes me is the fact that Bustanul implies that there is a possibility that the poor will not get sampled in the Susenas. That is ridiculous. Is he saying that you can actually exclude the poor from such survey?

The Politics of Rice 23

Aha, Kompas finally believes that the domestic rice supply is short. That's one step in the right direction.

I am not surprised that they are surprised.

The Politics of Rice 22

So now they blame it on hoarders and speculators. Said newspapers, those who buy and stock up cheap rice for profit reason should be taken into jail.

I say bullsh*it.

Everybody should be free to buy anything he wants. Yes, you say the law prohibits stocking up of 'basic necessities'. Well, even that law is ridiculous.

Of course it seems unfair that in the midst of high demand, some people use the opportunity to make more profit. But, hey, that is the very nature of entrepreneurship. You give a bad name to 'speculation', but 'speculation' is what you do in business. Only good speculators ace in business.

Government, don't listen to those liars. If you want to discourage stocking up, create competition. Open up. Imported rice will do the job. Not prison bars.

The Politics of Rice 21

Finally Kompas admits that rice import is necessary.

But, not surprisingly, Kompas goes on with its apologetic tone: "As long as it is supported by accurate data, importing rice is justified".

This argument has been used as well by economists who love export but hate import. Only if you notice, these are the people who always say that there is no reliable data on rice production. Yet, they argue using data from god knows where.

So, how can you justify a policy basing on data that are not reliable?

Paraphrasing their arguments, it goes like this:

1. Import is OK
2. As long as the domestic supply is really short, relative to the domestic demand
3. To be sure on # 2, look at the data on production
4. But be careful, because no data is to be trusted
5. So do not import
6. Or import...
7. As long as the production data is accurate

What is it they are really trying to say?

My suggestion, if you don't trust data, trash them. If, as you say, production data are all lies, use price as indicator. What does high price tell you? Supply is short. What's so damn difficult?

The Politics of Rice 20

So, now they panic with the very high price of rice. You've been warned, dear, you've been warned.

It's amazing that those who oppose rice market liberalization are still making empty rhetorics. You can say anything using fancy terms like 'agricultural revitalization' and all that. But as long as you distort the price, nothing will change.

Now I'm amused that people care about the skyrocketing rice price. I thought you want higher and higher price 'to help farmers'? Siswono, you happy now? Well, I guess you just don't care about Tarsemi, Darti and others.

By the way, I agree that the productivity issue should be addressed. Yes, but also, unleash the market. That way, you can see if you want to be productive or not. As I like to say, double productivity with double price means nothing.

And once again, I'm not a Bulog defender! No.

The Politics of Rice 19

"Importing rice is a very easy thing to do, but that is too simplistic, it can't attack the root of the problem of poverty in Indonesia".

That is the song the week.

Why is it if something is easy, we should go for the difficult ones? Welcome to the if-you-can-make-it-difficult-why-make-it-easy society.