HET Policy of Rice Eliminates Milling Enterprises

INDUSTRY.co.id - Jakarta - Agriculture observer Khudori considers that the policy of Highest Retail Price (HET) of rice has eliminated the milling business amid high rice price volatility.

"With HET, the hardest hit is the milling industry besides the farmers," he said in a discussion of Center for Food and Agricultural Research (Pataka) entitled "Easy to Play Food Data" in Jakarta, Thursday (18/1/2018)

Khudori who is also Member of Working Group of Experts of Food Security Council said that the milling business actors must recalculate the profit and loss due to the policy implemented on September 18, 2017.

Because the milling business should think again to grind medium rice amid the high price of grain.

"With HET, they have to recalculate the potential for losses.The high price of grain is not good for medium rice," he said.

The policy, Khudori said, is likely to be used by the milling business to produce rice as it is and sell for premium rice, thus exacerbating rice price volatility.

"Perhaps that is also why the high rice phenomenon happens," said Het, gradually eliminating the mills from the market.

Rice price volatility, he said, will also be affected by the transition of grants of raskin and rastra to direct cash assistance to 15.5 million in poor households.

"Now they accept it in the form of money, this could be adding to price escalation and very likely to be the cause of high food prices," he said.

Khudori said the phenomenon of rice price volatility is not new in Indonesia because it keeps repeating itself. He said that although macro rice turmoil has not significant effect on inflation, price stabilization is absolutely necessary.

"Stabilization will be successful if there is upstream to downstream integration," he reminded. (Ant)