Questioning the discourse on the subsidy of the price of unhusked rice for farmers

Palembang (medialnews) –
In response to this controversy, there has been a recent rhetoric that fertilizer subsidies are diverted to the price of farmers’ unhusked rice.

The Ministry of Agriculture plans to provide assistance to farmers in the form of subsidized prices for unhulled rice and rice in order to maintain purchasing power. However, farmers need more certainty about absorbing unhulled rice or rice at prices above production costs.

The harvest season in March-April 2021 in several rice fields in South Sumatra is not as good as before. Not only did their productivity decline, but the farmers were also forced to bite their fingers because the price of unhulled rice fell from IDR 4,000 IDR 4,500 per kg to IDR 3,600 IDR 3,500 per kg.

Wawan Darmawan, a farmer from Sumber Mulya Village, Muara Telang District, Banyuasin Regency, complained about this condition because the income he received was not commensurate with the cost of production.

“At this price, the selling price of rice is only Rp 7,150 per kg. But if the calculation is calculated, the net is only Rp 7,000 per kg, because there is a cost of renting a speedboat to bring rice to Palembang, ”Wawan said.

The decline in the price of unhulled rice has in fact been felt since the harvest season in December 2020, which fell from IDR 3,800 to IDR 3,600 per kg in the regency which is the largest producer of rice in South Sumatra and the fourth at the national level.

This condition is burdensome for farmers because it is accompanied by a drop in cereal production. Usually, Wawan produces 5-6 tons of unhulled dry ground rice (GKG) per hectare (Ha), now only 3 tons of GKG due to lack of fertilization.

Wawan admitted that he had given only two bags of urea fertilizer (per bag of fertilizer = 50 kg) for the one hectare land due to difficulties in obtaining subsidized fertilizers and the soaring prices for commercial fertilizers. You need 4 bags of urea, 2 bags of SP-36 fertilizer and 2 bags of Phonska fertilizer.

As a result, with a yield of 56 to 60 percent, this time the crop produced only 1.8 tonnes of rice on 1 hectare of land.

It is ironic, on the one hand, that farmers are urged to increase agricultural production, but on the other hand, it seems that they do not take improving the welfare of farmers seriously.

Ilham, a rice farmer from Hamlet 3, Muara Dua Village, Pemulutan District, Ogan Ilir Regency, South Sumatra, also complained about the problem of falling grain prices.

The price of unhulled rice in April 2021 was only IDR 3,200 per kg, although during the harvest season of December 2020 it was still IDR 3,600 per kg.

Under these conditions, it is hoped that the problems facing farmers will gain the attention of the government.

Ilham details, currently, at least farmers need Rs 10 million in capital to cultivate 1 hectare of land which is used for the cost of renting agricultural machinery, purchasing seeds and fertilizer as well as wages. for post-harvest activities, etc.

Meanwhile, the income from the production of 6 tonnes of GKG / Ha which produced 3.5 tonnes of rice (yield 56 percent) was not comparable. With a price of IDR 7,000 / kg, you only get IDR 24,500,000.

After deducting the cost of production of Rs 10 million, farmers only get a net income of Rs 14,500,000. And, if it is distributed 100 days (one planting period), farmers earn only IDR 145,000 per day.

The drop in the price of unhulled rice was immediately reflected in the farmer’s exchange rate (PNT). Based on data from the Central Statistics Agency of South Sumatra, it is known that the NTP index in December 2020 was only 97.71 or did not reach 100, while in November 2020 it was reached an index of 99.05.

“If the NTP index does not reach 100, it means the farmers are losing,” said BPS chief Sumsel Endang Tri Wahyuningsih.

During the March 2021 harvest season, the NTP rice index also fell to just 97.14. This condition is inversely proportional to the PNT of the plantations and livestock sector, which was able to record an index greater than 100.

Defer the sale

Regarding the condition of the falling prices of unhulled rice, the provincial government of South Sumatra has advised farmers to postpone the sale of their produce.

South Sumatra Province Agriculture, Food Crops and Horticulture Department Chief Raden Bambang Pramono said that even though farmers are forced to sell their unhulled rice, it is recommended not to satisfy their daily needs.

Currently, the price of unhulled rice is falling, which is far from the government purchase price (HPP). The reason is that there is an increase in rice production due to the simultaneous harvests in a number of regions.

However, the government continues to make efforts to stabilize the price of unhulled rice, including by improving post-harvest governance.

Based on 2020 statistics, South Sumatra’s unhulled rice production reached 2.71 million tonnes, or 1.47 tonnes of rice.

Meanwhile, for an annual consumption with a population of 8.24 million inhabitants, it requires only 850,000 tonnes of rice per year or a surplus of around 900,000 tonnes of rice. As for the harvest projected until April 2021, it is estimated that farmers’ production will reach 774 thousand tons of GKG or the equivalent of 400 thousand tons of rice.

According to records, South Sumatra is the third highest in Indonesia for the uptake of unhulled rice, and on March 22, 2021, the uptake of Bulog reached 15 thousand tons of rice.

The government realizes that it cannot fully rely on the absorption of the Logistics Agency (Bulog) given the high agricultural production in this harvest season.

Bulog certainly has a limited budget in this regard. Despite this, the provincial government is still targeting Bulog to absorb 80,000 tonnes of rice for the two 2021 planting seasons in South Sumatra.

Bulog South Sumatra regional division chief and Babel Ali Ahmad Najih said the South Sumatran provincial government has asked Bulog to absorb 50,000 tonnes of farm rice by May 2021. Optimistic that unhulled rice can be achieved because every day it is able to absorb 700 tonnes of rice from farmers in various regions.


South Sumatran Governor Herman Deru said falling prices for unhulled rice was one of the many problems facing South Sumatra’s agricultural sector, which pursues a production target of 3.1 million tonnes of GKG by 2021.

Other issues that have also been in the spotlight are the distribution of subsidized fertilizers, uneven agricultural infrastructure, etc. losses Rice production (losses) is quite high, reaching 11 percent.

With these various problems, so far South Sumatra has not been able to increase land productivity. Farmers produce on average 5.9 tons of GKG per hectare, while in Java it reached 9 tons of GKG per hectare. Even the neighboring province, Lampung, can already get 7 tonnes of GKG per hectare.

According to him, to help farmers, more extreme innovations must be carried out. The subsidy should not be fertilized, but rather the price of grain so that farmers have the entrepreneurial spirit. Don’t become coolies in their own country.

Currently, with a rice PPH of Rp. 8,500 per kg, farmers only receive a gross income of Rp 30 million in 100 days (one planting season).

Even sadder is the fact that when the HPP for unhusked rice is set, for example Rp.5,300 per kg, the market price is only Rp.3,000 per kg, and when the HPP for rice is Rp.8,300 per kg. kg, the market price of rice is Rp 7,000 per kg.

“There is no other way but to increase the productivity of land to increase the incomes of farmers. However, this effort is not easy as it is accepted that agricultural management in South Sumatra does is not as good as in Java, “Herman said.

Governor of South Sumatra Herman Deru. (medialnews / Dolly Rosana / 21)

Likewise, IV DPR Commission member RI Riezky Aprilia said that subsidies to farmers should be given at the price of grain because direct government assistance is difficult to reach all farmers.

“In fact, in Commission IV, we considered stopping the fertilizer subsidy program,” he said.

The constituency representative of South Sumatra Province believes that with a budget of Rs 33 trillion, subsidized fertilizer should no longer be a problem for farmers. However, what happened was the opposite, the scarcity of fertilizers was still happening.

South Sumatra in 2020 will rank fifth for national cereal production, namely 2.6 million tonnes GKG, or still below South Sulawesi with 4.6 million tonnes GKG, West Java 9.0 million tonnes of GKG, Central Java 9.6 million tonnes of GKG and East Java 9.9 million tonnes of GKG.

With a target of 3.1 million tonnes of GKG in 2021, that means South Sumatra needs to add around 400,000 tonnes of GKG due to production in 2020.

It is quite interesting to observe the concept of subsidies to farmers applied by other producing countries like Vietnam and Thailand.

Both countries provide subsidies on the production side, in which the government buys rice from farmers at a benchmark price plus a subsidized value.

With the benchmark price plus post-harvest subsidies, the price of rice in both countries is relatively stable. In addition to being supported by lower production costs.

Meanwhile, Indonesia adheres to the concept of input subsidies, or in other words, the government grants subsidies for fertilizers and seeds.

The vice president of the Indonesian Farmers Association (HKTI) in South Sumatra Province Zain Ismed said his organization is very supportive if subsidies to farmers are given on the production side as long as it exactly matches to the goal.

HKTI believes that so far, subsidies for fertilizers, seeds and agricultural machine tools (alsintan) have not reached all farmers due to limited budget allocations.

However, HKTI also disagrees whether farmers receive direct cash assistance (BLT) because there are concerns that it will be used for consumption needs.

The price of unhulled rice is actually only natural, as the same conditions also exist for coffee, oil palm and secondary crops at harvest.

Most importantly, how to make agricultural governance more effective so that farmers do not become coolies on their own land.

Farmers are expected to be independent and not dependent on subsidies, but the point is that this remains difficult to achieve. If the subsidy on the input side has less impact, why not try to subsidize the price of unhulled rice?
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By Dolly Rosana
Editor: Royke Sinaga

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