Indonesia Expat

Indonesian Rice Prices Double Global Average

Village in Bali Returns to Agriculture

Buying rice in Indonesia is over double the international standard price, despite the country being a major rice producer, the United Nation’s food safety agency Food and Agriculture Organisation (FAO) has found.

Last year, Indonesia’s rice price was around US$1 per kilogram, while the international standard had it around US$0.4 per kilogram.

As of March this year, FAO recorded the average price of rice per kilogram in Indonesia at around US$0.79. This is one of the highest figures around the region, with other ASEAN members paying far less — Cambodia pays US$0.42 per kg, Thailand pays US$0.33 per kg, Vietnam pays US$0.31 and just US$0.28 per kg in Myanmar.

Chairman of the national rice association (KPPB) Soetarto Alimoeso said the dominant cause of high prices in Indonesia is the excessive use of fertilisers which can lead to overdosing of the crops.

Soetarto pointed to a case of excessive fertiliser usage in Karawang, West Java, where each hectare of paddy field was given 500 kgs of fertilizer. The ideal dosage is 300 kgs per hectare, he said. Excessive usage leads to high prices for consumers as producers pass on costs.

“It’s a common misunderstanding among farmers that more fertiliser means better rice. On the contrary, we actually just need a proportional dosage of fertilizer to foster the growth of rice,” Soetarto said, as quoted by Detik.

Soetarto compared Indonesia with other producers among ASEAN members, such as Thailand and Vietnam, which heavily control the use of fertilisers. On average, Thai and Vietnamese producers use 90 percent less than Indonesian farmers.

Limited space is also a factor contributing to high prices, with growers in Indonesia harvesting on average 0.3 hectares compared to two hectares in Vietnam or Thailand.

Indonesian farmers are largely cultivators but not landowners, with farmers raising prices to pay rent.

“Though there is not much gap in the advancement of rice cultivating technology between Indonesia and other ASEAN rice producing countries, our rice price is higher due to the limited amount of field owned by our farmers,” Soetarto said.

See: Is Indonesia Really Free From A Food Crisis?

Image credits: Jubi

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