Indonesia drafts bill to 'privatize' BULOG

by Emily Wilson
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JAKARTA, INDONESIA — The Indonesian State Logistics Agency, BULOG, has drafted a bill to "privatize" the agency, according to a recent report from the U.S. agricultural attaché in Jakarta. If the bill is approved, the new STE, which the government plans to call Perum Pangan, would come into effect Jan. 1, 2003.

Implementation, which awaits approval by Indonesia’s President Megawati Soekarnoputri, would change the agency into a State Trading Enterprise (STE), so it may trade agricultural commodities for profit. However, the new STE will retain its mission of maintaining and stabilizing the producer price for rice.

Industry sources say government officials strongly support the "privatization" of BULOG because the government cannot afford to continue subsidizing its operations. BULOG has nearly 1,600 rice warehouses throughout Indonesia with a total capacity of 4 million tonnes.

BULOG imports of rice account for approximately one-third (1 million tonnes) of total rice imports for Indonesia.

Perum Pagan would be coordinated under the State Ministry for State Owned Enterprises, instead of the agriculture ministry.

The current BULOG chief reportedly stated plans for developing an online real-time information network, which will be connected to all BULOG warehouses and offices, to monitor total rice stocks on a daily basis.

In addition, he plans to have an online system for financial reporting that will be open to the public.