INTRODUCTION

Rice is one of the world's most important staple food products of the Indonesian people.
This statement is particularly applicable to the Asian continent where rice forms the main staple
food for the majority of the population Rice is a strategic commodity for Indonesia, not only as
the main staple food for the majority of Indonesians, but is also the most important commodity
for the country. Indonesia is one of the largest rice producing country in the world. The largest
rice producing countries are found in Asia. The table below lists the five largest rice producing
countries.
World's Top Five Rice Producers in 2012:
1. China

204,285,000

2. India

152,600,000

3. Indonesia

69,045,141

4. Vietnam

43,661,569

5. Thailand

37,800,000
Source: FAO

The data show how Indonesia has the power in an agricultural field, with the increasing
number of rice production is generated it will be directly proportional to the production of rice
will be produced. Although Indonesia is the third-largest country regarding global rice
production, it is still a rice importer. In fact, Indonesia has the largest per capita rice consumption
in the world with Indonesians consuming around 140 kilogram of rice per person per year.
Indonesia as one of the countries that are building, where 50 percents populated live in
the agricultural sector. So naturally if the agricultural sector is always seated on the priority
main. The agricultural sector is also a source of life for the majority of the population. The size
of rice production would affect the contribution the agricultural sector to Gross Domestic
Product (GDP).
Since rice is the staple food for most the Indonesian people and has become a strategic
commodity, the Indonesian government has made intervention to domestic market in order to
meet a domestic demand, to stabilize price of rice, and to make serious effects to get out of rice
import dependency. There are some impacts on the rice import. One of them is the effect on the
1

welfare of farmers and food security national. We need to make a change in development
strategy economy to improve the quality, quantity, and continuity of production because
agriculture is a sector which has great potential in supporting the development of the nation.

PHENOMENON AND PROBLEMS

Agriculture sector has been playing an important role in Indonesian economy. Rice is one
of key agriculture commodities. More than 10.1 percent of Indonesian income is spent on foodgrain commodities within 2002-2009. According to Malian et al. (2004), that import demand
function of rice besides influenced by national income and price, even was influenced by total
domestic production of rice. But the devastating impact of El Nio has forced the government to
import rice from neighboring countries as prolonged drought has caused harvest failures in
several rice producing regions, Vice President Jusuf Kalla said.
The State Logistics Agency (Bulog) was currently in the process of purchasing around
1.5 million tons of rice from Thailand and Vietnam following concern on rising prices of the
staple food that could cause social unrest. President Director Sutarto Alimoeso said rice imports
were unavoidable because Bulogs inventory had declined sharply after the government needed
to provide more rice for the poor after the recent fuel increases. He said rice imports were also
necessary because of the lower than expected unhusked rice production this year, which was
expected to increase only 0.31 percent to 69.27 million tons due to weather. The government is
forced to import because of the drought. They are taking this rice issues very seriously. As we
know, Indonesia is the worlds third-biggest consumer of rice after China and India, with rice
production expected to be below the 45 million tons targeted for this year.
Many areas in West Java and East Java reported last week rising rice prices by as much as
10 percent due to supply shortages. Low-income people will be the hardest hit by soaring rice
prices as food accounts for around 60 percent of their living costs, while mid- and high-income
consumers only spend 20 percent of their living costs on food. Institute for Development of
Economics and Finance (Indef) has found that several welfare indicators, including food prices,
wages and the unemployment rate, all point to a general suffering resulting from the countrys
sluggish economy, which recently shrank to its slowest level in six years.

Indonesia was self-sufficient in 2008 and 2009, however, it started to import rice to
maintain its reserves in 2010 after a failure in harvest expectations. Shrinking farmland areas and
lower productivity have been regarded as the main factors that determine the countrys
dependence on imports. In order to alleviate a potential food crisis, the government had also
allocated Rp 2 trillion to emergency food funds. The utilization of emergency funds would be
determined by the finance ministry with the coordinating ministry for the economy determining
the criteria of a food emergency crisis. Rice imports have been a thorny issue between the
government and some law makers at the House of Representatives.
Indonesia is agricultural country, but still import rice from other countries. Actually, if we
keep on importing rice from other countries, there will be many bad impacts to our country.
Before that happen, it will be better if the government take a good measure to overcome that
problem.

THEORY
Rice is part of grain that has been separated from the chaff. One of processing stage of
the rice harvest, grain is milled so that grain leather regardless of its contents. Rice is the main
commodity because it consumed by the majority of the Indonesian population. Rice is one of the
nine basic.
Import is the process of transportation of goods from one country to another country
legally, generally in the trade process. Imported products are goods that cannot be produced or
countries that already can be generated, but cannot meet the needs of the people.
Here are the benefits of imports:
1. Meet the needs of the community in the country.
2. State revenues will increase due to foreign exchange.
Rice is a strategic commodity as food for Indonesian society, so that production, supply,
procurement and distribution of rice to be very important in the context of resilience food,
increased income and welfare of farmers, in order the stability of the interests of the general
public consumption.
Until now, the import activity is still carried out by Indonesia, in particular rice imports.
Imported rice is still urgently needed, in order to offset the domestic rice supply and push prices
3

when the harvest has not yet arrived. Imports also showed that each country has the disadvantage
in meeting the needs that must be bought from other countries. Rice imports, including imports
of certain goods are taxable strategic exempt value-added tax (VAT).

METHOD
Method that we use is descriptive method. Descriptive method is a method to describe the
phenomena in our environment, which take place at this time or past time. In this method there is
no manipulation or alteration of the data but can describe the real condition. The aim of
descriptive method is to make description or image of the case in systematic, factual, accurate
about all the fact and the relation between phenomena and how to collect data than will analysis
with all the theory with qualitative approachment.
Base on the case. Indonesia is one of the biggest consumer of rice after China and India,
with rice production expected to be below the forty five million tons targeted for this year. Where
about fifty percent of all population live in agricultural sector. But the fact is so much people
difficult to can eat rice.
The kind of the data that we use is secondary data. The data get from many source, a lot
of them we use data from Food and Agriculture Organization (FAO), The State Logistics Agency
(Bulog), and the others data that related to the case.

ANALYSIS

Spatial Data
In this research, physical characteristics of rice production were explored through land
capability map. The map was derived from a set of Indonesian land system map called
RePPProT (Regional Physical Planning Program for Transmigration) dated 1985 accessible
through BAKOSURTANAL (Indonesian National Coordinating Agency for Surveys and
Mapping). The RePPPRoT map is a reconnaissance-scale (1:250,000) dataset derived from a
combined field survey, aerial photographs and satellite imageries, primarily employed to
support transmigration policies. Physical properties of land used to obtain land capability
were soil (at the level of great soil group), terrain (slope) and average of annual rainfall.
4

Statistical Data Analysis

For time-series analysis, primary data were taken from common sources such as Food
and Agriculture Organization (FAO), International Rice Research Institute (IRRI), Rice
Research Institute of Indonesian Ministry of Agriculture (Balai Penelitian Padi Departemen
Pertanian) and Indonesian Statistical Agency (Badan Pusat Statistik). The FAO databases
which contain demographic data, production, yield, area, price, import, and export of paddy
and also spatial distribution of irrigation networks were employed.
Computation of differences, ratios, and growth was calculated on some variables
based on FAO estimation. In this analysis, the difference in production and consumption was
utilized as a measure of surplus-production, while ratio between production and consumption
was employed as a measure of sufficiency. The growth was employed particularly to explore
production increase due to the release of paddy varieties introduced at the corresponding
time. The estimation of differences, ratios and growth was based on the following equations:

Equation (1) Dxy =X -Y

Equation (2) Rx,y =

X
Y

Equation (3)
where,
Dxy = difference of production (X) and consumption (Y)
Rx,y = ratio between production and consumption
X = growth of variable x on corresponding time lag (between t0 and t1)
Statistical data analysis was employed to understand the relationship among variables
related to paddy production and its productivity, particularly to understand the role of irrigation
and seed inventions to production. Using the Pearson correlation, relationships among of
variables including land use, demographic, production, yield, irrigated area and number of
inventions on rice varieties were investigated. It was assumed that those relationships were
linear. Pearson correlation coefficient was computed using the following equation:

Equation (4)

where
rxy = correlation coefficient between variable x and y
xi or yi = value of variable x or y in sample i, where i = 1, 2, 3,., n
or

= average of variable x or y

To analyse the role of seed inventions on production, yield, and harvested area in
Indonesia, three-year production was averaged and then correlated with the number of paddy
varieties released in the period. Due to insufficient data, this research only concentrated on
lowland and rainfed varieties, although tidal varieties and hybrid varieties have also been
released.

CONCLUSION AND SUGGESTION

From the above discussion regarding the rice import policy conducted by the Indonesian
government, it can be concluded that:
1. Rice imports are the government's strategy to curb inflation and also because of the
shortage of rice to Bulog. Indonesia still not able to meet the food needs in the State it
self.
2. Given this policy is feared Indonesia will lose its credibility as an agricultural country,
the rest of Indonesia wishes to achieve food security will also be more distant from
reality.
Faucet open import policy conducted by the government when the data showed that
Indonesia is experiencing a rice surplus does bring pros and cons. To secure rice stocks, Bulog
should perform better stock management. Bulog must maximize the absorption of rice from local
farmers. This is in addition to securing stocks of rice can also generate revenue for farmers so
6

that the farmers welfare can rise. Bulog should be more aggressive absorb grain from farmers so
that they are not harmed .
Indonesia is agricultural country. but still import rice from other countries. Actually, if
we keep on importing rice from other countries, there will be many bad impacts to our country.
Before that happen, it will be better if the government take a good measure to overcome that
problem. Furthermore, the government is expected to hold market operations to stabilize the
price. This must be balanced with a good stock management.
The government should strongly committed to overcome all the problems in a
comprehensive national rice from upstream to downstream in order not to have to depend on
imports. Based on the exposure of the above problems, we advised the government to pay more
attention especially Bulog and realize better stock management and maximize the absorption of
local rice from local farmers , so that rice stocks can be fine tuned and Indonesian farmers can
also increase their welfare.