According to Indonesian government officials, it is common knowledge that the agricultural ministry regularly overstates its rice harvest data to receive higher government subsidies every year. However, the most recent inflated figures could actually damage the local market by bringing about a devastating shortage of the staple food source in the upcoming months.
Indonesia is the world’s third largest producer of rice and is expected to have its rice output increase by 7% this year despite bigger exporting countries such as Thailand cutting harvest estimates.
Research conducted at the Bogor Institute of Agriculture found that the official figures for rice output in 2015 were, on average, about 20% higher than the estimated figures from the U.S. Department of Agriculture which serves as the global benchmark for crop forecasts. The finding from this research is quite significant because Indonesia is the only country with such a great disparity between the numbers.
The USDA’s conservative estimates of 36.3 million tonnes of milled rice, a 2% decrease from the previous year, is a far cry from the official government figures of 47.2 million tonnes.
Overstated Rice Numbers Could Lead to Food Shortage
Many critics of the agriculture ministry argue that the numbers were blatant lies because if they were indeed true, the country would be overflowing with rice. However, that was not the case.
A senior government official, who commented anonymously on this sensitive issue, revealed that they were currently “scrambling” to gather up supplies just in case the “real” harvest amount is much lower than the official figures.
The same respondent also added that if the manufactured numbers were in fact a reality then there wouldn’t be enough warehouses in the country to store the rice. However, that is not the case here.
Just last month, Indonesia faced a shortage of rice so severe that they had to resort to importing rice from neighboring Thailand and Vietnam to keep the local rice price stable.
In spite of the quick actions taken by the central government, local rice prices still climbs sharply in 2015 as shortages were discovered and imports proved insufficient. This led to the record high level of imports, the likes of which most experts wouldn’t associate the world’s third largest producer of rice with.
Reports state that Indonesia has already imported over 800,000 tonnes of rice just in the period between the fourth quarter and mid-January, with an extra 600,000 on its way. Indonesia is reaching out to rice producers outside ASEAN as well and is in talks with sellers from Pakistan and India to procure more rice possibly at a cheaper rate.
Indonesia Corruption to Blame?
The very same official also commented on the reasons believed to have kept this practice ongoing. According to the respondent, there were some clear intentions behind the manipulation of the figures, referring to the prevalent corruption the country is facing.
One of the main reasons to report false numbers was to attract central government subsidies and fertilizer subsidies that are based on production. Larger reported production levels will lead to an increase in the amount subsidized.
A quick comparison of the amount of subsidies show that this is indeed the main incentive in doing so. The agriculture industry’s budget allocation in 2016 is about US$2.17 billion, an increase of 60% from its 2011’s figure of US$1.35 billion.
Officials at the agricultural ministry voiced adamant denials about manipulation of numbers, saying that the rumors revolving around the manufactured numbers from the ministry were groundless.