Indonesia aims to boost rice production by 5 percent annually, its chief economics minister Hatta Rajasa said on Wednesday, as the country aims to improve food security and dampen food inflation. Surging food prices, led by rice and chillies, helped drive January inflation to a 21-month high, though food prices are seen easing this month as local harvests start.
"We will work with regional governments to maintain national rice production. We will make efforts for rice production to grow about 5 percent annually," said Rajasa, adding the state procurement agency Bulog should also maintain rice stocks at 1.5-2 million tonnes to stabilise prices.
The World Bank on Wednesday revised down its forecast for the country's 2011 inflation to 6.3 percent, from 6.4 percent previously, seeing inflation slowing in the second quarter after the harvests. Indonesia's central bank deputy governor Hartadi A. Sarwono said he saw monthly inflation in March easing because of declining food prices, though annual inflation could still be high after February's 6.84 percent. The central bank targets inflation at between 4-6 percent by the year-end.
High food prices could still hurt the country's growth - which the World Bank said could reach 6.4 percent this year - and policymakers worry they could cause social unrest. "Inflation has a direct impact to social peace," said Vice President Boediono during a meeting of policymakers on inflation on Wednesday.
The government has said it wants to be self-sufficient in rice by increasing output to 75.7 million tonnes by 2014 by improving yields and boosting planted areas, including with a plan to open up 2 million hectares of land from now until 2014. Indonesia expects to produce 67.31 million tonnes of unmilled grain this year, its statistics bureau said in its first forecast. This would be up from 66.41 million tonnes in 2010.
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