17. Obstacles to Achieving Food Security: The Failure of Rice Sector Policy and Its Impact on Peasant Deprivation in the Era of Political Reform in Indonesia

The failure of rice sector policy in the era of democratic political reform in Indonesia is related to the interests of political and business powers backed by International Finance Institutions and developed Western countries. The actors attempted to withhold the liberalization policy because doing so would benefit them. The limited government intervention in the paddy and rice market through the decline of the role and function of the National Food Logistic Agency (BULOG) as Public Service Obligation (PSO) prevented the price stabilization of paddy and rice. Rice traders and distributors were able to control the domestic price market of paddy and rice by creating a high price disparity between the market prices of paddy and rice. The storage of paddy and rice purchased by private rice traders and distributors from peasant producers led to high disparity between domestic and global rice prices. The higher price of domestic rice accompanied with the low-level import tariff made it easier for rice importers to import and access the market. Consequently, the failure of de-liberalization policy resulted in disadvantages for poor people and peasant producers.