According to the United Nation’s food safety agency Food and Agriculture Organisation (FAO) findings, price of rice in Indonesia is almost double the standard international price, despite the country being a major rice producer. Last year, Indonesia’s rice price was around US$1 per kilogram, while the international average was around US$0.4 per kilogram. FAO recorded the average price of rice per kilogram in Indonesia at around US$0.79 as of March this year, which is one of the highest figures around the region. The other ASEAN members pay far less. For example Cambodia pays US$0.42 per kg, Thailand pays US$0.33 per kg, Vietnam pays US$0.31 and Myanmar pays just US$0.28 per kg.
The unusually high prices of rice in Indonesia are attributed to the excessive use of fertilisers. According to the Chairman of the National Rice Association Mr. Soetarto Alimoeso, high dose of fertiliser can lead to overdosing of the crops and also jacks up the cost. He drew attention to a case of excessive use of fertiliser in Karawang, West Java, where each hectare of paddy field was given 500 kgs of fertiliser whereas the ideal dosage is 300 kgs per hectare. Excessive usage leads to high prices for consumers as producers pass on costs. “It’s a common misunderstanding among farmers that more fertiliser means better rice. On the contrary, we actually just need a proportional dosage of fertilizer to foster the growth of rice,” Soetarto explained. Thai and Vietnamese rice producers, on average, use 90 % less fertilisers than Indonesian farmers.
Moreover small cultivation land holdings are also a factor contributing to high prices in Indonesia, with growers harvesting an average of 0.3 hectares compared to two hectares in Vietnam or Thailand. Indonesian farmers are largely cultivators and not landowners which is why the farmers raise prices as they have to pay rent. Mr. Soetarto clarified, “Though there is not much gap in the advancement of rice cultivating technology between Indonesia and other ASEAN rice producing countries, our rice price is higher due to the limited amount of field owned by our farmers.”