|
Rice should be treated as quasi-public good, hence the government should subsidize rice farmers directly such as setting floor price. Floor price of is still an important instrument for protecting paddy farmers from low price in peak harvesting season. Levels of subsidy depend on level of floor price set and market clearing price of GKP (dry paddy) during the seasons. The seasons are divided into three semesters according to harvesting period not three semesters used by CBS (Central Bureau of Statistics). The forecasting market clearing price and level of floor price set, is used to calculate government subsidy. When the floor price set is too high, it will be difficult to be implemented for a year round and costly. It is suggested that Dolog/sub-Dolog and KUD (cooperatives) have to be involved directly to buy paddy (GKP) from the farmers. In the short run, they have to improve local personals to handle paddy rather than rice. Local cooperatives and sub-Dologs should have dryers to improve rice quality and reduce lost. This policy has to be hand in hand for an effective implementation of import tariff of rice. |
