Ballancing Grain Supply Not Set The Price*

gabah

The Government of Indonesia in so far has set the benchmark purchase price (HPP) of grain by the Government to maintain the stability of rice prices on the market. The government and various other groups consider that this is the right solution to control the price of grain for people at the grass root level so that the price of rice is affordable by all levels of society. It must be admitted, through this HPP mechanism, the price affordability as an indicator of food security can be well maintained. Because of this ability to maintain the prices, in 2016 The Economist (2016) – an international food security rating agency – appreciated Indonesia as the number-one country in the world that was the most successful in making improvements and maintaining food security with a score of 2.7 in line with Myanmar. Indonesia’s achievements in 2016 defeated Britain which won a score of 2.6. Some circles consider that Indonesia’s achievements in 2016 were spectacular, although in general Indonesia’s food security was ranked 71th in the world below Malaysia, Thailand and below Vietnam. The secret of Indonesia’s success is one of which is due to the presence of grain HPP by the Government, so that the price of rice is relatively affordable by all parties.

The gabah (unhulled rice) as well as beras (clean rice) is a strategic commodity needed by many people. In other words, the unhulled rice is a basic need of Indonesian people related to sustainability and existence. Adequacy of rice indicates stability. The absence of rice in a family represents a low social status. Adequacy of rice provides calm. The absence of rice causes anxiety. When the paddy fields turn yellow, it gives pride and calm to a farming family. The pleasure was also felt by BULOG (the owned-Indonesian logistic company), by Agriculture Service, and all ranks who served as “keepers” of food supplies.

Indeed, the price of unhusked rice must remain affordable by various groups of people, not to jump uncontrollably. Daily laborers, public transportation drivers, online motorcycle taxi drivers, on site motorcycle taxi drivers (ojek pangkalan), and various other parties from the grass root level expect that the price of rice is not expensive. When the price of rice feels expensive, people at the grassroots level will be anxious, and even possibly will lead to political riots, or civil disobedience. They will assume that the government has failed to take care of the people due to the price of rice.

 

Becomes a Farmer’s Burden

All parties must agree that the price of rice must be well controlled. There must be no poor families who don’t eat because they can’t afford rice. But why does it have to be with HPP? Isn’t the farm owned by the farmers? Don’t they as citizens have the same rights and obligations as other citizens? If entrepreneurs, craftsmen, and MSMEs are entitled to obtain maximum benefits in a reasonable manner, why are rice farmers covered by HPP to achieve maximum profits? This is a matter of justice. Farmers should be encouraged to obtain reasonable profits so they are interested in continuing to farm, using their land for food production, and not selling their land, and not converting their land.

Now there are many farmers who feel that they are the true subsidy givers for various other parties. This is precisely a barrier for farming interest of educated youth, who see greater income in other sectors. Then, why does this supply of rice have to be borne by farmers; even though we know that their incomes are mediocre, even many of these small farmers live in poverty. Naturally, many parents do not want their children to become farmers, even many parents make a “dividing line” that farming activities only reach them. For the next generation, the parents expect their children not to become a farmer. In addition, these farming activities are dirty, menial work, and low social status.

Some time ago there was an increase in HPP of harvested dry rice and rice based on Minister of Trade Regulation Number 24/2020. Since 2015, the HPP of harvested dry rice was IDR 3700/kg and rice was IDR 7300/kg. Now the HPP has increased to IDR 4200 per kg of harvested dry rice and IDR 8,300 per kg for rice. Of course, this is very pleasant for farmers. In fact, some people judge, this is the wisdom behind Covid-19, where BULOG wants to optimize the uptake of rice from farmers as food reserves in the Covid-19 pandemic. However, this has not been able to negate the impression of injustice, especially for farmers or prospective, economically and profit-oriented farmers.

For the Government, of course, become hesitant in determining the HPP policy. If the Government releases Grain HPP and rice and hands it over the free market mechanism, it is likely to increase farmers’ profits; and it could be that many millennials will be interested in engaging in the agricultural sector. But this will lead to get a rejection from some other communities because this policy itself will increase the price of rice on the market. Furthermore, this will raise the issue of food affordability, which will greatly disrupt food security because of the low income in general of our society.

 

Maintaining Food Supply Balance  

In Siroh Nbawiyyah, the Prophet strictly prohibits the act of limiting prices (tas’ir) for various types of goods, including for staple foods. Whenever someone proposes to the Prophet to limit prices, the Prophet always rejects it. In Siroh Nabawiyyah there are at least two narrations – namely the narration of Ahmad from Anas bin Malik and the history of Abu Daud from Abu Hurairoh – regarding the Prophet’s strict prohibition of price restrictions. But at the same time, the Prophet also forbade the hoarding of goods (ihtikar) which could cause scarcity of goods. Many times the Prophet emphasized this prohibition on hoarding. Therefore, to control prices, the Prophet did not set the HPP but tried to eliminate the distortion of goods traffic, so that a perfect market mechanism would occur.

In addition, for the provision of staple food, the Prophet prepared a state-owned food center, which is fully managed by the state in cooperation with the community. This rearrangement of food supply, the Prophet did after achieving political stability, especially after the relief of the Jewish uprising and the Quraysh group, after the Ahzab War and the Hudaibiyyah Treaty. Recorded in history, the first food centers in the time of the Prophet SAW are food centers located in Wadil Qurro and Fadaq – around Khaibar (Ibn Hisham, 2003). The Prophet manages this state-owned food center through cooperation with Jewish groups through the al-musaqoh partnership scheme, which is a profit-sharing partnership with full paddy-production means from the land owner and the profit sharing is according to the agreement between the two parties.

Through the instrument of food institution prepared, the Prophet SAW controlled the distribution of staple foods sourced from this state-owned food center to the consumer level in a strict and thorough manner. Ibn Hisham (2003) notes, a number of families get a share of Khaibar food products. Among these are: the family of Osama bin Zaid obtained 200 wasaqs; Aqil bin Abu Talib obtained 140 wasaqs; Jakfar’s sons got 50 shares of wasaqs; Rabiah bin Al-Harith obtained 100 wasaqs; As-Shalt bin Markhamah and his two sons received 100 wasaqs; Qais bin Markhamah obtained 30 wasaqs; Abu Al-Qasim bin Markhamah received 40 wasaqs. In fact the Prophet SAW made his testament – and this testament was considered legitimate and implemented by Umar bin Khaththab – that the Rahawiyyīn, Al-Dāriyyī, Al-Shubaiyyn, and Al-Ashariyyn should be obtained, each of 100 wasaqs from Khaibar’s wheat.

On the other hand, the Prophet SAW once distributed state-owned land located in As-Syiqq, Nathah, Al-Katibah (around Khaibar) to Islamic shahabah. Ibn Hisham (2003) revealed, the land was divided into 17 blocks, and each block was divided into 100 lots, which were then distributed to the Muslims. Ibn Hisham (2003) noted, among the shahabah who received fertile agricultural land were: Ali ibn Abi Talib, Az-Zubair bin al-Awwam, Talha ibn Ubaidillah, Umar bin al-Khaththab, Abdurrahman bin Auf, Ashim bin Adhi from Bany Al-Aljan, Usaid bin Al-Hushair, Al-Harith bin al-Khazraj, Na’im, Bani Bayadhah, Bani Ubaidah, Bani Hara from Bani Salimah, Ubaid bin As-Shiham, Saidah, Gifar and Aslam, An-Najjar, Harithah and Aus. Then, the Prophet (SAS) stressed they have to maintain the productivity of the land. If someone owns / controls agricultural land, then is abandoned, then the state can revoke the rights to the land. Then Umar bin Khaththab implemented the Prophet’s Commandments emphatically (Al-Karnni, 2012).

It is also mentioned in the Nabawyyah siroh, that in the time of the Prophet Muhammad in Medina there were individuals who owned agricultural land, such as Usman bin Affan, Muhairiq, and Abu Tholhah. The very famous date garden of Abu Tholhah is Bairuha which is located around the Nabawi mosque in Masdinah. Abu Tholhah was very fond of the date palm garden, although he finally did donated the garden after the descent of the Letter Ali-Imran Verse 92, which states: “You will never arrive at good (perfect), before you spend a part of the treasure that you love …” That is, the source of food for the people in the time of the Prophet Muhammad came from individual communities and also came from the state-owned food centers.

 

Not Just Put Out the Fire

From the above description, the Prophet SAW maintains a balance of food supply prepared by the state and the food sources of individual farmers. With the two well-maintained sources of food supply, there will be a price balance, ie there will not be excessive price increases, even if the Government does not set a benchmark price. In addition, the Prophet also forbade the hoarding of goods which would affect the scarcity of goods and cause an increase in prices.

As an illustration in contemporary times, the Government often conducts market operations to reduce prices when there is a scarcity of goods and services resulting in an increase in the price of these goods. The market operation means that the Government provides goods to let it remain available in the market, so the prices will remain under control – there is no excessive price increase. However, the current market operation is only “put out the fire,” which is only done when there is an increase in prices due to lack of supply of goods. However, the Prophet SAW maintained the balance of this basic food supply in an integrated manner from the early time, namely maintaining the supply of food originating from state-owned food centers, as well as food originating from individuals in the community. Thus, the balance of food supply exemplified by the Prophet SAW is an integrated instrument for price control, not by HPP.

 

List of Reference

‘Ajjaj al-Karmi, Hafidz Ahmad, Al-Idaroh fi ishril Rasulillah Shallallahu Alaihi Wa Sallam,

Indonesian edition, translated by Utsman Zahid as-Sidany, Bogor: Pustaka Thoriqul Izzah, 2012.

Al-Muafiri, Abu Muhammad Abu Al-Malik bin Hisyam, Siroh Nabawiyyah Ibnu Hisyam,            Indonesian edition, translated by Fadhli Bahri, Jakarta: Darul Falah, 2003.

The Economist, 2016, Global Food Security Index 2016: An annual measure of the state of global food security, a report from the economist intelligence unit

 

*This article is a modification and development of a paper that was published by Pangannews.id.

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