Public Company or Bulog around Rp 720 billion reported a loss because they have to buy rice farmers in the government purchase price or cost of goods sold in 2010. This purchase was inevitable because it is one of the main tasks Bulog who ordered the government in controlling the prices at the farm level so as not to fall when the harvest.

Economists as well as Vice Chairman of the National Mandate Party (PAN), Dradjad Hari Wibowo, disclose it in Jakarta, Wednesday (31/3/2010).

According to Dradjad, file reports on the realization of rice purchases made by Bulog losers will be submitted to the State Audit Agency (BPK) to be audited. These losses need not occur if the real purchase price by Bulog not exceed the specified HPP 2010 December 31, 2009.

"So, Bulog must nombok Rp 720 billion. However, for Bulog itself is not a problem because it is the State Owned Enterprises (SOEs). Thus, the coverage must be closed country," he said.

The government set the HPP on grain and rice in 2010 increased by 10 percent compared to 2009. The increase in COGS was done in anticipation of higher commodity prices abroad, and maintain farm profits remain high.

The increase in COGS over rice and the rice is already taking into account the inflation rate assumption, considering the rising price of fertilizer after planting period October 2009-March 2010, and the possibility of global food price hikes. This provision is stipulated in Presidential Instruction No. 7 of 2009 concerning rice policy, which apply from January 1, 2010. Before the set, actual selling price of rice has been well above the HPP.

With the new HPP, dry harvested grain prices at farm level with a maximum moisture content of 25 percent and 10 percent empty or dirt set Rp 2.640 per kg from previous Rp 2.400 per kg. The GKP price at the mill Rp 2.685 per kg, previously Rp 2.440 per kg. The increase in HPP resulted in shortage of rice in Bulog procurement budget. Therefore, governments need to increase the budget for Bulog Rp 1, 2 trillion.