Jakarta, Sept 4 - Indonesia could fall short of its 2010 rice output target of about 42 million tonnes of milled rice if the government goes ahead with its proposal to cut fertiliser subsidies, an agriculture ministry official said on Friday.
The government has set a fertiliser subsidy of 11.3 trillion rupiah ($1.12 billion) for 2010, about one third lower than the 2009 figure of about 17 trillion rupiah.
"With a subsidy of 11.3 trillion rupiah, the price of subsidised fertiliser will need to be raised quite high," Sutarto Alimoeso, director general of food crops at the ministry, told Reuters, adding that the government should increase the fertiliser subsidy rather than reduce it.
"If (the subsidy) is not raised, then I'm afraid production targets, especially for rice, will be difficult to meet," he said.
Parliament is currently debating the 2010 state budget, which contains proposals to cut government spending on subsidies for electricity, fuel and fertilisers.
Said Didu, the secretary to the minister at the state enterprises ministry, said that if fertiliser subsidies are cut to 11.3 trillion rupiah, state fertiliser producers would have to increase the retail price by as much as 80 percent.
This could deter some farmers from planting rice and affect Indonesia's to maintain self-sufficiency. Indonesia does not expect to import rice in 2009, the second year in a row, after it posted a surplus of over 1.6 million tonnes in 2008, its first surplus in nearly two decades. ($1=10115 Rupiah)