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Indonesia to triple rice seed budget to lift output

JAKARTA (Reuters) - Indonesia plans to spend 6 trillion rupiah ($651 million) this year to provide farmers with rice seeds, including high-yielding hybrid varieties, to boost output, Vice President Jusuf Kalla said on Saturday.

Farmers harvest paddy in Gowa regency of Indonesia's South Sulawesi province April 24, 2008. Indonesia plans to spend 6 trillion rupiah ($651 million) this year to provide farmers with rice seeds, including high-yielding hybrid varieties, to boost output, Vice President Jusuf Kalla said on Saturday. REUTERS/Yusuf Ahmad

Authorities in Indonesia have been trying to take measures to cushion the impact of soaring food prices, particularly for the staple rice, amid concerns over social cohesion in the world’s fourth most populous country.

“The use of hybrid rice should continue, so we will be able to meet demand,” Kalla was quoted by the state Antara news agency as saying. The amount allocated this year is triple last year’s budget.

Indonesia has long sought to become self-sufficient in rice, but experts say this has been hampered by a lack of high-yield seeds and fertilizer.

The government also planned to allocate 11 trillion rupiah this year to subsidize fertilizer prices, said Kalla, who was in South Sulawesi.

The vice president said that by lifting output Indonesia could go some way to becoming a rice exporter.

For decades, Indonesia has been importing rice as output has not been sufficient to meet spikes in demand during disasters or when crops fail.

Indonesian rice production is expected to be more than 34 million tonnes this year, or about 2 million tonnes higher than domestic demand.

Many Asian countries are looking for ways to address a near tripling in the price of the world benchmark, Thai 100 percent B grade wide rice, which was triggered when exporting nations curbed shipments to cool domestic inflation.

Indonesia has also started to crack down on rice smuggling along its borders, Trade Minister Mari Pangestu told Reuters in an interview this week, and is providing temporary subsidies for the poor, equivalent to 50,000 rupiah ($5.43) a month.

($1=9215 Rupiah)

Reporting by Telly Nathalia; Editing by Ed Davies and Alan Raybould

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