Crop Failures Underway In Indonesia In Year Of Constant Rain - Rice Prices Up 30% - FT

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Indonesian farmer Ujang Majudin pointed to rows of rotting chilli peppers, tomatoes and egg plants as clouds gathered again over his fields, already water-logged by incessant rain. With sharply declining yields and revenue, he faces the toughest season since taking over the family farm 15 years ago. “If the situation doesn’t get better, I have no choice but to lay people off if I am going to survive,” he said.

Next month, he will cut a quarter of his 120-strong workforce if the weather doesn’t improve. As much as 80 per cent of his chilli crop failed, he explained, powering a battered pickup truck over a washed-out country road an hour outside the capital, Jakarta. “The rain is killing my vegetables.”

Indonesia is in the grip of crop failures brought on by nearly a year of heavy rain, which are threatening millions of jobs and pushing up food prices for tens of millions of impoverished families when global food prices are already on the rise.

Inflation in the country rose to a 20-month high of 7 per cent in December, driven mainly by food prices. The cost of rice – Indonesia’s staple foodstuff – has risen by 30 per cent in the past year owing to falls in domestic production, prompting the government to spend heavily in recent months on imports. Indonesians eat more rice per capita than any other country, making it vulnerable to price shocks. To minimise exposure to international markets, the government is aiming to be self-sufficient in rice, soya beans, sugar and meat. But in 2010, it imported 1.2m tonnes of rice and this year will buy more.

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http://www.ft.com/cms/s/0/e51a4270-219a-11e0-9e3b-00144feab49a.html#axzz1BJ0pwoaW