Rice Policy Causes Chain Problems and Indicates Politicization of Food

JAKARTA, KOMPAS – The rice policy has caused a chain of problems and indicates the politicization of food. This policy also appears to be biased towards farmers and fails to adequately consider its impact on rice milling and consumers.

This was raised during the Public Discussion "Paradox of National Rice Policy from Production to Consumption" held by the Indonesian Ombudsman in a hybrid format in Jakarta, Tuesday (26/8/2025). The discussion, opened by Ombudsman member Yeka Hendra Fatika, featured five speakers.

The five speakers were the Deputy for Food Availability and Stabilization of the National Food Agency (Bapanas) I Gusti Ketut Astawa, Head of the Food Task Force of the National Police Brigadier General (Pol) Helfi Assegaf, Professor at the Faculty of Agriculture of IPB University Dwi Andreas Santosa, agricultural socio-economic observer Ahmad Alamsyah Saragih, and agricultural observer Khudori.

In the discussion, the five speakers highlighted and responded to several government policies on rice. These included the policy of purchasing unhusked rice of any quality (without quality standards) without a corresponding increase in the highest retail price (HET), rice market operations, and law enforcement in the rice sector.

This is a regressive policy that squeezes rice millers' profit margins, making it difficult for them to run their businesses.

Khudori assessed that the policy of purchasing harvested dry grain (GKP) of any quality at a minimum of Rp 6,500 per kilogram (kg) at the government purchasing price (HPP) had several consequences. Furthermore, at the time, the policy was not accompanied by an increase in the highest retail price (HET) for rice.

Some behaviors that have emerged include harvesting rice that is not yet time for harvest. Additionally, there are those who deliberately allow high-quality rice to be rained on to increase its weight when sold.

These behaviors, Khudori continued, can lead to low rice yields. Low yields will result in poor rice quality and a decrease in the volume of rice produced.

"If the decrease in rice production is around 1-2 percent, this is quite significant. If this happens, it means that the supply to the market will not be as large as predicted," he said.

Khudori also revealed that any quality of unhusked rice would increase rice production costs. High production costs automatically lead to higher rice prices. However, at that time, the government did not raise the highest retail price (HET) for medium and premium rice.

Rice mills that have purchased paddy at high prices seem to be forced to sell their produced rice at a loss. This is a regressive policy that compresses the profit margins of rice mills, making it difficult for them to operate their businesses.

According to Khudori, they received no incentives from the government. In fact, they were pressured by monitoring potential rice hoarding.

"If the margins are low and there are no incentives, they will relatively not have the capacity to stockpile paddy or rice. This is dangerous as it can lead to a further reduction in the supply of rice to the market," Khudori stated.

Dwi Andreas acknowledged that the "any quality" rice policy does benefit farmers. However, on the other hand, it demotivates farmers who have been striving to produce quality rice.

He also highlighted the government's policy that limits the purchase of GKP at the farmer level to around Rp 6,500-Rp 7,000 per kg. This responsive policy has caused several farmers to fail to sell their rice above Rp 7,000 per kg.

Politicization of food

Meanwhile, Alamsyah believes the policy of purchasing unhusked rice of any quality has contributed to the increase in rice prices. This is because the production cost of medium-grade rice, excluding transportation costs, has soared to Rp 13,000 per kg, exceeding the highest retail price (HET) for medium-grade rice of Rp 12,500 per kg.

"So, the increase in rice prices isn't just due to supply manipulation, but also driven by increases in the price and quality of the raw material, namely unhusked rice. As a consumer, how can I possibly eat rice made from unhusked rice of any quality?" he said.

Alamsyah also assessed that the government was late in conducting rice market operations through the distribution of Stabilization of Supply and Food Prices (SPHP) rice. Signs of rising rice prices began to occur since April 2025, or when the harvest season of the first planting period ended.

Then, in May 2025, the price of rice began to rise. However, the government only distributed SPHP rice in mid-July 2025, while the price of rice had already increased significantly.

"What kind of policy is this? This is a policy of a partner missing the train. Perhaps the government is being too cautious, not wanting to hurt farmers. However, the government is less aware of its impact on the market and consumers," he said.

Law enforcement in the food sector, particularly in rice, should not be politicized. In this regard, there are two types of politicization that may occur, namely criminalization and the interests of public officials' image.

Alamsyah also expressed his agreement with the government to take action against law violators in the rice sector. This is one of the government's efforts to impose deterrent sanctions on the perpetrators while also protecting consumers.

However, law enforcement in the food sector, particularly regarding rice, should not be politicized. In this regard, there are two types of politicization that may occur, namely criminalization and the interests of public officials' image.

"This is not intended to discredit anything. I just want the ministries and government agencies to return to their respective roles, especially in addressing the issue of rice supply," he said.

In the discussion, I Gusti Ketut Astawa stated that the government's intention in implementing the policy of purchasing any quality of unhusked rice is to facilitate farmers in selling their produce. Even if there are instances of selling low-quality unhusked rice, the relevant stakeholders need to assist the involved parties.

To curb rice prices at the consumer level, the government has also distributed food assistance in the form of rice and SPHP rice. Specifically for SPHP rice, the average realization of its distribution has reached approximately 7,000 tons per day.

"We just need to speed up and expand the distribution channels to reach the target of 10,000 tons per day," he said.

At the milling level, Ketut continued, Bapanas will increase the HET for medium rice in each zoning. This is considering that the HET for rice is no longer in line with the current developments in the structure of production and distribution costs.

In addition, rice mill entrepreneurs have committed to purchasing farmers' GKP in the range of Rp 6,500-Rp 7,000 per kg. This is aimed at providing opportunities for small and medium rice mills to obtain paddy at a fair price. So far, they have been unable to compete with companies that have substantial capital to absorb farmers' paddy.

Previously, a Decree from the Head of the National Food Agency Number 299 of 2025 regarding the Establishment of the Highest Retail Price for Rice circulated. Through this decree, the price of medium rice in zone 1 is set at Rp 13,500 per kg, zone 2 at Rp 14,500 per kg, and zone 3 at Rp 15,500 per kg. This decision is effective from the date it was established, namely on August 22, 2025.

Meanwhile, Helfi stated that legal action is limited to perpetrators suspected of mixing rice in violation of regulations. Currently, the police are handling 25 cases of alleged rice mixing that contravene the rules. From these cases, the police have named 28 suspects.

"Regarding hoarding, until now, we have not found any such cases," he said.

Helfi hopes that rice mill and rice entrepreneurs will continue to produce and sell rice in accordance with regulations. For those who are reluctant to sell rice in labeled packaging due to concerns about violating the rules, they can sell it in bulk or retail form according to the Highest Retail Price (HET).

"As for those who are unable to supply rice to the market due to a lack of unhusked rice or rice stock, we assist in documenting the locations they usually supply. After that, we coordinate with Bulog to supply it," he said.