Implementation of Upper and Lower Price Limits for Paddy Purchases and Rice Sales Agreed

JAKARTA, KOMPAS – The government, along with rice mill entrepreneurs, has agreed to implement a price range or upper and lower limits for the purchase of unhusked rice and the sale of rice. The aim is to curb unhealthy business competition while maintaining the stability of rice prices.

Not only that, the government will also soon adjust the highest retail price (HET) of medium rice at the consumer level based on zoning. This is considering that the HET is no longer in line with the current developments in the structure of production and distribution costs.

This was raised during the Regional Inflation Control Coordination Meeting held by the Ministry of Home Affairs in a hybrid format in Jakarta, Monday (25/8/2025). The meeting, attended by representatives from ministries/agencies and local governments overseeing the food sector, was led by the Secretary General of the Ministry of Home Affairs, Commissioner General (Pol) Tomsi Tohir Balaw.

The increase in GKP prices also indicates unhealthy competition because only companies with large capital can afford to buy it.

The Deputy for Consumption Diversification and Food Security of the National Food Agency (Bapanas), Andriko Noto Susanto, stated that Bapanas held a coordination meeting with rice mill and rice entrepreneurs on August 21, 2025. The meeting resulted in two important agreements.

First, rice mill and rice entrepreneurs have also agreed to purchase dry harvested grain (GKP) from farmers at a price range of Rp 6,500 to Rp 7,000 per kilogram (kg). This is considering that the price of GKP has already become too high, exceeding Rp 7,000 per kg.

"The increase in the price of GKP is unreasonable, thus driving up the price of rice. The rise in GKP prices also indicates unhealthy competition, as only companies with substantial capital can afford to purchase it," he said.

Secondly, Andriko continued, rice mill and rice entrepreneurs agreed that the sale of medium and premium rice to consumers must not exceed the HET based on zoning. In zone 1, for example, the current HET for medium and premium rice is Rp 12,500 per kg and Rp 14,900 per kg, respectively.

Bapanas will issue a circular for rice mill and rice entrepreneurs regarding the agreement. In addition, Bapanas, together with the Food Task Force of the Indonesian National Police (Polri), will oversee the implementation of both commitments.

"We also request that the supply of rice to modern retail networks remains normal. Meanwhile, the Food Task Force urges rice mill entrepreneurs and cooperatives to refrain from any legal actions," he stated.

Andriko added that the government will also evaluate the HET for medium rice as it no longer aligns with the current developments in production and distribution cost structures. This decision was made based on a limited coordination meeting regarding the management of expansion on August 13, 2025, and a coordination meeting of echelon I ministries/agencies overseeing the food sector on August 22, 2025.

"There will be a special adjustment to the highest retail price (HET) for medium-sized rice. Currently, the process is still under discussion," he said.

The Central Statistics Agency (BPS) recorded that as of the third week of August 2025, the national average price of medium and premium rice in zone 1 was Rp 14,005 per kg and Rp 15,437 per kg, respectively. Compared to the average prices in July 2025, the price of medium rice increased by 1.1 percent and premium rice by 0.83 percent.

In a week, the number of regions experiencing an increase in rice prices has also risen. In the third week of August 2025, there were 200 districts/cities that experienced an increase in rice prices. This number is higher than in the second week of August 2025, which reached 191 districts/cities.

Based on the data, BPS categorizes rice into the medium-level and high-level Price Development Index (IPH) categories. In terms of price changes or developments, it is still classified as relatively low, while in terms of price, it is considered relatively expensive.

"This means that rice prices are stable, but stable at a high price," said BPS Head Amalia Adininggar Widyasanti.

The coordination meeting also revealed several problems in the rice market operations through the distribution of Stabilization of Supply and Food Prices (SPHP) rice. Two of these issues are the suboptimal distribution of SPHP rice and the difficulties faced by retail traders in accessing the Klik SPHP application as a requirement to become distributors of SPHP rice.

Based on data from Perum Bulog, the realization of SPHP rice distribution from July to August 2025 amounted to 70,519 tons. This figure only represents 5.35 percent of the distribution target of 1.3 million tons of SPHP rice throughout July to December 2025.

The Head of the Operational Planning and Public Service Division of Bulog, Rini Andrida, stated that the SPHP rice has been distributed through seven distribution channels. Some of these include traditional market traders; affordable food initiatives through the central and regional governments, as well as state-owned enterprises; red and white village/urban cooperatives, our food houses, and modern retail.

The distribution of SPHP rice has also begun to reach the village level, not just limited to the sub-district level. In addition, Bulog has also appointed one person in charge of the distribution of SPHP rice for one people's market.

"Through these various efforts, the amount of SPHP rice distributed has started to increase, approaching 7,000 tons per day as targeted in last week's meeting," he stated.

On the other hand, Bapanas acknowledges that the distribution of SPHP rice is still not optimal. This is evident from the results of the Monitoring and Evaluation of SPHP rice conducted from August 11 to 22, 2025. The monitoring was carried out in several traditional markets, modern retail outlets, our food houses, food kiosks, and red and white village/urban cooperatives in Jabodetabek.

Andriko explained that based on the results of the monitoring, SPHP rice is still not available in most of the monitored locations. Thus, it is concluded that the distribution of SPHP rice in Jabodetabek is still not optimal.

"Furthermore, premium rice is not widely available in modern retail. What is more commonly available is fortified rice or specialty rice, which is priced higher than premium rice," said Andriko.

Meanwhile, Tomsi urged Bulog to resolve the issues faced by retail traders who are unable to access the Klik SPHP application. These problems vary significantly depending on the region. Some traders do not yet understand the application even though they possess a smartphone.

There are also traders who do not even own a smartphone. In addition, there are traders who have difficulty accessing Klik SPHP due to poor signal reception in their area.

"Therefore, I propose the need for a relaxation of the requirements to become a distributor of SPHP rice. For instance, a simple declaration letter would suffice for retail traders facing various problems," said Tomsi.

Tomsi also hopes that Bulog will further enhance the distribution of SPHP rice. This is considering that the average realization of its distribution has only increased from around 1,400 tons per day to 4,000 tons per day. Meanwhile, the target is at least 7,000 tons per day.

In fact, about two weeks ago, on August 13, 2025, the Coordinating Minister for Food Affairs Zulkifli Hasan requested Bulog to increase the target for the distribution of SPHP rice from an average of 2,500 tons per day to 10,000 tons per day. He also requested that the distribution of rice be intensified through traders in traditional markets.