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new presidential regulation on the State Logistics Agency (Bulog) overhaul is expected to be issued this week, providing rights for the agency to oversee 11 food commodities in hopes of cutting the lengthy distribution chain and high logistics costs.

Bulog president director Djarot Kusumayakti said that the new regulation would extend the company'€™s oversight task beyond rice, to 10 other food commodities including sugar, oil, beef, chicken, egg, onions, chili and flour '€” making it more powerful in managing food prices and stockpiles.

Under the current regulation, Bulog is only responsible for overseeing rice, keeping the price of the commodity affordable, for which the company is provided with a public service obligation (PSO) fund.

Djarot said that if the new presidential regulation on Bulog'€™s extension of authority was officially issued, the government would assure the company for access to loans. The agency can be tasked to oversee other commodities, as required by the government, but it has to use its own funds.

'€œWe used to oversee rice. As our role is to be expanded in the future, we'€™ve prepared our organization, infrastructure and standard operational procedures, including the business model,'€ he added.

Beginning from early in his first term, President Joko '€œJokowi'€ Widodo planned to revive the role of Bulog into something such as that which existed prior to the liberal reform program, mandated by the International Monetary Fund (IMF) in late 1998, that narrowed Bulog'€™s role.

In 1995, Bulog was tasked to stabilize prices and maintain supplies of rice, sugar, wheat flour, soybean and other foodstuffs.

State-Owned Enterprises Minister Rini Soemarno said previously that the government wanted to make sure that Bulog could contribute to both stabilizing food prices and helping farmers to earn a decent income.

Requests for the government to take on a greater role in adjusting food commodity prices has been intensifying as the prices of a number of staple foodstuffs like rice, chili and onions have been rising.

Volatile food prices pressured overall consumer prices in 2015, rising 4.84 percent year-on-year compared with a more subdued headline annual inflation rate of 3.35 percent.

'€œOur logistics costs are very high,'€ Coordinating Economic Minister Darmin Nasution said, attempting to explain the cause of the increasing food prices.

'€œWe will give Bulog greater authority, to try to cut the very long distribution chain,'€ he added, citing the possibility that Bulog might begin to buy rice directly from farmers instead of from distributors who purchase directly from farmers.

The country'€™s stubbornly high logistics costs have hurt the competitiveness of local products, with the government considering the establishment of a mobile phone platform to enable farmers and local sellers to engage with nearby wholesale sellers as a method to cut the lengthy distribution chain.

The so-called business aggregator model, however, may take a long time to realize, as it involves various ministries including the Communications and Information Ministry and the Trade Ministry, among others.

'€œBulog will be given greater authority to support food policy, as we are concerned that there'€™s not enough time to push for the business aggregator [model],'€ Darmin said.

As half of the country'€™s 250 million population continue to survive on less than US$2 a day, with millions consuming government-subsidized rice, food, especially rice, is a politically sensitive commodity, both because it is the main food staple and the staple crop of the nation'€™s farmers.

Leaders have pushed for self-sufficiency in rice and other key crops, but rice imports continue to persist, in spite of the Jokowi administration'€™s claim that it dreams of securing food sovereignty before the President'€™s term ends in 2019.

Bulog'€™s rice stockpile hit around 1.3 million tons last week and the government is reported to have another 700,000 tons of rice that could be shipped from Thailand and Vietnam before March as part of agreements between Indonesia and the two countries. Meanwhile, the company may need a total of 1.5 million tons of rice until March.

The Trade Ministry is currently looking at India, the world'€™s second largest rice exporter, to secure a deal similar to the one Indonesia recently signed with Pakistan, which covers a memorandum of understanding (MOU) stipulating the readiness of the exporting country to send an agreed upon quantity of rice whenever Indonesia needs.