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View all search resultsBulog’s expanding role puts private rice millers to the test
The government has unveiled plans for Bulog to build 100 post-harvest facilities, backed by Rp 5 trillion in state capital injections, aiming to ease chronic storage bottlenecks that have long limited the absorption of farmers’ harvests.
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A worker tidies up a stack of locally produced rice on May 30, 2024, at state food company Perum Bulog’s warehouse in Indramayu, West Java. (Antara/Dedhez Anggara)
R
ice millers have raised concerns over the State Logistics Agency’s (Bulog) growing footprint in the rice supply chain, warning that its expanding role could squeeze private players out of the market. However, they also argue that the situation could present opportunities for players that can carve out distinct market niches.
Experts, meanwhile, suggested that Bulog should act as a backstop by absorbing output from smaller millers rather than replacing the businesses that keep the sector running.
Organic rice producer Bogo Food has acknowledged that Bulog’s expanded role across the upstream-to-downstream supply chain poses challenges to the competitiveness of the private sector ecosystem.
Operating from seed development through milling and retail, the company noted that large-scale state absorption could intensify price competition for unhusked rice at the farmer level, raising procurement costs for medium-sized private millers.
The comments followed Bulog’s announcement that it would build 100 post-harvest facilities to address storage constraints that have hampered harvest absorption, in line with its 2026 target to absorb the equivalent of 4 million tonnes of rice and unhusked rice.
Coordinating Food Minister Zulkifli Hasan said warehouse shortages had become a key bottleneck, adding that under a presidential directive, 100 facilities would be built with a total budget of Rp 5 trillion in major rice and corn production centers, financed via state capital injections.
Bogo Food chairman Muhadi told The Jakarta Post on Wednesday that Bulog’s post-harvest infrastructure modernization could be a positive step for national efficiency.
