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Analysis: ‘Proposal to place food SOEs under Agriculture Ministry sparks debate
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Number-one staple: Farmers plant rice in a paddy field at Lambaro in Aceh on June 28. (AFP/Chaideer Mahyuddin)
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tate-owned enterprises (SOEs) in the food sector may soon come under the purview of the Agriculture Ministry. The proposal, initiated by Agriculture Minister Andi Amran, aims to streamline state efforts toward achieving food self-sufficiency in Indonesia, a key priority of the ministry. However, the plan has raised concerns about potential overlaps in responsibilities and interests between the Agriculture and SOEs Ministries under President Prabowo Subianto’s administration.
The proposal to put food SOEs under the Agriculture Ministry is outlined in Proposal Letter No. B-197/HK.120/M/10/2024. The letter includes a draft government regulation (PP) and four presidential regulation (Perpres) drafts to formalize the transfer. Amran argued that these regulatory changes would consolidate control over the food sector's upstream and downstream operations, thereby enhancing coordination and ensuring food self-sufficiency.
The SOEs proposed for transfer have shown robust financial performance in 2023, with Pupuk Indonesia recording a net income of Rp6.25 trillion (US$394.1 million) and total assets of Rp143 trillion, PT Rajawali Nusantara Indonesia (ID Food) posting a net income of Rp234 billion and total assets of Rp54.18 billion, PT Perkebunan Nusantara III (PTPN) achieving a net income of Rp3.5 trillion and total assets of Rp143.89 trillion, Perum Kehutanan Negara (Perhutani) reporting a net income of Rp501.93 billion and total assets of Rp17.96 trillion, and Perum Bulog earning a net income of Rp820.19 billion with total assets amounting to Rp41.23 trillion.
SOEs Minister Erick Thohir has expressed no objections to the proposal, interpreting it as recognition of his ministry’s success in improving the financial health of SOEs. However, Thohir emphasized that his ministry remains responsible for restructuring and maintaining state programs for SOEs.
Coordinating Food Minister Zulkifli Hasan pointed out that regulatory revisions, including changes to the Regional Autonomy Law, are necessary before the transfer can proceed. Notably, a separate ministerial meeting agreed to transform Bulog into a non-ministerial institution under direct presidential supervision. This decision contradicts Amran’s proposal for Bulog to remain under the Agriculture Ministry's control, especially regarding its offtaker operations.
The House of Representatives Commission VI has also raised concerns. Deputy Head Andre Rosiade, representing President Prabowo’s Great Indonesia Movement (Gerindra) Party, questioned the necessity of transferring oversight for Pupuk Indonesia. He noted that improved coordination could be achieved through other means, including a planned Perpres that would expand the SOE’s responsibilities and improve fertilizer distribution to farmers.
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