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View all search resultsRice market mechanism anomaly and Bulog’s role
There are systemic issues in the national food supply chain management. High production has not been matched by adaptive absorption and distribution capacity.
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Record stockpile: A worker carries government rice aid on March 3, 2024, at the warehouse of state-owned food logistics company, Bulog, in Talumolo village, Gorontalo city, Gorontalo. (Antara/Adiwinata Solihin)
T
he rice harvest season in March and April this year should have been good news for Indonesia’s food security. National rice production reached 10.45 million tonnes, the highest in the past three years.
However, behind this achievement lies a worrying irony: Farmers’ rice prices are falling, while consumer rice prices are rising and even exceeding the government’s Maximum Retail Price (HET).
This phenomenon indicates an imbalance in the market mechanism. According to economic theory, a production surplus with steady demand should lower prices, yet the opposite has occurred.
The price of dry unhusked rice (GKP) at the farmer and milling levels fell slightly from March to April 2025, from Rp 6,586 (40 US cetns) per kilogram and Rp 6,818 per kg to Rp 6,548 per kg and Rp 6,780 per kg, respectively.
Meanwhile, medium and premium rice prices for consumers rose from Rp 13,699 per kg and Rp 15,549 per kg to Rp 13,717 per kg and Rp 15,567 per kg during the same period.
The situation reflects systemic issues in the national food supply chain management. High production has not been matched by adaptive absorption and distribution capacity. The State Logistics Agency (Bulog) warehouses are full, signaling a serious problem in managing the national food supply chain.
This problem is exacerbated by policies that distort basic economic principles: Quality determines price. The National Food Agency (Bapanas) Regulation No. 14/2025 sets a government purchase price (HPP) for paddy at Rp 6,500 per kg regardless of quality.
