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Effectiveness of State Trading Enterprises in Achieving Food Security: Case Studies from Bernas in Malaysia and Bulog in Indonesia

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Girl with Backpack

Fatimah Mohamed Arshad

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Bustanul Arifin

The issue of food security is of vital concern to many developing countries and various kinds of policy instruments have been employed to achieve stable food sources for growing demands. One of the most predominant policy instruments in both the developed and developing world involves centralised state trading through what are called State Trading Enterprises (STEs). STEs are therefore often an integral aspect of a policy package implemented to address the challenges in achieving the food security objectives of a country. However, although these entities are recognised as an instrument for addressing market challenges, STEs have also been criticised for their distortion of trade and markets through the monopolistic power and government support.

This report brings together insights from two STEs in Southeast Asia, namely Bernas in Malaysia and Bulog in Indonesia. Each study offers a historical perspective to the financial, economic and social contributions of the STEs, their effectiveness in achieving the domestic food security agenda and several policy suggestions to mitigate the issues within each country.

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Yeong Sheng Tey

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