Rice Policy Reform: Removing Restrictions on Rice Trade in Indonesia

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Authors

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Hizkia Respatiadi

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Hana Nabila

"Rice is the staple food for most Indonesians, with that being said, annually Indonesians consume 45.7 million tons of rice (2015). With rice playing such an important role in the diets of Indonesians, the government has implemented policies that are intended to lower the price of rice. These policies include setting a floor and ceiling limit on the price of rice. However these regulations are ineffective as can be seen by the price of rice in Indonesia when compared with the average global price of rice.

In doing so, we recommend three policy changes, firstly, the government should remove Minister of Trade (MOT) regulation 27/2017 as the price ceiling unfairly places financial burdens on retailers. Secondly, MOT regulation 103/205 article 9 (1.b) which grants Indonesian Bureau of Logistics (BULOG) a monopoly on rice imports should be removed as the government should focus at being a regulator to ensure transparency and fairness in the import process, and thirdly, BULOG should rather focus on disaster relief, preparing, managing and rice distribution in areas that need them the most."

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