Jakarta. Indonesia’s growing food production under President Prabowo Subianto and Vice President Gibran Rakabuming Raka has yet to guarantee stable supplies and affordable prices nationwide, with distribution bottlenecks and weaknesses in supply-chain management continuing to undermine food security, a researcher has warned.

Eliza Mardian, a researcher at the Center of Reform on Economics (CORE) Indonesia, said national production and food reserves had strengthened over the past two years, but the benefits had not been fully passed on to consumers.

“Production has strengthened, but affordability, prices, and resilience remain unfinished business,” Eliza said in a statement shared on Friday.

Indonesia produced 34.69 million metric tons of rice in 2025, up 13.29% from the previous year. The National Food Agency (Bapanas) projects output will reach 34.76 million tons in 2026, exceeding estimated domestic consumption of around 31.2 million tons.

Government rice reserves managed by state-owned logistics company Bulog stood at between 4.5 million and 4.56 million tons in October, while its domestic procurement of unhusked and milled rice had exceeded the government's 4-million-ton target.

The government has also projected self-sufficiency in eight food commodities this year: rice, corn, consumer sugar, chicken meat, eggs, shallots, large red chilies, and bird's eye chilies.

However, Eliza cautioned that annual production surpluses did not necessarily represent a major improvement in food security. Several commodities, including poultry, eggs, corn, shallots, and chilies, have historically recorded aggregate annual surpluses, while rice production has also exceeded consumption by a relatively narrow margin.

The main challenges lie in uneven availability throughout the year, sharp price fluctuations, regional price disparities, and significant post-harvest losses. Limited access to market information among farmers, traders, and consumers further complicates the supply chain.

“An aggregate surplus does not automatically translate into stable availability and affordable prices across all regions,” she said.

The affordability problem remains evident in medium-grade rice prices, which range from Rp 14,600 to Rp 15,000 per kilogram nationally. Prices have also risen in more than 100 regencies and cities, according to Eliza.

Inter-island transportation constraints and lengthy distribution networks mean that a national surplus cannot automatically bring down prices in areas facing shortages.

Farmers Benefit, but Consumers Remain Under Pressure

Government policies have provided some support to farmers. The official purchase price for unhusked rice, known as the government purchasing price (HPP), has been set at Rp 6,500 per kilogram, while active procurement by Bulog helps provide a market for farmers and prevent prices from collapsing during harvests.

A 20% cut in subsidized fertilizer retail prices has also helped reduce production costs. However, Eliza said the impact remained limited because labor and land-rental expenses continued to account for a substantial share of farming costs.

An improvement in the Farmer Terms of Trade Index (NTP) following the increase in the official rice procurement price offers a positive signal for rural incomes. Eliza noted that the index had often remained close to or below 100 over the past two decades, indicating pressure on farmers' purchasing power.

Yet structural problems in the rice milling industry threaten to undermine the benefits for both farmers and consumers.

Citing Agriculture Ministry data, Eliza said 1,056 large-scale rice mills controlled around 40% of the national paddy supply, equivalent to approximately 25 million tons annually. That volume was comparable to the combined procurement capacity of 161,401 small mills, according to her account.

The concentration gives larger operators greater bargaining power in securing raw materials. Competition between Bulog and private buyers can also push paddy prices above the official purchasing price, particularly outside the main harvest season.

While higher prices benefit farmers, they raise input costs for millers. Smaller mills, which have less capital and weaker supply networks, struggle to compete. Meanwhile, higher costs at the farm level do not necessarily translate into lower retail prices for consumers.

Eliza said the government needed to play a stronger role in maintaining supplies of strategic commodities and improving the industry's structure. Bulog's market share remains relatively limited, at around 15%, leaving considerable room for improvements in supply-chain efficiency and competition.

Weather Risks Threaten 2027 Supplies

Price pressures also vary by commodity. Rice prices are affected by paddy costs that can exceed the official purchasing price, as well as distribution expenses. Chili prices are vulnerable to adverse weather in major growing regions, while higher feed and day-old chick costs are putting pressure on poultry and egg producers.

Demand from the government's Free Nutritious Meals (MBG) program is also adding to demand for chicken meat and eggs, Eliza said.

Looking ahead, she warned that food production in 2026 would depend partly on the success of the October-to-December planting season amid the threat of El Niño. Delayed planting or crop failures could disrupt supplies in early 2027, including ahead of Ramadan.

As the administration enters its third year, Eliza urged the government to shift its focus from aggregate production targets toward sustainable output, more equitable distribution and greater resilience to climate and market shocks.

Priorities should include improving climate adaptation, raising productivity sustainably, reducing post-harvest losses, streamlining supply chains and tailoring food reserves to the needs of individual regions.

The government must also strike a better balance between state intervention and private-sector participation to preserve opportunities for smaller rice mills while keeping food affordable for consumers.

“Without improvements in availability, price volatility, and regional disparities, the national production surplus will remain an aggregate figure rather than translate into affordability for most people,” Eliza said.

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