The President stated that the expansion of the non-cash food assistance would be postponed over the limited meeting on Tuesday.
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ANTARA FOTO/Asep Fathulrahman
Several farmers plant rice together on Tuesday (5/12) in Kilasah village in Serang, Banten. The Banten agriculture agency has encouraged farmers to plant as a group in order to achieve rice self-sufficiency, in accordance with the Agriculture Ministry’s special program (Upsus) to realize rice self-sufficiency in 2018. The ministry is optimistic about achieving its goal, as rice production reached 2,103 thousand tons out of the Upsus target of 2,255 thousand tons of dry unhusked rice as of November.
JAKARTA, KOMPAS – The government has postponed the expansion of its non-cash food assistance program (BPNT), which had initially been planned to reach 10 million households in 2018. However, it will still continue the rice assistance program. The food assistance is expected to reach target recipients more accurately through the evaluation of data.
The non-cash food assistance constitutes a change in the food distribution mechanism from the previous rice distribution (rice welfare program) that followed with cash assistance transferred directly to households.
President Joko "Jokowi" Widodo emphasized that the number of non-cash food assistance recipients cannot be increased as long as the recipient database had not been evaluated. This step was necessary so that the poverty alleviation program could more accurately reach the intended target.
The President stated that the expansion of the non-cash food assistance would be postponed as he presided over the limited meeting on the Evaluation of the Implementation of Rice Aid and BPNT on Tuesday (5/12) at the Bogor Palace, West Java.
This year, the government carried out a 44-city trial in changing part of the rice aid into the BPNT, which was distributed to 1.2 million households.
"I ask that no other increase is made to this [assistance]. I want it checked, evaluated, so that it works very well in the field," Jokowi said to the ministers and institutional chairmen who were present at the meeting.
The President pointed out that a National Socio-Economic Survey would be conducted in March 2018 to provide the poverty baseline. One of questions in the referred to the distribution of rice aid in the four months leading up to the survey issued by the Central Statistics Agency. The President thus asked that the rice aid distribution not be delayed.
Jokowi asked the chairmen of relevant institutions – the State Logistics Agency (Bulog), the Social Affairs Ministry, and the office of the Coordinating Human Development and Culture Minister – to coordinate to ensure the prompt and accurate distribution of the rice aid.
According to the President, the food assistance had reached more than 15 million households and had a positive impact on the economy of 60 million people (on the assumption that one household consists of four people). He also emphasized that the food assistance, both the rice aid and the BPNT, had to reach the target recipients accurately and on time.
After the meeting, Coordinating Human Development and Culture Minister Puan Maharani said the government was reorganizing the BPNT recipient database to more accurately reach the target. "This is a serious concern for the government. We can’t allow people not receiving that should have been provided to them," she said.
The data evaluation includes checking the food assistant recipients’ names, addresses and state of existence, as well as tracking duplicate data and aligning the data with the network database of the State-Owned Banks Association (Himbara). The number of food assistance recipients will be increased in stages once the financial assistance system was running smoothly.
Coordinating Economy Minister Darmin Nasution believed that evaluating the BPNT database could be completed by the yearend, after which the number of BPNT recipients can be expanded next year from the current 1.2 million households to 3.9 million households.
Separately, food crops director general Gatot Irianto at the Agriculture Ministry believed the change in the food assistance mechanism would have a positive impact, because the distribution chain will be shorter. Consumers could buy rice directly from local farmers.
"The farmers’ prices will be better for consumers because the transportation and loading and unloading costs will be lower," he said.
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Price pressures
Before the President postponed the BPNT expansion on Tuesday, the planned expansion of BPNT recipients from 1.2 families this year to 10 million families in 2018 had triggered concerns among various parties. The planned expansion would have decreased the number of the rice aid recipients that comprise Bulog’s main distribution target.
Khudori, a member of the Food Security Council’s Expert Working Group, said that Bulog’s obligation to absorb unhusked rice, or farmers’ rice, would become irrelevant if its distribution chain was severely shortened. If it was still tasked with absorbing unhusked and husked rice, Bulog would only be able to absorb as much as it can redistribute to the market. "Moreover, Bulog will suffer losses and go bankrupt," he said.
Tasking Bulog with distributing BPNT food through electronics shops was an alternative solution. Through this strategy, Khudori said, Bulog could retain sales channels even when the BPNT was expanded.
It is feared that the change in the food assistance mechanism, which is not designed to support Bulog’s absorption of unhusked rice and farmers’ rice, could cause farm-level price pressures.
The farm-level prices of unhusked rice and husked rice may experience price pressures because of the government’s ceiling price, especially during harvest season. According to Khudori, the government needs to be alert to this, as applying the ceiling price would have a significant impact on the rice milling industry, especially small-scale rice mills.
According to Mohamad Husein Sawit of the Indonesian Agricultural Economy Association’s Board of Supervisors, applying the ceiling price would reduce marketing incentives for rice. Rice milling businesses would no longer be interested in buying or storing unhusked rice in large quantities. The risk would be the falling absorption of unhusked rice.
"If the absorption [by the rice milling industry] falls by 20 percent, for example, will Bulog be able to take over part of the private sector\'s role? If Bulog is unable to [do this], farm-level prices of unhusked rice will fall more sharply across a broader area and will occur over a longer period," said Husein.
