The proposed increase in HPP for grain and sugar is quite high

The HPP for harvested dry grain is proposed to increase by Rp. 1,500-Rp. 2,000 per kg and sugar by Rp. 3,900 per kg from last year's HPP.

KOMPAS/P RADITYA MAHENDRA YASA

A pile of rotting grain after being submerged in floodwaters for several days in Wonosalam District, Demak Regency, Central Java, Friday (22/3/2024).

JAKARTA, KOMPAS — The proposed increase in government purchasing prices and the cost of goods sold or HPP for dry harvested grain and sugar at the farmer level this year is quite high. The HPP for harvested dry grain is proposed to increase by Rp. 1,500-Rp. 2,000 per kilogram and sugar to increase by Rp. 3,900 per kilogram from last year's HPP.

General Chairperson of the Association of Seed Banks and Farmer Technology (AB2TI) Dwi Andreas Santosa, Wednesday (24/4/2024), said that every farmer organization proposed HPP for harvested dry grain (GKP) in different levels of farmers. AB2TI proposed Rp. 6,900 per kilogram (kg) and the Andalan Farmer-Fishermen Group Rp. 6,500 per kg.

The Indonesian Farmers' Union and the Indonesian Farmers' Harmony Association each proposed GKP HPP of IDR 6,757 per kg and IDR 7,000 per kg. The National Food Agency (Bapanas) will process the proposals and determine the HPP GKP, then submit it to the President.

"At the moment, we are waiting for the new HPP GKP decision. Hopefully, the government will truly consider the farmers' proposals," he said when contacted from Jakarta.

AB2TI proposed Rp 6,900 per kg while Kelompok Tani Nelayan Andalan proposed Rp 6,500 per kg. Serikat Petani Indonesia and Himpunan Kerukunan Tani Indonesia each proposed HPP GKP of Rp 6,757 per kg and Rp 7,000 per kg.

The proposal to increase the HPP for harvested dry grain was revealed at the Bapanas Thought Exchange Forum with national rice stakeholders on April 22 2024. Dwi was present at the event. The increase in HPP for sugar is known from the proposal of the Indonesian People's Sugar Cane Farmers Association (APTRI) which has been submitted to Bapanas.

Last year, the government-set reference price for farmers' GKP was set at IDR 5,000 per kg. This year, the National Bureau of Statistics has not yet set a fixed reference price for GKP. Instead, the bureau has implemented a temporary reference price for GKP at IDR 6,000 per kg from 3 April to 30 June 2024.

According to Dwi, this year's GKP HPP is quite high compared to last year due to the increased cost of GKP production. Based on AB2TI's calculation, the production cost of GKP on a land area of 1,500 square meters this year is Rp 5,966 per kg, thus AB2TI proposed GKP HPP at Rp 6,900 per kg.

The highest production cost components of GKP at the farmer level currently are labor and land rental. In one rice growing season, the cost of unscheduled labor can reach Rp 5.29 million, while land rental is Rp 1.625 million.

The cost of production or agricultural business is calculated based on the farmers' customary practices per real land unit and per processing unit with an area of ​​1,500 square meters in 30 rice centers in Indonesia. The cost of production is also calculated based on the average yield of GKP production of 6.5 tons per hectare.

Also read: Food Prices After Eid

KOMPAS/ALBERTUS HENDRIYO WIDI

A number of employees unload sugar cane at the Rendeng Sugar Factory complex, Kudus Regency, Central Java, Friday (21/9/12).

Since last week

Meanwhile, the Chairman of APTRI, Soemitro Samadikoen, admitted to having submitted a proposal for sugar prices to Bapanas since last week. According to the plan, the proposed sugar prices will be discussed together this week.

"In the 2024 sugarcane harvesting season, we propose a sugarcane farmer's reference price of Rp 16,400 per kg. Our proposal takes into account the current cost of production which has significantly increased compared to last year's cost," he stated.

Soemitro explained that during the 2024 sugarcane harvest season, the production cost of sugarcane was Rp 14,907 per kg, while in 2023 it was Rp 13,649 per kg. The cost increase was due to the rise in labor costs, including cutting and transportation, as well as non-subsidized fertilizer prices.

The production cost of sugar cane in the milling season of 2024 reached Rp 14,907 per kg, while in 2023 it was Rp 13,649 per kg.

In addition, the BPP is also shadowed this year by the potential decrease in sugar production and yield. This is due to the impact of El Nino last year and the rainy season at the beginning of this year's sugarcane milling season.

Last year, APTRI proposed a sugarcane farmer's cane price of Rp 15,014 per kg. However, the approved and stipulated sugarcane cane price by Bapanas was lower than the proposed HPP, even lower than BPP, which is Rp 12,500 per kg.

Also read: Sugar Prices Could Reach IDR 18,000-IDR 20,000 Per Kilogram in 2024

PRIYOMBODO

A notice regarding the limitation of purchasing refined sugar is displayed on the shelves of a modern retail supermarket in the Kebayoran Lama area of ​​South Jakarta on Sunday (21/4/2024). Shortages in refined sugar stocks have begun to occur in several modern retail markets.

Assess the impact of inflation

Bapanas stated that the determination of farmer's GKP HPP will be followed by the determination of paddy HPP in the milling process and the highest retail price (HET) of rice at the consumer level. The determination of sugar's HPP will also be accompanied by the determination of the reference selling price (HAP) of sugar at the consumer level.

Bapanas Deputy for Food Availability and Stabilization I Gusti Ketut Astawa said that Bapanas involved the Central Statistics Agency (BPS) to study the impact of changes in HPP GKP and HET rice on national inflation. This is because there are a number of versions of the reference price proposal.

"The BPS will analyze the proposed values that are closest to the small inflation changes. We must not release prices without considering inflation, because the government also has an obligation to maintain stable and controlled inflation," he said in a press release.

Also read: Bapanas is currently calculating reasonable prices for grain, rice, corn and sugar

Head of Bapanas, Arief Prasetyo Adi, hopes for a balance in benchmark prices despite it being difficult to please all parties. The purchasing power of the community needs to be taken into consideration, as well as the welfare of farmers.

Regarding the relaxation of the premium rice selling price ceiling that is temporarily in effect until April 24, 2024, Bapanas is currently discussing it. There are several options that can be taken, namely returning to the original selling price ceiling, extending the relaxation policy, or replacing it with a new ceiling.