The government has appointed Perum Bulog to manage the supply of rice distributed to the poor under the non-cash food assistance program to help stabilize prices.
The decision was made at a coordination meeting between the social affairs minister and the head of State Logistics Agency (Bulog) in Jakarta on Thursday. With the right to manage food supplies and to supply 100 percent of rice for non-cash food aid programs (BPNT), Bulog has the solution to reduce its rice stocks.
The solution shows the need to re-define the purposes of Bulog’s establishment. Through Presidential Regulation No. 48/2016 concerning the task of Bulog in maintaining national food security, the government assigned the agency to maintain the availability of supplies of rice, corn and soybean and the stability of their prices at the consumer and producer levels.
Other tasks are to ensure price stability at the producer and consumer levels, manage government food reserves, provide and distribute food, import if needed, develop food-based industries and develop food warehousing.
Admittedly, Bulog has not been able to fully carry out the task. Initially, Bulog was more consumer-oriented, especially in providing cheap rice. At that time, the rice production was still not enough, so importing was still needed.
Infrastructure facilities were built to support its activities. Warehouses were built near the ports and cities. When Indonesia achieved self-sufficiency in rice production in the mid-1980s, the government also provided Bulog with rice mills and drying facilities for unhusked rice.
The efforts in price stabilization and in maintaining the availability of supplies were not fully successful because they follow changes in demand and the times. Stocks, for example, can be in the form of dried paddy (unhusked rice) in silos, such as in Thailand and China. The rice price policy has not fully provided incentives to farmers to produce, while for some consumers prices are still unaffordable.
When Bulog was tasked with distributing rice to the poor (Raskin), the financial gains were also insufficient to finance its operations.
The role of Bulog as a price stabilizer is still needed, but it must follow changes in demand and the times. At present, global and domestic trade is changing and the climate is also changing. The people’s needs also change: there are overweight and undernourished people. There are pregnant women who suffer from anemia; there are children under 5 suffering from stunting, and regular natural disasters.
The government must determine the function and the authorities of Bulog in national food strategies and policies so that its role and its position are certain and clear, not changeable.
Will Bulog become a national food agency, as is mandated under Law No. 18/2012 concerning food that requires the establishment of a food agency, or is Bulog only an instrument of the national food agency? The choices of national food strategy and policy will determine the role of Bulog moving forward.