Bulog Boss Suggests 10 Percent Increase in Margin Fee, Coordinating Minister Zulhas Says This

Perum Bulog proposes a 10 percent increase in the margin fee to the government.

Coordinating Minister for Food Zulkifli Hasan said the final decision on the 10 percent margin fee increase was still awaiting a recommendation from the Financial and Development Supervisory Agency (BPKP).

"Well, we will talk about this with BPKP," said Zulhas at the Coordinating Ministry for Food and Agriculture Office, Jakarta, Monday, December 29.

Separately, the President Director of Perum Bulog Ahmad Rizal Ramdhani said that so far Bulog has only received a margin of Rp50 per kilogram (kg) of rice that has been distributed in the context of the CBP assignment.

Rizal said that the nominal had never increased since 2014.

He assessed that the margin was no longer ideal to support Bulog's mandate in maintaining the stability of food supply and prices through market operations.

Therefore, continued Rizal, Bulog proposed that the margin be increased to 10 percent of the purchase price of rice at Bulog warehouses.

"Well, originally it was approved at 7 percent, originally 7 percent increased its margin. However, we asked, it would be better, we are equal to other SOEs, 10 percent, both Pertamina and PLN," said Rizal.

In carrying out the CBP assignment, continued Rizal, Bulog must first absorb grain or rice from farmers at the government purchase price (HPP). For the financing of this procurement, Bulog relies on loans from the national bank consortium (Himbara).

Rizal said that after the rice was stored in warehouses as CBP and distributed through market operations, social assistance, food assistance, and disaster assistance, Bulog only received payment from the government. During this process, Bulog still bears the burden of bank loans.

According to Rizal, with a small margin, the payment made later, and the accumulation of interest costs, Bulog has the potential to continue to record losses.

In 2025, Bulog is projected to incur losses of up to Rp900 billion. However, Rizal continued, if the margin increase is approved at 10 percent, Bulog will have the potential to post a profit of up to Rp2.1 trillion.

"Once the margin is declared to have increased by 10 percent, it will automatically increase to Rp. 2.1 trillion," said Rizal.

Rizal added that the increase in the margin would strengthen Bulog's ability to carry out assignments, including absorbing farmers' grain into rice as much as 4 million tons by 2026.

"Bulog is ordered to absorb farmers' grain into rice amounting to 4 million tons. That's it, mbak, for one year, from January to December," he said.

In addition, Bulog also proposes the implementation of a single highest retail price (HET) for Bulog rice throughout Indonesia.

Rizal said the proposal only applies to rice sold by Bulog, so that people can buy Bulog rice at the same price in all regions.

According to Rizal, with a larger margin, Bulog can cover the cost of distribution, including the delivery of rice to eastern Indonesia.

"Even to cover the cost of shipping to East Indonesia," he said.

With improved financial conditions, Bulog also hopes to continue the construction and development of post-harvest infrastructure without relying on government assistance.

"So far, Bulog, if it wants to build a little, there must be assistance, must ask and so on. Later, don't ask. There is already a fee. It can be used to develop a warehouse, renovate a warehouse, make a RMU," said Rizal.