Subsidy Burden Is Increasing If The Government Intends To Master The Industry And Rice Market

Illustration of the rice market. (ANTARA)

JAKARTA Researcher from the Center of Economic and Law Studies (Celios), Rani Septyarini, said that the interpretation of Article 33 of the 1945 Constitution is irrelevant if the government uses it as an excuse to dominate the rice industry and market.

According to him, Article 33 of the 1945 Constitution can be used to ensure sustainability and justice in resource management and important production branches, including food such as rice. However, Article 33 can only be the basis for regulating the role of the state in regulation and supervision, it cannot be the basis for punishing business actors.

"In the case of premium rice with HET around Rp. 14,600, but the production cost of reaching Rp. 15,500 actually shows a price policy failure, not just a producer's fault," Rani said, Sunday, August 3, 2025.

He stated that the state should not be too involved in the rice industry, whether it regulates the price or distribution chain. Especially if state instruments such as the police and the prosecutor's office are used to control rice producers who are now labeled as rice mafias.

This is because, if all administrative violations or technical errors are linked to Article 33, it will lead to overregulations that scare business actors, result in legal uncertainty, and worsen the business climate.

Rani assessed that private rice businessmen should not be pursued through government policies, including cases of rice producers who are forced to sell under production costs. If you continue to lose money, it is feared that many entrepreneurs will go out of business and switch to other businesses.

If the business climate is disrupted due to fears, the private side will be affected. Without the role of a healthy private sector, the government will bear all purchases, storage, and distribution of rice. As a result, the burden of subsidies can swell," he explained.

He emphasized that if they intend to seriously implement Article 33 of the 1945 Constitution in a consistent manner, the government should fix mining governance so that the benefits are really for the prosperity of the people.

"Because mining is an important branch, yes. However, again that even though it is controlled by the state, it is used for the prosperity of the people, I don't know how the government calculates its 'prosperity'. Who is prosperous? Which society prospers when many people around it are affected by its externality, "added Rani.

Previously, in a speech during the 27th PKB Anniversary some time ago, President Prabowo Subianto had mentioned the issue of subsidized rice mixed and sold as premium rice. The President saw the irony of the rice subsidy chain given by the state, but then used by a handful of parties to seek personal gain.

The President then mentioned Article 33 Paragraph 2 of the 1945 Constitution which emphasized that the strategic production sector, which concerns the lives of many people, must be controlled by the state. "Now I ask, if it is rice production, this is the life of many people or not," asked Prabowo.

According to the President, the practice of price manipulation and mixed rice causes state losses of up to Rp100 trillion per year. In fact, such a large amount of money can be used to build thousands of schools and provide free nutritious food for millions of children.

"So, I can't let this happen. I have given the task to the National Police Chief and the Attorney General to investigate, take action. Investigate, take action, confiscate because (the sound) of Article 33 of the 1945 Constitution, production branches are important for the state," said Prabowo.