Observer: The Kindness Of The Grain HPP Profits Farmers

Illustration. (Photo: Doc. Antara)

JAKARTA - Economic observer and Dean of the Faculty of Economics and Business, Mataram University, Ihsan Rois, assessed that the policy of increasing the purchase price of the government or HPP on harvested dry unhulled rice from IDR 6,000 per kilogram to IDR 6,500 per kilogram could benefit farmers.

"The price of unhulled rice will automatically benefit farmers because there is an increase in income for farmers," he said in Mataram, West Nusa Tenggara, quoted by Antara, Monday, January 13.

The exchange rate of food crop sub-sector farmers or NTPP has the potential to increase along with the increase in the HPP of harvested dry grain. Data from the Central Statistics Agency stated that the national NTPP index reached 122.78 points in December 2024.

Ihsan said the increase in the HPP of harvested dry unhulled rice, although only Rp500 per kilogram could trigger an increase in rice prices that were detrimental to consumers.

According to him, the price increase did not have much impact because there was Bulog who served as a national buffer for basic foodstuffs.

"In Indonesia, the increase (rice price) is not significant because there is a Bulog that is a buffer to protect consumers from soaring prices from the increase in the HPP of grain," said Ihsan.

Based on previous reports, the National Food Agency has set an increase in the HPP of unhulled rice amounting to Rp500 per kilogram starting January 15, 2025.

The determination of the unhulled HPP is regulated in the Decree of the Head of the National Food Agency Number 2 of 2025 dated January 12, 2025 concerning Amendments to the Purchase Price of the Government (HPP) as well as the Rice and Grain Price Rate.

The government evaluates changes to the HPP of grain and rice periodically by taking into account the development of the production and distribution cost structure with current conditions.

Throughout 2024, the realization of rice equivalent procurement from domestic production reached 1.26 million tons. The procurement figure is the highest in the last five years.